Nick Nichols

If you believe future IRS abuses will be prevented by putting Lois Learner and her merry band of political hacks in the hoosegow, stop drinking Potomac River Kool-Aid and start partaking in a dose of reality.

The most effective way to eliminate political hackery at the IRS would be to abolish the so-called progressive income tax and completely dismantle the tax agency. Too draconian? Only if you believe the Tea Party purge is the solitary scandal rolling around the halls at the IRS. It’s not.

Fact is the system is corrupt to the core. To illustrate, consider Lois Learner’s old haunt at the Tax Exempt and Government Entities Division. When the IRS bureaucrats determine that an organization is a 501(c)(3) tax-exempt group, that group is excused from paying federal taxes and contributors to the group are allowed to deduct contributions from their taxable income. Those Americans who actually pay federal taxes must make up what the U.S. Treasury loses as a result of the tax exemptions. Moreover, once the IRS determines that a group is tax-exempt, that group is excused from paying taxes (including property taxes) in at least thirty-nine states.

Consider these facts from the National Center For Charitable Statistics about 501 (c)(3) Public Charities. In 1988, 10,215 organizations filed with the IRS as 501(c)(3) Public Charities. They reported combined revenues of $29.8-billion. By July, 2013, organizations filing as 501(c)(3) Public Charities amounted to 357,167! These tax-exempt groups reported combined revenues of $1.6-trillion and assets of $2.9-trillion.

Calculating the amount of federal and state tax revenue lost as a result of tax exemptions is way above my pay grade. I would guess the federal and state revenue loss exceeds one-trillion dollars annually. Who gets stuck paying for this loss? The American taxpayer. Talk about redistribution of wealth. Need I remind you that in 2011 only 53% of American households actually paid federal income taxes?

Allow me to add insult to injury. The uncivil servants at the IRS and their progressive allies on Capitol Hill have corrupted the definition of “public charities” to allow activist groups to feed at the trough of the American taxpayer. For example, 13,716 environmental groups filed as tax-exempt 501(c)(3)s in 2010. Their combined revenue was $7.4-billion. Their total assets equaled $20.6-billion.


Nick Nichols

Nick is a retired crisis communications executive. He also developed and taught graduate-level crisis management courses at the Johns Hopkins University. Nick is the author of Rules for Corporate Warriors: How to Fight and Survive Attack Group Shakedowns. He is a Vietnam veteran.


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