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IRS targeted groups critical of government

May 13, 2013

Washington Post

I wonder if the IRS also singled out groups for harassment that demand the government honor the First Amendment and not mix religion with government?

If our government masters don't like the part of the First Amendment that gives us free speech, I suspect they will treat the part that gives us freedom of religion with the same disrespect!!!

IRS targeted groups critical of government, documents from agency probe show

By Juliet Eilperin, Published: May 12

At various points over the past two years, Internal Revenue Service officials singled out for scrutiny not only groups with “tea party” or “patriot” in their names but also nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general.

The documents, obtained by The Washington Post from a congressional aide with knowledge of the findings, show that the IRS field office in charge of evaluating applications for tax-exempt status decided to focus on groups making statements that “criticize how the country is being run” and those that were involved in educating Americans “on the Constitution and Bill of Rights.”

The staffers in the Cincinnati field office were making high-level decisions on how to evaluate the groups because a decade ago the IRS assigned all applications to that unit. The IRS also eliminated an automatic after-the-fact review process Washington used to conduct such determinations.

Marcus Owens, who oversaw tax-exempt groups at the IRS between 1990 and 1999, said that delegation “carries with it a risk” because the Cincinnati office “isn’t as plugged into what’s [politically] sensitive as Washington.”

Owens, now with the firm Caplin & Drysdale, said that before the agency’s most recent reorganization, it had a series of “tripwires in place” that could catch unfair targeting, including the fact that the IRS identified its criteria for special scrutiny in a public manual.

“There’s no longer that safety valve, and as a result, the IRS has been rolling the dice ever since,” said Owens, who worked at the agency for nearly a quarter-century and now represents some organizations seeking tax-exempt status.

The IRS came under withering attack from GOP lawmakers Sunday. Sen. Susan Collins of Maine, a moderate Republican, described the practice as “absolutely chilling” and called on President Obama to condemn the effort.

“This is truly outrageous,” she said on CNN’s “State of the Union,” adding that even though White House spokesman Jay Carney has said the matter deserves an investigation, “the president needs to make crystal clear that this is totally unacceptable in America.”

In March 2012, then-IRS Commissioner Douglas H. Shulman, who was appointed by President George W. Bush, told Congress that the agency was not targeting conservative groups. On Sunday, the agency declined to answer questions about whether senior officials asked IRS exempt organizations division chief Lois G. Lerner and her staff in Cincinnati about this heightened scrutiny before testifying it did not take place.

“There has to be accountability for the people who did it,” House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) said on NBC’s “Meet the Press,” adding: “And, quite frankly, up until a few days ago, there’s got to be accountability for people who were telling lies about it being done.”

The appendix of the inspector general’s report — which was requested by the House Oversight and Government Reform Committee and has yet to be publicly released — chronicles the extent to which the IRS’s exempt organizations division kept redefining what sort of “social welfare” groups it should single out for extra attention since the 2010 Supreme Court ruling Citizens United v. Federal Election Commission. That decision allowed corporations and labor unions to raise and spend unlimited sums on elections as well as register for tax-exempt status under Section 501(c)(4) of the tax code, as long as their “primary purpose” was not targeting electoral candidates.

The number of political groups applying for tax-exempt status more than doubled in the wake of the Citizens United ruling, forcing agency officials to make a slew of determinations despite uncertainty about the category’s ambiguous definition.

Of the 298 groups selected for special scrutiny, according to the congressional aide, 72 had “tea party” in their title, 13 had “patriot” and 11 had “9/12.” Lerner, who apologized Friday for the targeting of such groups, described it as a misguided effort to deal with a flood of applications for tax-exempt status. She did not release the names of the groups.

On June 29, 2011, according to the documents, IRS staffers held a briefing with Lerner in which they described giving special attention to instances where “statements in the case file criticize how the country is being run.” She raised an objection, and the agency adopted a more general set of standards. Lerner, who is a Democrat, is not a political appointee.

But six months later, the IRS applied a new political test to social welfare groups, the document says. On Jan. 15, 2012, the agency decided to look at “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform movement,” according to the appendix in the IG’s report.

The agency did not appear to adopt a more neutral test for 501(c)(4) groups until May 17, 2012, according to the timeline in the report. At that point, the IRS again updated its criteria to focus on “organizations with indicators of significant amounts of political campaign intervention (raising questions as to exempt purpose and/or excess private benefit.)”

Campaign reform groups have been pressing the IRS for several years to conduct greater oversight of nonprofits formed in the wake of the Citizens United case, given that many have become heavily involved in elections. “But this isn’t the type of enforcement we want,” said Paul Ryan, a senior counsel at the Campaign Legal Center. “We want nonpartisan, non-biased enforcement.”

