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The Washington Independent
The Washington Independent

Why the IRS Can’t Replace the FEC

Sunday’s Washington Post has a good story detailing why the IRS, which has become the de facto agency for overseeing nonprofit groups’ independent expenditures

Tyreece Bauer
Last updated: Jul 31, 2020 | Aug 23, 2010

Sunday’s Washington Post has a good story detailing why the IRS, which has become the de facto agency for overseeing nonprofit groups’ independent expenditures on political campaigns, is not exactly cut out for the job.

The Post somewhat muddles the story of how we got to this point, tying the Federal Election Commission’s inability to monitor political donations to the Citizens United decision. In truth, donors were already evading the FEC with increasing frequency by creating 527, 501(c)(3) and (c)(4) groups that claimed they weren’t political action committees and were thus outside the purview of the FEC. Bitterly divided on the question of whether to reign these groups in, the FEC’s six commissioners have failed to go after the groups for their sometimes questionable contentions that they don’t have to disclose anything about their donors.

The story goes on, however, to break down the reasons why the IRS is hardly a sufficient replacement for the FEC, citing its limited enforcement capabilities, glacial pace, and fundamentally different mission as the major obstacles:

The IRS has limited ability to enforce its rules. It cannot fine groups for violating their tax status, for example. Its only option is to charge taxes on specific types of expenditures or take the much bigger step of revoking a group’s tax-exempt status — a punishment often considered incommensurate with most infractions. [...]

Also hampering the agency’s ability to enforce is the fact that it operates on what [lawyer Marcus] Owens calls “tax time.” Any investigation comes after an organization has filed a tax return. Nonprofits are often granted two three-month extensions before they file, meaning most returns showing campaign spending this fall will come about a year after the election.

When returns detailing election-related spending are filed, they fit into a queue with 1.9 million other tax-exempt organizations, including charities, foundations and clubs. The agency’s 200 revenue agents focused on tax-exempt filings have traditionally focused on making sure that the groups don’t abuse tax-deductible gifts or tax-exempt status for private gain.

Tyreece Bauer | Analyst and photographer in the field of technology. When I'm not working on my laptop, I like to go surfing, hiking with friends, and go karting or play soccer with my nephew. I enjoy traveling and am excited to visit Tokyo this summer. What are your plans for your next trip?


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