Document Type

Response or Comment

Publication Date

5-4-2022

Publication Title

Hearing Before the U.S. Senate, Finance Committee Subcommittee on Taxation and IRS Oversight

Abstract

Are tax laws and IRS enforcement up to the task of overseeing the tax issues associated with the political activities of tax-exempt organizations? Though the tax laws governing the tax-exempt realm are wanting, our overall legal structure is not bad. It is justifiable at least. Where we fall down as a nation in this space is in the enforcement. We do not allocate enough resources to this arena, and we do not institutionally offer the support necessary to enforce these laws. These failures do not favor one party over the other but favor those interests in the country with the means and the willingness to abuse that structure. Primarily that redounds to certain wealthy interests. This testimony describes the tax law that applies to these organizations and then discusses the enforcement environment including both a description of the resources available to the IRS and a discussion of the institutional challenges faced by the IRS. It demonstrates that the IRS does not have the budget to enforce the tax laws on the books, but the IRS also often fails to make use of simple information to enforce these laws that matter both in collection of the revenue and to our democratic order.

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