Loyola Law School professor Ellen Aprill, who specializes in tax law, said any groups that have applied for tax-exempt status has “opened themselves up to scrutiny” by the IRS. “It’s part of their job to look for organizations that may be more likely to have too much campaign intervention,” she said. “But it is important to try to make these criteria as politically neutral as possible.”

Aprill said one of the problems is the agency’s top officials have not provided clear enough guidelines on what constitutes too much political activity for a social welfare group because it’s been “a hot potato,” and that now with this new controversy, “it’s going to make it even more difficult to do so.”

Toby Marie Walker, president of the Waco Tea Party, said the IRS subjected her group to a series of unreasonable requests after it applied for tax-exempt status in June 2010. The requests came in early 2012, Walker said, after being initially informed by an official in the Cincinnati field office that he was “sitting on a stack of tea party applications and they were awaiting word from higher-ups as to how to process them.”

The agency asked the group’s treasurer to supply information on its “close relationship” with current candidates and elected officials as well as future candidates, along with detailed information about its contributors and members. It also asked for transcripts of any radio interviews its officials had done and hard copies of any news articles mentioning them.

“That would take me years to do,” Walker said, noting that in some cases, Chinese media outlets referred to her organization. “Am I responsible for every news article across the globe?”

The group had even more difficulty providing transcripts and details of speakers at its events, since they hosted informal gatherings such as “rant contests” where anyone could come and express their views.

While the IRS awarded the Waco Tea Party tax-exempt status about six weeks ago, Walker said the group was now considering suing the agency since the process not only consumed time and effort but prompted the group to scale back its 2012 get-out-the-vote operation. “We were afraid to do it and get in trouble,” she said.

Sal Russo, chief strategist for the Tea Party Express, said that even though the agency’s actions intimidated tea party adherents, he gives the IRS “credit for standing up and admitting” it targeted them. And while only two of the agency’s officials — the commissioner and the chief counsel — are political appointees, Russo said the administration needs to conduct better oversight.

“The culture is set at the top,” Russo said. “Obviously you can’t control what every employee does. But you have to set a standard, particularly with the IRS, to be squeaky clean.”

Josh Hicks and Julie Tate contributed to this report.

Discuss this topic and other political issues in the politics discussion forums.

Playing politics with tax records


Playing politics with tax records

By Editorial Board, Published: May 10

A BEDROCK principle of U.S. democracy is that the coercive powers of government are never used for partisan purpose. The law is blind to political viewpoint, and so are its enforcers, most especially the FBI and the Internal Revenue Service. Any violation of this principle threatens the trust and the voluntary cooperation of citizens upon which this democracy depends.

So it was appalling to learn Friday that the IRS had improperly targeted conservative groups for scrutiny. It was almost as disturbing that President Obama and Treasury Secretary Jack Lew have not personally apologized to the American people and promised a full investigation.

“Mistakes were made,” the agency said in a statement. IRS official Lois Lerner explained that staffers used a “shortcut” to sort through a large number of applications from groups seeking tax-exempt status, highlighting organizations with “tea party” or “patriot” in their names. The IRS insisted emphatically that partisanship had nothing to do with it. However, it seems that groups with “progressive” in their titles did not receive the same scrutiny.

If it was not partisanship, was it incompetence? Stupidity, on a breathtaking scale? At this point, the IRS has lost any standing to determine and report on what exactly happened. Certainly Congress will investigate, as House Majority Leader Eric Cantor (R-Va.) promised. Mr. Obama also should guarantee an unimpeachably independent inquiry.

One line of questioning should focus on how the IRS’s procedures failed to catch this “shortcut” before its employees began using it. Another should center on how this misguided practice came to light, and on what the IRS planned and plans to do about it. Ms. Lerner was responding to a question when the news first came out; it’s not clear whether the government intended otherwise to disclose what had happened. Nor have officials been clear whether disciplinary measures have been taken.

Did some officials hope never to reveal this wrongdoing? Did others hope it could quickly get lost in the weekend news cycle? Misguided, if so. We hope to hear Democratic leaders as well as Republican ones loudly saying so.

The agency said that it now has rules in place to make sure this sort of thing never happens again. How could such basic safeguards not have existed in the first place? And what are the new rules? In response to our questions, officials did not say.

Thankfully, it’s a safe bet that the decision on whether to answer such questions won’t rest solely with the agency for much longer.

