Hobbled IRS can't stem 'dark money' flow

A federal judge has given the IRS a month to present written explanations on how the emails to and from former IRS official Lois Lerner disappeared.

When federal election lawyers decided the nonprofit Crossroads Grassroots Policy Strategies likely violated political spending limits, campaign finance watchdogs were certain the Internal Revenue Service would take action.

After all, lawyers for the Federal Election Commission argued that Crossroads GPS, co-founded by repugican agitators Karl Rove and Ed Gillespie, spent more on politics than anything else leading up to the 2010 election.

Then the IRS tea party scandal exploded.

The repugicans in Congress began waylaying the IRS over what they said was the systematic and inexcusable targeting of tea party and wingnut cabals. And the Treasury Inspector General for Tax Administration declared that the agency had employed “inappropriate criteria” in heavily scrutinizing some groups' tax-exemption applications.

The scandal has persisted with the recent revelation over missing agency emails, which the IRS has blamed on a computer hard drive crash in 2011.

The IRS’ nonprofit division, grappling with a decimated staff and limited resources, effectively lost whatever nerve it had left. Notably, it came to a near standstill on deciding whether it should grant "social welfare" nonprofit status to Crossroads GPS and other wingnut cabals. It likewise balked at denying or revoking nonprofit status for a growing constellation of politically driven, big-spending liberal nonprofits such as Patriot Majority USA and Priorities USA.

The IRS knew that many of these groups were highly political. But “nobody wanted to say 'no, you’re not exempt,'” said an IRS exempt organizations division staffer who asked not to be identified for fear of losing his job.

“We stalled so we wouldn’t have to say no,” he added.

The paralysis allowed organizations waiting for IRS approval to continue to spend freely on elections while keeping the names of their donors secret.

The tea party scandal, combined with Congress systematically stripping the IRS of resources and clout over decades, has led to an exempt organizations division that has all but quit regulating politically active nonprofits in any consistent, demonstrable way, a six-month Center for Public Integrity investigation revealed.