Michael Hiltzik ❤ Big Brother IRS

May 30, 2013

By John Seiler

I often have criticized Los Angeles Times columnist Michael Hiltzik for almost always favoring more government — more taxes, more spending, more controls. But I have to commend him for his recent column, “Showing the IRS some love after witch hunt.”

That’s the actual title. So he really does ❤ the IRS.

What’s commendable is that it makes sense. According to one of Burnham’s Laws, “Who says A must say B.”

In this case: Who wants massive, expensive government must go along with paying for it with massive confiscations of private wealth through a government organization, in our case the IRS. The government programs don’t pay for themselves.

The IRS is what libertarians call “the business end of the State.” When people think of government, they like to think of the nice things: A poor person being fed. An elderly person receiving a life-saving operation. Or the necessary things: A murderer caught, tried, convicted, imprisoned.

But even the nice and necessary things mean money must be coerced from people who generally don’t want to give it up. That’s the “business end” — forcing you to do something.

And because the system uses force, government inevitably metastasizes into things that aren’t so nice or necessary, such as the massive military-industrial complex Eisenhower warned us about back in 1961.

According to a recent biography, in the 1960s Ike was “bitterly critical” of the escalation of the Vietnam War by JFK and LBJ, which ended up killing 58,000 Americans and more than 3 million Vietnamese, while effectively bankrupting America.

As Country Joe warbled at Woodstock, “There’s plenty good money to be made, supplying the Army with the tools of the trade.”

‘Horrible customer service’

Then there’s the massive compensation for government employees, which federal workers now is twice that of equivalent private-sector jobs.

Hiltzik enthuses:

“You may not have discerned this through the fog and mist of recent weeks, but the Internal Revenue Service is pretty durn good at its job.

“Some experts would go further. ‘I think they do an extraordinary job, considering that they’re historically underfunded and under-resourced,’ says Dennis Ventry, a tax expert at UC Davis law school. Last year, he observes, the agency processed 144 million returns for the personal income tax, 2 million for the corporate income tax, and 3 million for the estate and gift tax, with a speed he calls ‘miraculous.'”

But at his May 17 testimony before the House Ways and Means Committee, former IRS head Steve Miller said of the targeting by the IRS of conservative and libertarian groups, “I can say generally, we provided horrible customer service here. I will admit that. We did horrible customer service.”

I guess it depends on what happens to you. IRS agents provide excellent customer service — except when they don’t.

Hiltzik wrote in an earlier column, “The real IRS scandal“:

“Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years.”

I always hate it when my fellow journalists, who are protected by the First Amendment, want to reduce others’ free speech. His newspaper, the Los Angeles Times, can print whatever it wants to and avoid any government scrutiny whatsoever. That’s as it should be. But journalists should want others to enjoy that privilege.

Is there a difference between non-profit foundations and a private, for-profit company like The Tribune Company, which owns the Times? Well, for one thing, the Tribune Company hasn’t made money in years and only recently emerged from bankruptcy.

For another thing, the Tribune Company could end up reorganized as a non-profit that doesn’t pay corporate taxes. How different then would it be from the 501(c)4 groups Hiltzik wants taxed? Even if the Tribune Company remains for-profit, the non-profit model is taking hold for many publications as a way to survive in the Internet world.

So, for these non-profit newspapers, who at the IRS determines if their news truly is “non-profit” and not “political”?

Hiltzik:

“The organizations at issue are known as 501(c)4 groups (call them C4s for short) after the section of the tax code that applies to them. They’re nonprofit “social welfare” organizations that by law must be devoted primarily to programs broadly serving their communities, not private groups. IRS forms reveal what the agency considers to be mainstream C4s: religious groups; cultural, educational and veterans organizations, homeowners associations, volunteer fire departments. In recent years, however, overtly political groups have been claiming C4 status, which allows them to keep their donor lists secret and to avoid paying taxes on certain income.”

Again, who decides if a “cultural” or “educational” organization — such as an ethnic newspaper with editorials, or an “educational” group that teaches about, say, IRS abuses — runs afoul of Hiltzik’s definition of “political groups”?