Lingering questions about the IRS targeting of conservative groups


Lingering questions about the IRS targeting of conservative groups

By Josh Hicks, Published: May 13, 2013 at 6:00 am

The Internal Revenue Service left Washington abuzz over the weekend with a Friday admission that it singled out conservative groups for special scrutiny when they applied for tax-exempt status during the 2012 election cycle.

The Treasury Inspector General for Tax Administration (TIGTA) is expected to release a report on the matter sometime this week, with the findings based on an audit the agency conducted at the request of the House Oversight and Government Reform Committee.

The Washington Post and other media outlets have obtained details of that report, but many questions remain about the targeting actions. We’ll get to those below, but first let’s review a few things about this development.

Lois G. Lerner, who heads the IRS division that reviews tax-exemption applications, has described the targeting efforts as an “absolutely inappropriate” means of dealing with the high volume of applications after the 2010 Citizens United v. Federal Election Commission Supreme Court decision, which allowed corporations and labor unions to raise and spend unlimited sums, as well as to register for tax-exempt status as long as their “primary purpose” was not political.

Documents obtained from the upcoming report show that Lerner’s division repeatedly redefined what types of groups it should single out for special scrutiny.

The targeting of conservative groups started around March of 2010, according to the audit documents. But Lerner, a Democrat, “instructed that the criteria be immediately revised” after a briefing on the matter in late June of 2011.

The IRS adopted a more generic set of standards the next month, but it changed the criteria again in January 2012, deciding to look at “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform movement,” according to the audit documents.

In May 2012, the agency finally settled on a more neutral standard, targeting groups “with indicators of significant amounts of political campaign intervention,” the documents said.

The Washington Post has created a timeline to show how the search criteria changed and what IRS officials told Congress at various times.

Now for those lingering questions.

How high did this go?

No media outlets have provided an answer yet as to whether anyone in the White House or the Treasury Department, which oversees the IRS, knew about the targeting.

The White House has simply said it supports more formal investigations and disciplinary action, if necessary. Lerner has stated that she did not contact the Obama administration about the matter.

Did the IRS target liberal groups as well?

Documents from the inspector general’s report show that the IRS singled out groups with names containing “tea party,” “patriot,” and “9/12 Project,” as well as nonprofit organizations that criticized the government and sought to educate Americans about the U.S. Constitution. (9/12 Project was founded by right-wing political commentator Glenn Beck).

Those search criteria match the profile of conservative groups that were active during the 2012 election, but the latter two don’t necessarily rule out liberal organizations. For example, the left-leaning group Patriot Majority could have raised a flag, either by accident or deliberately.

The IRS targeted 298 groups for special scrutiny, according to a congressional aide with knowledge of the report. Seventy-two had “tea party” in their title, while 13 had “patriot” and 11 had “9/12,” the aide said.

The audit documents do not expressly state whether the IRS targeted liberal applicants, but it’s possible.

Why didn’t officials acknowledge targeting when lawmakers inquired?

At least three House Republicans asked the IRS about its policies toward reviewing tax-exemption applications after complaints that the agency was singling out conservative groups for intense scrutiny.

Darrel Issa (R-Calif.) and Jim Jordan (R-Ohio) sent queries to Lerner from the Oversight and Government Reform committee, while Charles Boustany (R-La.), a member of the Ways and Means committee, demanded answers from the IRS.

On March 27, 2012, Issa and Jordan asked Lerner how the IRS selected groups for special scrutiny and which organizations were chosen.

Lerner’s reply didn’t mention the targeting of conservative groups — even though the audit documents show she knew about it by then — or name any entities that the IRS had singled out. Instead, she said identifying the targeted applicants that were ultimately approved would require additional work — a “manual review of each file” — and that IRS code prohibited her from providing information about groups that were not approved.

A timeline provided by the Ways and Means committee indicates that the IRS made no mention of targeting conservative groups in five separate responses to inquiries by Boustany.

Did the IRS commissioner talk to Lerner before testifying to Congress?

The Washington Post posed this question to the IRS, but the agency did not respond. Why does it matter?

In March 2012, IRS Commissioner Douglas Shulman testified on this issue before a House Ways and Means subcommittee, adamantly denying that the IRS singled out groups for special scrutiny. “There’s absolutely no targeting,” he said. “This is the kind of back and forth that happens to people [who apply for tax-exempt status.]”

That testimony came nearly 10 months after Lerner instructed her division to change its search criteria. Had Shulman consulted her, he might have known about the agency’s targeting — assuming Lerner would not withhold that information.

For more federal news, visit The Federal Eye, The Fed Page and Post Politics. To connect with Josh Hicks, follow his Twitter feed, friend his Facebook page or e-mail E-mail with news tips and other suggestions.