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By Jan C. Ting

Why the IRS scandal is both not as bad, and also much worse, than it seems.

If an advertising agency gets money from clients to produce television ads touting the clients' products, the advertising agency has income on which income taxes must be paid. But if the advertising agency is a non-profit organization operated "for the promotion of social welfare", then it doesn't have to pay income taxes under Section 501(c)(4) of the Internal Revenue Code.

But what if the non-profit is producing television or internet ads taking political positions in the months preceding an election? Someone has to decide whether an organization like that is more political than for the promotion of social welfare, which would disqualify it for the tax exemption. That difficult task has fallen on the Internal Revenue Service, the least loved agency of our federal government.

The Internal Revenue Service has admitted doing a terrible job in executing that function. In a ham-handed attempt to cope with dramatic increases in applications for 501(c)(4) status following the 2010 Supreme Court decision recognizing political spending as the constitutional equivalent of free speech, the IRS branch in charge of tax-exempt organizations attempted to screen out those applications requiring closer scrutiny by singling out those with "Tea Party" or "Patriot" or other indicators of conservative political intent in their names.

Those singled out organizations received detailed requests for additional information, and experienced prolonged inaction by the IRS to their applications. That the IRS branch in charge was experiencing an increased workload with no increase in resources is irrelevant. The use of political indicators to screen out applications for delay and closer scrutiny was clearly improper, and should have been reversed by IRS managers. And the failure to report the problem as soon as it was discovered up the line of command was a blatant violation of the first rule of the federal bureaucracy, "No surprises."

Two IRS managers have already lost their jobs, and it seems likely that others will, too, as Congress conducts hearings to determine who's at fault, and who bears the political responsibility. But the criminal prosecutions that some members of Congress are calling for seem unlikely and farfetched. This scandal is about bureaucratic screw-ups and inefficiency, not political manipulation of the IRS, which the American public has reason to fear.

As a law student in the 1970's, I studied tax law under Stanley Surrey, a former Assistant Secretary for Tax Policy under President Kennedy. Like most tax law professors at the time, Professor Surrey taught that our tax system had three basic requirements: It had to be fair, however we wanted to define that. It had to be easy to administer. And it had to actually raise the revenue required by the government.

When I began practicing, and then teaching, tax law, I felt that our tax system met those minimum requirements, and I even perceived some nobility in our tax system as representing the price to be paid for living in a free society. But over the years, I've become increasingly alienated from our tax system as perceptions of unfairness have increased, along with a dramatic increase in the complexity of the tax laws, and deficits have increased as the tax system fails to produce the revenue to meet government requirements.

The IRS was once an agency with a single mission, collecting the tax revenue owed by taxpayers under the Internal Revenue Code. But the IRS has become burdened with other non-revenue responsibilities, like distinguishing between social welfare and political organizations under Section 501(c)(4). The IRS is expected to develop the expertise to distinguish between different kinds of non-profit organizations, to identify which are political and which are not. The current scandal suggests that perhaps the IRS is not the right agency to do that. Maybe political organizations should be identified by another agency, like the Federal Election Commission?

The IRS has also been assigned by Congress with responsibility for spending programs, in the form of targeted tax credits. Instead of direct government spending on desired programs (spending is bad!), Congress prefers to disguise its spending through targeted tax credits (because tax cuts are good!), even though they amount to the same expenditure of federal revenue.

But the IRS ends up holding the bag for administering spending programs like the Earned Income Tax Credit directed at low-income taxpayers with children. And the IRS gets the blame for unpopular rulings it makes in the course of distributing the credits. It gets the blame if credits are delayed, or if credits are paid out to fraudulent claimants, which we are discovering now is common. Isn't there another agency which could better administer an anti-poverty program, perhaps the Department of Health and Human Services?

And guess which agency has been designated to enforce the Affordable Care Act, also known as Obamacare? The IRS is expected to assess and collect tax penalties for failures to comply with the myriad requirements of the new statute, and will no doubt be blamed for any sins of omission or commission in trying to execute its new responsibilities. Again, political motives will be attributed to its actions. Couldn't some other agency than the IRS do this?

So the current scandal over classification of 501(c)(4) organizations is just the tip of the iceberg which is our overburdened Internal Revenue Service, tasked with missions beyond its primary expertise. While I do not expect the immediate scandal over exempt organizations to be a big one, just wait. More and bigger scandals and controversies involving the IRS are just around the corner!

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Why the Ken Burns documentary “The Central Park Five” finally turned me against the death ...

I've been a holdout, declining to join the progressive movement to abolish the death penalty everywhere in the United States and the world. I've thought that in an open, democratic society with a fully developed modern legal system and lots of lawyers, there would be no risk of error in high stakes, high profile criminal cases.

The documentary "The Central Park Five", by Ken Burns, David McMahon and Sarah Burns, recently broadcast on PBS, has finally convinced me that I was wrong. Everyone should see this fine piece of filmmaking the next time it's broadcast or appears again in a theater, or if it becomes available on the internet.

The basic story is this: In 1989, a young, white, professional woman working on Wall Street went for a jog at night in New York City's Central Park. She was found the next morning brutally beaten and raped, just barely alive, with no expectation that she could survive.

