THE BLOG
05/24/2013 01:19 pm ET Updated Jul 24, 2013

Campaign Finance Reform by a 'Stroke-of-the-Pen'

There is a silver (and gold) lining in the IRS flap.

MSNBC's Lawrence O'Donnell has pointed out that the law under which the flap arose has been misinterpreted by the IRS since 1959.

The 1954 law provides special tax treatment for organizations exclusively engaged in social-welfare. In 1959, without any amendment by Congress, the IRS decided on its own that it would grant such special treatment (donor anonymity and tax-free status for organizations) that were primarily engaged in social-welfare activities.

Administrative errors are fixable by administrative action. No act of Congress is required.

With a "stroke of the pen", the IRS should announce that it is correcting the error, and returning to the original intent, indeed the original language, of the IRS law. The IRS Commissioner reports to the Deputy Secretary of the Treasury. Hence, the President, the Treasury Secretary or the Deputy Secretary have the authority to instruct the Commissioner on matters of policy.

Let us now "game" the consequences of correcting the error. Virtually all current 501(c)4 organizations would now become taxable and required to disclose their donors. It would instantly clean-up the dark money the American people generally oppose.

Those organizations would, to put it mildly, freak-out. After all, anonymous, tax-free, big money control of the political system would be threatened.

Faster than stink on you-know-what, Congress would rush to repair the damage. This would be even worse for them than the sequester-created airport lines they experienced that was very promptly remediated. It is one thing, after all, to have to stand on lines; imagine if they had to pay for their own tickets!

The fight would be all over the news, enabling the campaign finance reform forces to get air-time. The public already opposes dark money, and they would be galvanized to swing sharply behind cleaning up the system, restoring the IRS's credibility.

As the background check vote demonstrated, however, what the overwhelming majority of the American people want does not get enacted if a powerful, intense minority opposes it.

The beauty of this is that no act of Congress is required. Congress can only act to make a new set of rules.

There are three special benefits in the current system as mistakenly applied by the IRS: donor anonymity, tax-free status and the ability to engage in partisan politics under the fig-leaf of "social-welfare". "Karl Rove" and "social welfare" in the same paragraph, much less the same document, strains the English language beyond the breaking point.

There is enough opposition to anonymity in the Senate to prevent that benefit from being enacted. What politician could vote for anonymity in the light of scrutiny?

Hence, the deal would be to provide tax-exempt status for organizations doing "primarily" social-welfare work, but without donor anonymity.

That would constitute a major step forward in campaign finance reform.

The IRS flap remains another ginned up "scandal" that the right-wing loves and the lamestream media embraces. On the first day the story broke, I dissented from the feeding frenzy, pending new information that would show partisan influence. None has yet been produced.

Dave Johnson has since written a trenchant piece based upon----wait for this, now--facts in the Inspector General's report that eviscerates the basis for calling this a scandal, except the concerted, coordinated efforts, thusfar successful, to try to make it a scandal.

Moreover, these organizations had no obligation to apply for 501(c)4 status in the first place.

Correcting the 45 year administrative error would not only change the focus of the debate, it would provide much needed campaign finance reform with a "stroke-of-the-pen".

The country, long-suffering under the yoke of corruption, would see a ray of hope.

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