Over the last week, commentators have expressed great outrage over the handling by the IRS of applications by Tea Party groups and others for 501(c)(4) status. In the haste to trigger the next administration-crippling “gate,” these analyses have largely ignored one of the most surprising aspects of this entire episode—that the IRS was actually trying to do its job.
A little context is warranted. There are more than 1.5 million nonprofit organizations in this country, a number that reliably grows by more than 50,000 each year. It’s an incredibly important sector of our economy—not just because it represents more than $1.5 trillion in annual revenues and close to 15 percent of the American workforce, but also because nonprofits dominate critical fields such as education, health care, social services, arts, and, yes, politics. Yet, despite the critical nature of these organizations and their services, the Exempt Organizations Division, the group within the IRS charged with regulating the field, plays only the most passive of roles with respect to the nonprofit sector.