I remember clearly and personally the anger and fear that this crime generated throughout the country but especially, obviously, in New York. Media coverage of the crime was non-stop. The pressure on the New York Police Department to apprehend the perpetrator was at maximum intensity.

The police proceeded to extract confessions to the crime from five black and Hispanic males between 14 and 16 years old. The media and politicians demanded maximum punishment for these depraved savages. One commentator in the film observes that the anger level was so high that, 50 years earlier, these young men might all have been lynched without a trial.

Prosecutors celebrated their victory in obtaining guilty verdicts against all the young men, tried as adults, based solely on their confessions, even though DNA evidence from the crime scene did not match any of them, and the defendants insisted their confessions had been coerced.

All the defendants served their full sentences of between 6 and 13 years before another man, a convicted rapist whose DNA had been in the possession of the NYPD, confessed to the attack on the Central Park jogger. There was a definitive DNA match to this confessed and convicted rapist, and the convictions of the Central Park Five were finally vacated in 2002. Oops!

Throughout their ordeal, the Central Park Five insisted on their innocence. At their parole hearings when asked, as a condition for parole, to admit to the crime for which they had been convicted, they refused to do so, and so had to serve out their full prison sentences.

So much for my theory about developed, modern legal systems with plenty of lawyers. I doubt that any place has a more developed legal system, or a greater concentration of lawyers, than New York City.

An unusual hero appears in the film. In addition to the defendants' families who stood by them and insisted on their innocence from beginning to end, a young and then very overweight Reverend Al Sharpton, who now hosts an evening talk show on MSNBC, appears in the film leading a noisy but seemingly hopeless demonstration at the time of their trial asserting the innocence of the Central Park Five.

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Rutgers abuse cover-up continues. NJ taxpayers and students will pay. ...

Rutgers men's basketball head coach Mike Rice was fired on April 3, after video of his physical and homophobic verbal abuse of his players was broadcast on ESPN, setting off a growing scandal over who knew what and when, that may yet result in additional removals and resignations.

Rice got a million dollar payoff from Rutgers, as did Athletic Director Tim Pernetti, who was asked to and did resign. The University General Counsel John Wolf resigned from his position, but may have negotiated remaining on the Rutgers payroll in another capacity. Assistant men's basketball coach Jimmy Martelli was implicated on the video in the abuse of players. He resigned, and if he didn't get paid off, too, he may be the only one who wasn't.

Rutgers University President Robert Barchi claimed not to have viewed the video until broadcast by ESPN, though it was in the possession of Athletic Director Pernetti as early as November 26, 2012. Instead of viewing the video himself, President Barchi authorized payment of $64,000 for a 50-page outside report which described the coaching methods of Mike Rice as "permissible training." Anyone think that was public money well spent?

Rutgers Board Chairman Ralph Izzo and New Jersey Governor Chris Christie have rallied around University President Robert Barchi, seeking to protect him in his job despite his admission of error in not regarding the matter are serious enough to view a video of alleged abuse of his students by their coach. But we know that members of the Rutgers board did view the video as early as last December, and apparently took no action. So in protecting President Barchi, and saying that no further dismissals are called for, the Rutgers board is also protecting its own members.

Meanwhile, the former assistant to Coach Mike Rice who released the video to Rutgers and ESPN, Eric Murdock, is suing Rutgers for damages for wrongful loss of his job. And Rutgers is bracing itself for possible lawsuits by the basketball players alleging abuse by Coach Rice as documented on the video.

Good thing Rutgers is anticipating a financial windfall from joining the Big Ten athletic conference, which was announced right around the time last year when Rutgers became aware of the troublesome video. Good thing the video wasn't made public then, since that might have spoiled the party. Or was the party and joining the Big Ten, the reason it was covered up?

Does anyone think Rutgers will be anything but a doormat in the Big Ten in the wake of the current scandal? Why would quality athletes with other choices choose a college where abuse like that presented on the video is considered "permissible training"?

Who else is to blame for the situation at Rutgers? Or is no one else to blame, because Rutgers is merely experiencing the normal and typical pressures of a big-time athletics program?

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Immigration amnesty is a formula for permanent dysfunction

Our immigration system is not broken. We don't need, and Congress shouldn't enact, amnesty.

Both my parents were immigrants. All Americans are either immigrants or descendants of ancestors who came from somewhere else, including Native Americans. We should all respect and admire immigrants. But that's not the question.

The question is: how many? Specifically, should we enforce a numerical limit on immigration to the U.S., or alternatively, should we allow unlimited immigration, as we did for our first century?

It's a binary choice: an enforced limit or no limits. Our failure and inability to clearly choose is at the root of our dilemma over immigration policy. We keep searching for a third way, but there isn't one.

I respect those who openly advocate for unlimited immigration to the U.S. Open borders is an intellectually coherent, defensible position. Different arguments can be made for unlimited immigration including philosophical, religious, historical, utilitarian, libertarian, and social justice.

