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IRS Mess Exposes Split Between What Congress Will Say and What It Will Do

It took four days in Congress for predictably unanimous rhetorical outrage at the IRS to devolve into a predictably partisan disagreement over the proper legislative response.

There may be 100 senators willing to vote to excoriate the agency for subjecting conservative groups seeking tax-exempt status to an intensified level of investigation. But there’s no sign that a necessary 60 of them will get behind meaningful legislation to make sure that positioning anywhere along the ideological spectrum is never the interest of the tax auditors again.

Congress will manage no more than a symbolic swipe at the symptoms of the more fundamental problem, which is the currently vague and confusing state of campaign finance law.

One rifle-shot response has a chance to make it into law without too much fuss: a proposal by Sen. Marco Rubio, R-Fla., and Rep. Michael R. Turner, R-Ohio, requiring the IRS to fire any employee who “willfully” violates “the constitutional rights of a taxpayer” and subjecting such bad actors to five years in federal prison.

Rubio was unable to get the language attached to the water bill as it moved through the Senate. He’ll have easier openings soon enough. And word is the GOP leadership might speed the Turner measure through the House as soon as next week.

But the two parties have diametrically different ideas about how to bring clarity to the campaign finance system. Democrats would like to make the rules much more forcefully tight and the required disclosures much more expansive. Republicans would deregulate almost entirely.

Three years ago, the Supreme Court opened the money-in-politics Pandora’s box with its Citizens United decision permitting corporations to spend whatever they want on campaigns. The next big decision for federal regulators became how to extend the same sort of freedoms to not-for-profit organizations.

Tax-exempt organizations created to promote “social welfare” — known for the place in the IRS code that describes them, section 501(c)(4) — were told within weeks of the court ruling that they could raise money without limits and didn’t have to disclose their donors as long as less than half their activity was overtly about influencing elections.

A flood of applications for that tax-exempt status started pouring in during the early months of the 2010 campaigns. A system for applying extra scrutiny to dozens of smallish groups with “tea party,” “patriot” or  “9/12 Project” in their names was soon put in place. But the scrutiny didn’t slow down applications for tax-exempt status from the arms of such major political players as Priorities USA on the left and Crossroads GPS on the right.

Whether it’s appropriate to give the IRS so much responsibility for regulating the flow of millions of dollars in campaign spending would seem to be an easy question for Congress, especially given the bipartisan sentiment that it should steer entirely clear of partisan matters. But don’t expect an easy answer.

One obvious legislative opportunity would be a bill setting rules to separate the groups that qualify for the coveted 501(c)(4) designation from the groups that don’t. That way the careerists in the tax office wouldn’t have to keep trying to make those inherently political distinctions. But for now, lawmakers seem closely divided between those wanting to broaden the definition and those wanting to narrow it.

Another alternative would be to unify all regulatory power for groups engaged in politics at the Federal Election Commission, which for now sets the rules only for organizations created for the benefit of candidates.

That’s an idea Democrats have been pushing since 2010 as part of a bill they call the Disclose Act. Its main provision would require corporations, labor unions and many advocacy groups to immediately tell the FEC every time they spend $10,000 or more to influence an election — and every time they receive a donation that big that’s meant to go into such independent expenditures.

Senate Majority Leader Harry Reid is plotting to put that bill to another test vote soon, but it looks impossible for him to find the 60 votes needed to advance it. Republicans know as well as they know anything that nothing’s a bigger test of loyalty to Minority Leader Mitch McConnell than votes to tighten campaign finance regulation, which he views as both First Amendment violations and unilateral disarmament by the GOP.

In the end, the IRS imbroglio looks to be another instance of congressional words not being followed with legislative deeds.

And that may go double for the other major controversy of the week, the Justice Department’s seizure of Associated Press phone records as part of a national security leak investigation. The Washington press corps and their constitutional protections are getting plenty of props from both sides of the aisle. But so far there’s been no discernible momentum for a legislative perennial that’s been around much longer than the Disclose Act — a federal shield law.

It would boost journalists’ protections against having to reveal sources or turn over documents to government agencies by requiring those agencies to prove to a judge that the information’s importance outweighs reporters’ rights to keep confidences.

It’s not going anywhere, either.

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