Any organization granted a tax exemption for “social welfare” activity under Section 501(c)(4) of the tax code can collect unlimited and undisclosed contributions but if the group is spending most of its money on political activity, then it loses its status and has to report how much it got and from whom, according to tax experts.

Last Friday, the FBI revealed that the IRS was focusing on conservative groups for further review of their tax-exempt status. News reports first said the targeting was done by IRS agents in the Cincinnati office trying to cope with a flood of applications for 501(c)(4) exemptions. It turned out that on June 29, 2011, Lois Lerner, head of the IRS division overseeing tax-exempt groups, had learned of the targeting and insisted that the search be broadened to all political and lobbying groups, but, according to the New York Times, the IRS branch employees kept it narrow.

The revelation provoked Obama to say at a press conference last Friday, “If you’ve got the IRS operating in anything less than a neutral and nonpartisan way, then that is outrageous. It is contrary to our traditions.” He said that “people have to be held accountable, and it’s got to be fixed.”

Attorney General Eric Holder said Tuesday that the FBI is “coordinating with the Justice Department to see if any laws were broken in connection with those matters related to the IRS.”

On Monday, two Senate committees, both run by Democrats, announced they’d hold investigations while House committees run by Republicans have vowed to do the same.

“The IRS’s actions are disgraceful, and [it] attacks the very heart of our democracy,” Rep. Peter King (R-Seaford) said in a statement. “It warrants a full congressional and criminal investigation.”

Rep. Steve Israel (D-Huntington) echoed his outrage. “I’m deeply disturbed by reports that the IRS targeted certain groups,” he said in a statement. “I’m eager to review the Inspector General’s report later this week. If some at the IRS took actions that were politically motivated, they must be held accountable, along with those at the highest levels of the agency. We must make sure that the IRS maintains its integrity as an impartial agency.”

In the 2012 election, Rep. Tim Bishop (D-Southampton) was in the crosshairs of millions of dollars spent in negative advertising by Karl Rove’s Crossroads GPS, a 501(c)(4) tax-exempt group. The advertising never mentioned Bishop’s Republican opponent, Randy Altschuler, but painted the five-term LI  congressman as a scoundrel embodying “everything that’s wrong with Washington.”

Rather than comment on what it felt like to be outspent by a 501(c)(4), Bishop expressed his concern about the IRS’ apparently politically motivated audits.

“I am deeply troubled by reports that some IRS employees applied undue scrutiny to certain groups seeking  tax-exempt status,” said Bishop in a statement. “The enforcement authority of the IRS was designed to operate independently of this kind of political pressure. I expect the report to be issued this week by Treasury Department’s Inspector General will be the basis for immediate action and strong, comprehensive measures to ensure fairness and impartiality at the IRS.”

John Gomez, who ran against Israel in 2010 on the Republican and Conservative lines, had the full support of Long Island’s Tea Party, he said. But he had an uphill battle trying to level the playing field financially.

“Steve Israel was sitting on $4 million—I had $50,000,” Gomez recalled. By the election, he said he’d raised about half a million dollars and had to respond to letters from the Federal Election Commission charging him with campaign fund-raising violations that he later overturned in court. He likens what he went through with the FEC to what Tea Party groups faced with the IRS audits.

“Strategically, it’s a way to slow these organizations down,” Gomez says. “You can’t spend time organizing and disseminating information because this is really what your purpose is: to make people aware that the government is out of control.”

Steve Flanagan, director of the Conservative Society for Action, one of the first Tea Party groups founded on LI more than four years ago, shared Gomez’s concern. “If any of these allegations are true, we’re talking about a serious abuse of power here,” he said.

Before the news broke about the IRS audits, the Tea Party Patriots Citizens Fund, based in Washington, DC, sent out an urgent fund-raising request to its supporters past and present. One recipient was an 89-year-old woman who provided this reporter with her mailing. Among its calls to “provide critical financial and tactical support to principled conservative candidates at every level,” it said: “We can’t stand by and allow Obama, the Democrats and so-called ‘moderate’ Republicans to transform the United States into a weak, dependent, second-rate nation.”