But it is neither intellectually coherent nor defensible to argue that we should retain legal limits on immigration, but we don't have to enforce them, and we can instead periodically amnesty immigration law violators whenever they attain a large number. If we're going to allow unlimited immigration anyway, why pay for the expensive window dressing of immigration enforcement?

The U.S. immigration system is the most generous in the world, providing each year more green cards for legal permanent residence with a clear path to full citizenship than all the rest of the nations of the world combined.

But to enforce the numerical limitation, U.S. immigration law provides that immigration violators can be removed from the U.S. after being found inadmissible or deportable. The enforcement provisions of U.S. immigration law are essential to maintaining the limit on immigration.

We are told our immigration system is broken, the main evidence for which is the presence of 11 million illegal immigrants. Actual causes include ineffective employer sanctions, the mistaken belief that the 1986 amnesty would "solve" our illegal immigration problem instead of attracting more illegal immigrants, and ineffective management and political interference in immigration enforcement.

Illegal immigrants make a rational choice when they choose to violate our immigration laws. A former Temple University colleague said, "The poor people of the world may be poor, but they are not stupid. They are as capable of doing cost-benefit analysis to determine their own self-interest as anyone in this room."

Those considering illegal immigration to the U.S. weigh costs, like the risks of getting caught, against benefits of a better life. To get more illegal immigration, we should lower costs, through discretionary prosecution of violators, and increase benefits, through amnesty. Conversely, to reduce the number of illegal immigrants, we should increase costs, through more effective enforcement, and lower benefits through more certain removal from the U.S.

Border enforcement alone will never suffice to enforce an immigration limit. Would-be law violators have to be deterred from making the attempt through proof that costs outweigh benefits.

Why is enforcing an immigration limit hard? First, there's a constant argument over what the limit should be. And within the limitation, are we admitting the right kind of immigrants or not? Do we need more high skill or low skill labor? That's a permanent, continuing fight.

The hardest thing about enforcing a limit on immigration is requiring us to say no to people who remind us of our ancestors, who are neither criminals nor national security threats, who just want to work hard for a better life. And if they come in violation of our limit, we have to deport them to raise the costs of illegal immigration and deter other would-be illegal immigrants.

Can we do that? If not, we should just declare the borders open to all hard-working immigrants like our ancestors. We can then save the billions in taxpayer dollars spent trying to enforce immigration limits.

What we can't do is keep the limits, but not enforce them against anyone but criminals and national security threats. We can't keep spending money on enforcement, but then give amnesty all who come illegally. That's a formula for permanent dysfunction.

The alternative to the false fix of "comprehensive immigration reform" is a series of smaller reforms, continuing review and adjustments to our immigration limits, and more certain enforcement of whatever limits on immigration we enact.

We must banish the illusion of a big, one-time "fix" of our immigration system, that we can get it off our plates once-and-for-all, and never have to deal with it again. We will be dealing with immigration forever. Get used to it!

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Public school closings reflect our priorities. Weapons are more important.

Thinking and reading about last week's closing of 23 public schools by the Philadelphia School Reform Commission, I've concluded that the closings are necessary, though insufficient to address the fiscal crisis of the school district. Other school districts including some of the nation's largest are expected to do the same thing, including Chicago, Newark, and Washington, D.C.

But those protesting the school closings are right, too. The closings are an outrage against poor children.

The Philadelphia School District is in crisis, with a projected budget deficit over the next five years of $1.35 billion. Its funding from the Commonwealth of Pennsylvania was reduced by $400 million over the last two years. It had to borrow $300 million this year just to pay current expenses.

The School District has 53,000 empty seats out of 195,000, more than 27% of available classroom seats. Since 1997, 84 charter schools have opened in Philadelphia, drawing both students and funding from the School District. Closing 23 schools this fall will reduce operating costs by about $20 million every year, and permit a one-time benefit from the sale of surplus school property of about the same amount. Not nearly enough to balance the School District budget, but still an absolutely necessary step.

The schools to be closed have been identified as underperforming, with students disproportionately poor and minority. The students, parents and staff protesting the closings say it's bad enough that resources have not been provided to improve the educational product of these schools. But now these disadvantaged students will lose the schools themselves, which they describe as refuges in poor communities that have little else. The students will be forced to transfer to larger and more distant schools.

Compare the $20 million annual savings to the School District of closing 23 public schools with the cost of a single military procurement order for the Lockheed-Martin F-35 fighter jet, which is now seven years behind schedule and 70% over its original cost. Each of the 2400 F-35's ordered for the U.S. military is now expected to cost $618 million including operating and maintenance, a total of $1.5 trillion over the projected useful life, an average of $30 billion every year for the next 50 years, if there are no additional cost overruns or developmental setbacks. The F-35 has been described as a money pit and in a fiscal death spiral making it unaffordable, but Congressmen receiving Lockheed-Martin political contributions in 2011 formed a Congressional Joint Strike Fighter Caucus to keep the weapons system fully funded.

Seems like there's plenty of money for high-tech weapons systems, plenty of money to bail out big banks that have made bad bets, plenty of money to keep funding Social Security and Medicare for senior citizens without rationing or any other new limitations, but not even a trickle of money to fund neighborhood schools for poor American children. The protesters are right. It is an outrage.

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