IRS Scandal Spurs Overdue Debate on Agency's Regulations

by - May 21, 2013

Politicized or not, the controversy has already shed crucial light on the disastrous tax and campaign finance mess that landed the IRS in trouble to begin with. A recent federal inspector general’s report did not just expose the agency’s inappropriate targeting of tea party groups. It also pulled back the curtain on the agency’s failure to consistently apply, or even understand, its own regulations. One of the most intriguing aspects of the May 14 report by the Treasury inspector general for tax administration is a tucked-away footnote promising that “a future audit is being considered” of how the IRS handles “political campaign intervention” by tax-exempt organizations, such as 501(c)(4) social welfare organizations and 501(c)(6) trade groups.

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