The IRS has limited ability to enforce its rules. It cannot fine groups for violating their tax status, for example. Its only option is to charge taxes on specific types of expenditures or take the much bigger step of revoking a group's tax-exempt status -- a punishment often considered incommensurate with most infractions.
One of the few times the IRS has denied tax-exempt status was in 1999 for the Christian Coalition, which operated as a social welfare organization while distributing "voter guides" to churches favoring certain candidates. The battle became highly politicized, with legal challenges that stretched out for years.
Also hampering the agency's ability to enforce is the fact that it operates on what Owens calls "tax time." Any investigation comes after an organization has filed a tax return. Nonprofits are often granted two three-month extensions before they file, meaning most returns showing campaign spending this fall will come about a year after the election.
When returns detailing election-related spending are filed, they fit into a queue with 1.9 million other tax-exempt organizations, including charities, foundations and clubs. The agency's 200 revenue agents focused on tax-exempt filings have traditionally focused on making sure that the groups don't abuse tax-deductible gifts or tax-exempt status for private gain.