Private persons

Moreover, Hiltzik does not report that it wasn’t just non-profits the IRS targeted in its witch hunt, but private persons and their individual tax returns, on which they paid the same high taxes as everybody. One example was described by The Blaze:

“Dr. Anne Hendershott, a devout Catholic and a noted sociologist, professor and author, exclusively told TheBlaze that she believes she may have been one of the IRS’s targets.

“According to Hendershott, the IRS audited her in 2010 and demanded to know who was paying her. While they did not ask directly it seemed as though the agent wanted to know about the leanings of these particular organizations….

“Hendershott noted it was particularly surprising that she, alone, was audited. Her husband, who brings in the vast majority of the family’s income, was not included in the IRS’s inquiry — even though the Hendershotts always files jointly….

“The process was a grueling one, including many questions that Hendershott felt were political in nature. Numerous records were requested before the in-person meeting, as well as during and after….

“Her writings for the Catholic Advocate soon ceased because, Hendershott admits, the IRS audit silenced her. If her suspicions are true, this may have been its chilling intention.

“ ‘I haven’t written for them since the audit, because I was so scared,’ she said (records show her last article for the organization was on July 10, 2010 — the same month the IRS audit unfolded).”

Is this free America, or East Germany circa 1985? By the way, she hardly made any money from the articles. The story continues:

“So far, she has only shared her story with friends and those close to her, but in light of the recent IRS scandal, she has decided to speak out.

“ ‘It was clear they didn’t like me criticizing the people who helped pass Obamacare,’ she said of the audit, later adding, ‘The IRS is very frightening.’

“In addition to creating stress and fear, Hendershott said that the experience came at a great emotional and financial expense for the family, noting that even after the audit the government sought more information from her.

“ ‘It was like they just couldn’t find what they wanted because they wanted more and more and more,’ she said.”

Pro-Israel groups

And as a Wall Street Journal editorial noted, the IRS also targeted pro-Israel groups:

“A Pennsylvania pro-Israel group called Z Street says it filed for 501(c)(3) status in December 2009, intending to operate purely as an educational group. Founder Lori Lowenthal Marcus says that its tax counsel called the IRS in July 2010 to check on the slow pace of approval, and the IRS acknowledged its targeted enforcement.

“Asked about the slow pace of approval, the IRS auditor on the case, Diane Gentry, said the application was taking so long because auditors were supposed to give special scrutiny to groups ‘connected with Israel.’ Ms. Marcus says Ms. Gentry further explained that many applications related to Israel had to be sent to ‘a special unit in D.C. to determine whether the organization’s activities contradict the Administration’s public policies.’ Z Street filed suit in August 2010 in federal court in Pennsylvania alleging ‘viewpoint discrimination,’ and its case has since been moved to Washington, D.C. Ms. Gentry did not return our phone calls.”

I checked out Z Street’s Web site. They have some new stuff about the IRS harassment:

“FINALLY!  Two and a half years after filing a Complaint in federal court seeking relief from the Internal Revenue Service for viewpoint discrimination against our strongly pro-Israel organization, Z STREET has a hearing date in the District of Columbia federal district court on JULY 2, AT 2:30 P.M. Z STREET v. IRS (Douglas H. Shulman, IRS Commissioner)”

Now, is Z Street advancing a political position? Or is it a religious position, based on its interpretation of the Bible? What should be allowed as a tax exemption, and what not?

The Real IRS

That’s the reality of the IRS. Perhaps, as Hiltzik writes, “The Internal Revenue Service is pretty durn good at its job.” 

But its real “job” is to send “hither swarms of Officers to harrass our people, and eat out their substance.”

Hiltzik’s solution as to which groups should get tax exemptions:

“It’s about time the IRS subjected all of these outfits to scrutiny. The agency’s inaction has served the purposes of donors and political organizations on both sides of the aisle, and contributed to the explosive infection of the electoral process by big money from individuals and corporations.”

So the solution is his usual prescription: more government and more taxes.

My solution is different: Avoid the problem by getting ride of the IRS entirely, and the whole income tax system along with it. No taxes, no need for audits. And don’t “replace” it with the so-called “Fair Tax,” really an unfair national sales tax of more than 20 percent.

Instead, replace the income tax with nothing, and take a meat cleaver to spending.

That really is the choice: A gigantic government paid for by an IRS that has a “chilling” effect on free speech. Or no IRS and no income tax, leaving us free.