From the wording above, it’s hard to say that this group is engaged in purely “social welfare.” But that’s what the tax-exempt battle apparently is about.

From a historical perspective, the White House has used the IRS to political ends for decades, starting with President Franklin D. Roosevelt, who employed it against Sen. Huey Long (D-La.) and Rep. Hamilton Fish, a New York congressman. During the Eisenhower administration, the IRS gave the FBI the tax returns of key members of the American Communist Party.

President Richard Nixon had the IRS audit muck-raking reporters who were critical of him, such as Newsday’s Bob Greene. And President Ronald Reagan used the IRS to challenge the tax-exempt status of the non-profit Mother Jones magazine, forcing one of the leading left-wing publications in the country to spend hundreds of thousands of dollars in legal fees to defend itself. It won.

Fox News anchor Megyn Kelly asks Karl Rove a math question on Election Night that he didn’t want to get right.

It was after midnight, President Barack Obama’s dominance over Gov. Mitt Romney in the scintillating second presidential debate was fading into memory, and I was leaving the media filing center at Hofstra, where I’d been spun by the likes of John Kerry and John Sununu, when I found myself trailing Megyn Kelly, Fox News’ stunning Nordic anchorwoman. She was sashaying down the aisle in a pair of very tight designer jeans that could have been lavender or pink (I’m a bit color blind, as my wife would concede), with two younger women in tow, who both looked exhausted trying to keep up with her.

I don’t watch a lot of Fox News, and usually the only times I’ve seen Kelly on television Jon Stewart was making fun of her network to score points. Certainly, it was never from that angle. But I had to admit she looked as captivating in person as she appears on screen.

Then I chastised myself for having the lascivious thought flash through my lizard brain that her pants were on the losing end of the battle of the bulge  and that someone who’s so influential  in the body politic might want to wear something with more, shall we say, gravitas and decorum—like a “respectable Republican cloth coat” perhaps. What a sexist thing to think, I heard myself. Why not just comment on her conservative views? Her curtsy to Republican talking points? Her intellectual dishonesty? But I couldn’t restrain myself.

What I did do, however, is refrain from acting out my animosity against her role of putting a happy face on a Rupert Murdock news outlet that a growing number of people firmly believe has done serious harm to our Republic. Watching her get into a private limo, I could see her cast as Goebbels’ mistress in a Fassbinder film.

Of course, that’s so unfair, and completely unbalanced. For one thing, I’d been shamelessly snapping cell phone pictures of MSNBC’s Lawrence O’Donnell and Chris Matthews, two of my favorite news commentators, who were also on campus that day, and hoping that I’d get to meet Rachel Madow. (Alas, it was not meant to be.)

But on Election Night, Megyn Kelly had an on-air interaction with frequent Fox contributor Karl Rove, the Republican mastermind once dubbed “Turd Blossom” by George W. Bush, that has sparked a conversation across the country about her journalistic principles and the future of the right-wing network that has made her so successful.

Rove, as head of the Crossroads Super PACs, had poured more than $300 million into campaign attack ads on behalf of Romney and Republican candidates (like Randy Altschuler in New York’s 1^st Congressional District). Rove was reluctant to let Fox call Ohio for Obama because it was “premature.”  After all, he’d just gotten off the phone with Jon Husted, Ohio’s Republican secretary of state who’d been doing all he could to disenfranchise Democratic voters in the Buckeye State.

With permission from her higher-ups, Kelly went down the hall to grill Arnon Mishkin, head of Fox’s decision team: “You tell me whether you stand by your call in Ohio given the doubts Karl Rove just raised.” Mishkin replied with a smile: “We are actually quite comfortable with our call in Ohio.”

To Rove, she posed the now unforgettable question:  “Is this just math that you do as a Republican to make yourself feel better?”

With the election complete, arithmetic has become one of the overriding memes of the 2012 campaign. First, President Bill Clinton used it at the Democratic National Convention to demolish the unrealistic Romney/Ryan budget plan; then it adroitly came from the lips of Megyn Kelly to subtract Rove from the untruths in his talking points.

