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The Last Word
updated 5/16/2013 11:18:53 PM ET 2013-05-17T03:18:53

John Boehner wants to know "who's going to jail" over the recent IRS scandal. MSNBC's Lawrence O'Donnell says "that may be the single stupidest thing ever said by a Speaker of the House."

House Speaker John Boehner wants to know “who’s going to jail” over the recent IRS scandal, in which agents targeted Tea Party-related groups with unequal scrutiny. A far as MSNBC’s Lawrence O’Donnell is concerned, “That may be the single stupidest thing ever said by a Speaker of the House.”

As O’Donnell has been saying since Monday, the so-called IRS scandal is only the consequence of an older and more basic problem with the organization’s reading of the tax code–specifically, with its reading of Section 501(c)(4), which exempts social welfare groups from paying taxes.

The law defines such groups as “civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.” Since 1959, the IRS has been reading “exclusively” as “primarily.”

“By doing that they made IRS agents judges of political activity, investigators of political activity,” O’Donnell explained in the Rewrite Thursday. “IRS agents were then forced to evaluate just how political a given 501(c)(4) organization might be. And it is very clear that if the words “Tea Party” or the name of any political party at all appears in the title of your 501(c)(4) you absolutely do not qualify for 501(c)(4) status under the law.”

Some politicians, however, still don’t seem to understand the interplay between this law and how it’s enforced.

“We must pass a law that makes it much clearer that the so-called social welfare organizations must make their priority promoting social welfare rather than engaging in politics…From my standpoint they should not have any political purpose, and I would hope we could change the law on that,” said House Minority Leader Nancy Pelosi Thursday.

“Now, I don’t expect Nancy Pelosi to be watching this show,” O’Donnell said, “but someone on her large staff should have picked up what I’ve been saying about this by now, and whispered something in her ear about it.”

O’Donnell said he hopes someone at Friday’s Ways and Means Committee hearing on the IRS scandal will bring up the actual law defining 501(c)(4)s. His bet is Rep. Sander Levin (D-Mich.), older brother of Sen. Carl Levin (D-Mich.), who has questioned the IRS about the exclusively/primarily discrepancy in the past.

Video: Rewriting Washington on the I.R.S.

  1. Closed captioning of: Rewriting Washington on the I.R.S.

    >>> my question isn't about who is going to resign. my question is who is going to jail over this scandal.

    >> that may be the single-stupidest thing ever said by a speaker of the house . there is the speaker of the house of representatives in one sentence acting as police, prosecutor, judge and jury, convicting of a crime, and sending to jail someone, anyone, working in the internal revenue service . and, so of course, he was instantly humiliated by all of the reporters in the room who buried him in angry questions about how could he possibly presume a crime had been committed and how could he possibly presume the crime would carry a jail sentence . and, oh, by the way, what is the crime that he had imagined had occurred? of course, all of that would have happened if the washington press corps had the slightest sense of balance in how it pursues the scent of scandal. but they don't. and so, of course, that didn't happen. and when the speaker walked out of the room, he wasn't chased down the hall by reporters, peppering him with more questions about his breathtakingly stupid and crazy comment, a comment that makes him finally and definitively unworthy of his office. now, i have not been one of those critics of john boehner who says that he is bad at his job of running a republican house of representatives . in fact, the night of the 2010 elections when it was obvious that he was going to be the next speaker of the house , i predicted, somewhat sympathically, that he was going to have a lot of trouble with the tea party members of his party who would not comprehend why they would ever have to do such things, as, for example, raise the debt ceiling. i don't think it is possible for john boehner to actually have done a better job of managing his out of control and crazy party in the house of representatives than he has done. but for a speaker of the house to be so unschooled in the ways of american criminal law , american injuris prudence, to be so reckless with language and ideas, to be saying that someone should go to jail without even knowing who he is talking about, without even knowing what the case against the person is, without even knowing that person's defense means in the controversy involving the irs , the republican speaker of the house has become washington 's new joe mccarthy , the raving alcoholic senator of the 1950s who threw blind accusations everywhere. now as i've been pointing out all week, rank ignorance of the law is the driving force of what washington perceives to be the scandal at the irs . i've been telling you since monday that washington is so desperately ignorant of the law on 501(c)(4) tax exempt organizations that no one in washington actually understands what the real scandal at the irs is. we showed you last night that after two days of my harping on this, the chairman of the senate finance committee finally started to echo my words on the senate floor, as did the president yesterday and today. but here is how much ignorance pervades the discussion of the irs controversy.

    >> we must pass a law that makes it much clearer that the so-called social welfare organizations must make their priority promoting social welfare rather than engaging in politics. from my standpoint, i think that they should not have any political purpose, and i would hope that we could change the law on that.

    >> ignorance in congress never surprises me. but that completely false statement that you just heard is worthy of some surprise at this stage of this game. as viewers of this program have known since monday, the law that nancy pelosi is talking about says that 501(c)(4)s must be, quote, operated exclusively for the promotion of social welfare . exclusively. that is what the law says already. that law solves the problem if that law is simply enforced, which is has not been since 1959 when the irs changed the meaning of the word "exclusively" on its own, and without the legal authority of congress, and said, in defiance of both the law and the english language , that exclusively means primarily. now, i don't expect nancy pelosi to be watching this program, but someone on her large staff should have picked up what i've been saying about this by now and whispered something in her ear about it. and if none of them heard what i had to say about it, how it they miss these words from the lead editorial in this morning's "new york times". given the confusion and the years of abuse, it's time for the irs to return to the original language of the statute and require these groups to operate exclusively for the promotion of social welfare . and not engage in politics. it took the "new york times" four days to get on my bandwagon, but there is, sadly, now no greater marker of the decline of the influence of the mainstream media , that no one on nancy pelosi 's staff had brought that passage to her attention today before she got it all wrong. there is, as far as i can tell, exactly one member of congress who has understood this problem before this week, and that is senator carl levin . he has peppered the irs with questions over the years about 501(c)(4)s. last summer in a letter to the irs , he asked, how can the irs interpret the explicit language which provides that 501(c)(4) entities must operate exclusively for the promotion of social welfare to allow any tax exempt partisan political activity by 501(c)(4) organizations? and the irs 's answer was, quote, long-standing treasury regulations have interpreted exclusively, as used in section 501(c)(4) to mean primarily. in other words, the congress wrote a very clear law with a very clear word , "exclusively." and the irs in its enforcement guidelines for its agents changed the word "exclusively" to "primarily." and by doing that, they made irs agents judges of political activity, investigators of political activity. irs agents were then forced -- they were forced to evaluate just how political a given 501(c)(4) organization might be. and it is very clear, that if the words " tea party " or the name of any political party at all appears in the title of your 501(c)(4), you absolutely do not qualify for 501(c)(4) status on the law, and you should be challenged. but you might, under the scandalous way the irs began interpreting this law in 1959 , actually qualify for that status. and that is the irs scandal that only senator carl levin seems to completely understand in washington . that the irs changed the meaning of a very important word in 1959 , and we now have the inevitable outcome that the irs agents are forced to use their judgments based on their investigative capacities to determine which political organizations deserve 501(c)(4) status. now i am hoping that tomorrow at the house ways and means committee hearing, at least one question about the actual law defining 501(c)(4)s will be asked. and my bet is that the leader of the democratic minority on that committee will actually ask that question. because congressman sander levin is senator carl levin 's big

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