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As the IRS sits in the hot seat, we check tax facts

By Louis Jacobson
Published on Thursday, May 23rd, 2013 at 10:37 a.m.

It’s not April 15 any more, but the Internal Revenue Service is all over the news anyway. The agency is reeling from the news that officials had been giving extra scrutiny to conservative groups seeking tax-exempt status.

We recently looked at two claims about how the IRS and tax law work, by one Republican lawmaker and one Democrat.

• In a Fox News interview, Rep. Randy Forbes, R-Va., said, "The IRS doesn't have to prove something against you. They can walk in and you've got the burden of proof."

Forbes is correct for most tax disputes. As long as no criminal or fraud charges are being tried, and as long as the case is taken up administratively rather than in court, the burden of justifying a taxpayer’s calculations falls upon the taxpayer. But in the relatively small number of criminal or civil fraud cases, the burden is on the government, just as it is in other types of prosecutions.

So, on balance, we rated Forbes’ claim Mostly True.

• We also checked a claim by the chair of the House Democratic Caucus, Xavier Becerra of California. He said, "We have a tax code that allows groups to use their political operations within the tax code, under the guise of a charity, to use undisclosed millions of dollars to do political campaigns."

As it turns out, Becerra used the wrong word to describe the tax-exempt organizations that rely on this wrinkle of the tax code. "Charities" are categorized under a different part of the tax code and they may not undertake any political activity.

But Becerra is correct when referring to "social-welfare organizations" that are at issue in the IRS targeting case. Those groups can raise millions to engage in politics, and they need not reveal their donors. We rated his claim Mostly True.

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Researchers: Jon Greenberg, Louis Jacobson

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