( CNN ) -- Hating the Internal Revenue Service is an American pastime that transcends political affiliation . This past May , disgust for the IRS reached an all-time high when Lois Lerner , director of the IRS 's Exempt Organizations unit , disclosed the agency had improperly targeted social welfare organizations seeking special status under section 501 ( c ) ( 4 ) of the tax code based on their political ideology . This revelation resulted in more than three months ( and counting ) of congressional hearings and investigations . Read the IRS inspector general 's report on targeting . But in typical Washington fashion , the manufactured congressional outrage and grandstanding has served to do little more than obfuscate the real scandal at the IRS : that the agency allows social welfare organizations to manipulate federal tax law by spending hundreds of millions of dollars on political ads . Anyone who watched television in the lead-up to the 2010 and 2012 elections undoubtedly noticed the slew of vitriolic , misleading campaign ads . Some of these ads were sponsored by federal candidates , but many more were produced by groups with innocuous sounding names -- such as Crossroads GPS or the American Action Network -- but massive bank accounts . Crossroads GPS , for example , a nonprofit organization cofounded by former George W. Bush administration official Karl Rove , spent more than $ 70 million on the 2012 election . Like the groups targeted by the IRS , Crossroads GPS is a section 501 ( c ) ( 4 ) organization , which affords certain tax benefits and -- most importantly -- the ability to keep the names of donors secret . Federal law requires these groups to operate `` exclusively for purposes beneficial to the community as a whole . '' IRS regulations , however , create a loophole in the law by allowing groups `` primarily '' engaged in these types of activities to benefit from this tax status . Many 501 ( c ) ( 4 ) groups have interpreted this regulation to mean they can spend up to 49 % of their funds on political activities -- mostly negative , deceptive political ads . Adding to the confusion , the IRS has said there is no specific percentage the agency uses to gauge whether a group has engaged `` primarily '' in social welfare activities , but rather that it considers all facts and circumstances . What does that mean exactly ? No one knows . When directly confronted about the problem and the agency 's record of inaction , the IRS has said only that it is `` aware '' of the issue . But the IRS has been aware of and has chosen to ignore this problem for more than 50 years . If the agency had revised its regulations at any point in the past as my organization and others requested , the agency might have avoided the quagmire in which it is drowning . Frustrated with the IRS 's inaction , in May CREW filed a lawsuit against the IRS for flouting the law barring 501 ( c ) ( 4 ) organizations from engaging in political activity . The case is pending in District of Columbia district court . Rep. Chris Van Hollen , D-Maryland , and other public interest groups filed a similar lawsuit last month . Because social welfare organizations are not required to disclose their donors , 501 ( c ) ( 4 ) groups have become the de facto vehicle for millionaires , billionaires , and even corporations who want to remain anonymous while influencing our elections . As a result , politically active nonprofit groups spent more than $ 300 million on the 2012 election . Americans should not only be outraged that our elections are being flooded with anonymous cash , but because of the nonprofit status of these groups , taxpayers are subsidizing their activity . With more and more groups seeking to participate in federal elections using money raised from donors who want to remain anonymous , applications to the IRS for 501 ( c ) ( 4 ) status more than doubled between 2010 and 2012 . To manage the deluge , Lerner said the agency relied on code words and other shortcuts to single groups out for extra review . While the scrutiny of tea party groups has received the most attention , the IRS `` Be on the Look Out '' ( BOLO ) list also included the words `` progressive , '' `` occupy , '' and `` Israel . '' Flagging any group for further screening because their applications included specific words or phrases was wrong . The impact , however , of such misguided actions on our democracy was negligible , particularly compared to that wrought by the IRS 's failure to stop hundreds of millions of dollars from flooding our electoral system to influence our votes . For all of the abuse heaped upon the IRS and for all the concern about the BOLO list , the same thing could happen again if the disparity between the language of the statute and regulation is not addressed . Agents processing applications of groups seeking social welfare status in the future will remain as confused about the standards as those whose decisions have been questioned this year . Nevertheless , Congress has shown no appetite to pass legislation clarifying the requirements for these nonprofit groups . As the 2014 election cycle gets under way , the super rich and corporations with deep coffers will continue to buy our elections , and Congress will continue to spend time and resources on a never-ending cycle of investigations into a problem with a fairly easy solution : as Congress intended when it first passed the law , prohibit 501 ( c ) ( 4 ) organizations from spending money on anything other than social welfare activities . As long as members of Congress do nothing other than one-up each other 's disdain for the IRS , nothing will change . And that really is a scandal . Join us on Facebook/CNNOpinion . The opinions expressed in this commentary are solely those of Melanie Sloan . Got a story idea or tip for CNN 's investigations team ? Go to cnn.com/investigate or click here to submit . Watch Erin Burnett weekdays 7pm ET . For the latest from Erin Burnett click here .
Lois Lerner sparked scandal by revealing the IRS targeted social welfare organizations . Author : IRS allows some of these groups to spend hundreds of millions on political ads . Comment: Sloan : Until Congress does more than express its disdain for the IRS , nothing will change .