Clearly, the Fox News Channel audience was uncomfortable with that call as well as with the results coming fast and furious from the other key swing states, which all added up to defeat. Viewership drastically declined from 10 million viewers at 10 p.m. to 5 million by 11:30 p.m.  And no matter how many were watching Fox at the peak, there weren’t enough of them at the polls to make a difference for their side. Romney needed millions more—and not just those living in what was once the Confederacy, which he won (with one huge exception), but elsewhere across the nation.

Facing up to Americans’ rejection of their great white hope for the White House was extremely hard for those weaned off reality by Fox News’ commentariat and their fellow travelers.

For example, take the Washington Post’s insightful article on Beth Cox, a die-hard conservative Christian who was a true-blue volunteer for the Romney campaign in Tennessee: “Everything in her version of America had confirmed her predictions: the confident anchors on Fox News; the Republican pollsters so sure of their data; the two-hour line outside her voting precinct, where Romney supporters hugged and honked for her handmade signs…” The college-educated homemaker could not believe that Virginia and Colorado went for Obama. “Do they want drugs, dependency, indulgence? Don’t they remember what this country is about?”

As an American, she’s entitled to her beliefs, but people who think like her are not entitled to impose their beliefs on the majority who do not. That’s the lesson of this election—for both the Republican Party and Fox News.

So, the network that has most profited from encouraging those minority beliefs has come under scrutiny from the minority party it most supports. As Media Matters, a liberal watchdog group, recently summed it up: “Fox News’ relationship with the GOP is under fire after electoral losses.” Republican speechwriter David Frum has written that the Grand Old Party has “been fleeced, exploited, and lied to by a conservative entertainment complex,” and GOP pollster Frank Luntz has said that Fox viewers “ought to be outraged because, day in and day out, they were told” Romney would win.

Rush Limbaugh doesn’t need a pretty face on talk radio.

In The Atlantic Conor Friedersdorf has written  that “right-leaning outlets like Fox News and Rush Limbaugh’s show are far more intellectually closed than CNN or public radio. If you’re a rank-and-file conservative, you’re probably ready to acknowledge that ideologically friendly media didn’t accurately inform you about Election 2012.”

Let’s not rush to conclusions. Two years ago Nielsen Media Research reported that Fox News’ audience is whiter and older than CNN’s or MSNBC’s; 20.7 percent of CNN’s audience is African American, same for MSNBC. Just 1.38 percent of Fox’s viewers are Caucasian and the age of  the average Fox News viewer is 65—sort of like the Republican Party today. The demographics do bring to mind the bumper sticker, “I don’t believe the liberal media,” and the poor misguided schlub behind the wheel. Guys who slap that sentiment on the rear of their cars have nowhere else to go but heaven, clutching that cold, dead remote control in their gnarled hands. They’re not watching MSNBC any time soon.

So let’s not expect the loss on Nov. 6 to affect Fox News chairman Roger Ailes’ bottom line. The 71-year-old man who’s worked closely for Nixon, Reagan and Bush just inked a contract that pays him $30 million a year, according to the Washington Post and New York Magazine. Certainly, for what Kelly brings to the screen, he must be giving her more than chump change to stick around. She showed on Election Night that she’s not eye candy. It helps to recall that she got a political science degree from Syracuse University and a law degree from Albany Law School, where she edited the law review.

And let’s not forget that Gretchen Carlson, the prominent blonde in the tight skirt on “Fox & Friends” struggling to keep her legs crossed while wedged between those conservative couch potato doofusses, graduated with honors from Stanford University and studied at Oxford. To say she dumbs down for the morning talk show is an understatement.

Fox News wasn’t on the ballot but it was behind the election, and thanks to the voters its political hold on the electorate has clearly slipped. Will it get more extreme or join the main stream?

So far, the auguries don’t look promising. For one thing, conservative godfather Richard Viguerie, who masterminded direct mail, has been telling Republicans not to change their principles, just their tone. And in a recent promo for his show, Fox’s Sean Hannity, who bats behind Bill O’Reilly and the other outspoken white guys on the channel, sounded like a crazy person ranting in Times Square while holding a crudely drawn cardboard sign.

For sanity’s sake, Americans can afford to think about changing channels and I hope many more do.