With IRS Reeling, GOP Reels in Cash

The Internal Revenue Service may be a black hole for taxpayers’ hard-earned money, but it is generating an election-year windfall for the Republican Party.

IRS bashing has become the coin of the realm on the GOP fund-raising circuit, according to party insiders, and donors are responding with generosity.

“It’s clearly a powerful issue,” said Mary Crawford, a spokeswoman for the National Republican Congressional Committee, which is sending out hundreds of thousands of fund-raising appeals calling for IRS reform.

In fact, GOP tree-shakers have moved so aggressively to stoke animosity toward the tax code and tax collectors that the Republican sponsor of legislation to overhaul the IRS has asked them to back off.

“The purpose of . . . this legislation is good government, not politics,” said Ginny Flynn, spokeswoman for Senate Finance Committee Chairman William V. Roth Jr. (R-Del.), sponsor of an IRS reform bill that passed the Senate last week. “Every time one of these letters goes out, it undercuts his message.”

The IRS and its foibles were spotlighted last month when Roth’s panel held four days of hearings on alleged abuses by the agency’s criminal investigative division. Roth’s bill, which is being combined with similar legislation approved by the House last year and then is expected to be signed by President Clinton, will change the structure of the IRS and give taxpayers new leverage when they are audited.

The political potential of IRS bashing became clear last fall, when the Finance Committee held an initial round of hearings on the agency. The popular response to the tales of taxpayer harassment was so great that Clinton abruptly dropped his opposition to the House IRS bill.

Early this month, after the second round of hearings, Clinton used his weekly radio address to deliver a surprisingly harsh critique of an agency that is part of his own administration. And in a show of the bipartisanship that evolved around the issue, the vote for the Senate IRS reform bill was a resounding 97-0.

Still, the IRS issue is not showing up in solicitations by the Democrats the way it is with Republicans. “Direct-mail fund-raising is targeted at a party’s base, and our people are more concerned about education and health care than about the IRS,” said Dan Sallick, spokesman for the Democratic Congressional Campaign Committee.

Unquestionably, the issue taps into core themes--cutting taxes and reforming the tax code--that energize the GOP base. “It’s an issue that has resonance with our party’s small donors,” said Tim Fitzpatrick, a RNC spokesman.

Political fund-raisers are generally unwilling or unable to say how much money has been generated by specific direct-mail solicitations. Some say they don’t track results that way; others acknowledge they don’t want to make the information available to opponents.

But several GOP operatives confirmed that anti-tax and anti-IRS messages have proved to be especially effective fund-raising tools.

Last August, the National Republican Senatorial Committee sent out more than 300,000 letters exhorting potential donors: “With your immediate help today, we can virtually abolish the IRS as you know it!”

Although it was only one of several party mailings at the time, Federal Election Commission reports show that individual donations to the Senate committee jumped from $450,000 in August to more than $800,000 in both September and October.

Senate Majority Leader Trent Lott (R-Miss.) has trumpeted the anti-IRS theme repeatedly in his mass mailings. He signed one recent fund-raising letter for the RNC: “Yours to END the IRS as we know it, Trent Lott.”

The National Republican Congressional Committee, the fund-raising arm for the House GOP, has been using the anti-tax, anti-IRS issue to prospect for money for months.

In February, 4,000 donors ponied up $250 apiece to attend a “tax summit” hosted by the campaign committee, where they met with lawmakers to discuss tax reform, the IRS and tax cuts.

In April, the committee began a mass mailing signed by House Speaker Newt Gingrich (R-Ga.) highlighting IRS abuses of power. It included petitions that called for reining in the IRS. Donors were asked to return the signed petitions with contributions to the NRCC.

“Tomorrow morning, the IRS could knock on your door and demand all your financial records--in fact there is nothing to stop them from just harassing law-abiding citizens and seizing whatever records they want,” Gingrich wrote. “And there is nothing you can do about it.”