September 17, 2013 Gregory Korte, USA TODAY 8:56 p.m. EDT
WASHINGTON — Newly uncovered IRS documents show the agency flagged political groups based on the content of their literature, raising concerns specifically about “anti-Obama rhetoric,” inflammatory language and “emotional” statements made by non-profits seeking tax-exempt status.
The internal 2011 documents, obtained by USA TODAY, list 162 groups by name, with comments by Internal Revenue Service lawyers in Washington raising issues about their political, lobbying and advocacy activities. In 21 cases, those activities were characterized as “propaganda.”
The list provides the most specific public accounting to date of which groups were targeted for extra scrutiny and why. The IRS has not publicly identified the groups, repeatedly citing a provision of the tax code prohibiting it from releasing tax return information.
More than 80% of the organizations on the 2011 “political advocacy case” list were conservative, but the effort to police political activity also ensnared at least 11 liberal groups as of November 2011, including Progressives United, Progress Texas and Delawareans for Social and Economic Justice.
The IRS controversy first exploded in May, when Exempt Organizations Director Lois Lerner admitted that the IRS had targeted Tea Party groups for additional scrutiny beginning in early 2010. The IRS placed a hold on those applications for more than 20 months, an inspector general’s investigation found.
On Nov. 16, 2011, IRS lawyers in Washington sent a list of cases to front-line agents in Cincinnati, along with comments and guidance on how to handle political organizations.
Tax law experts say those comments appear to show IRS employees trying to apply the murky rules governing political activities by social welfare groups.
But the American Center for Law and Justice, a nonprofit legal institute that represents 23 of the groups appearing on the IRS list, said it appears to be “the most powerful evidence yet of a coordinated effort” by the IRS to target Tea Party groups.
“The political motivations of this are so patently obvious, but then to have a document that spells it out like this is very damaging to the IRS,” said Jay Sekulow, chief counsel for the ACLJ. “I hope the FBI has seen these documents.”
The IRS categorized the groups as engaging in several advocacy-related activities that could have barred them from tax-exempt status, such as lobbying and “propaganda.”
But the word “propaganda” doesn’t appear in section 501(c)(4), which governs the social welfare status that most Tea Party groups were applying for, said John Colombo, a law professor at the University of Illinois. Instead, it appears in section 501(c)(3), which governs public charities.
“There would be no reason I would think to flag them if it’s for a 501(c)(4) status,” Colombo said. “That’s very odd to me.”
In three cases, IRS lawyers noted that groups appeared to be connected to Republican politicians: Stand Up for Our Nation Inc., linked to former Alaska governor Sarah Palin; Reform Jersey Now Inc., linked to Gov. Chris Christie; and American Solutions for Winning the Future, founded by former House speaker Newt Gingrich. Gingrich’s group was approved last year.
Five groups were flagged as having “anti-Obama” materials in their applications or on their websites.
For instance, the IRS said the website of the Patriots of Charleston contains “negative Obama commentary.” Though the IRS didn’t cite examples, a November 2011 article on the group’s site says: “Obama’s and the Democrats’ track record of disaster is based upon a combination of their ignorance and their fundamental desire to convert America into a ruling class of wealthy all-powerful elitists and a single class of serfs.”
“The web site, as we explained to them on multiple occasions, is really a blog” that members can submit commentary to, said Joanne Jones, the group’s vice chairwoman. “I’m not going to tell you we weren’t political. We were to an extent, but we were within the limits of the law. For example, there’s one clear-cut issue: We did not endorse candidates.”
“To focus in on somebody saying something anti-Obama,” she said, “it’s almost like the speech police there. It’s disturbing. It’s the kind of overreach that leads into Obamacare.”
The group received its tax exemption in September 2012.
RHETORIC OF SOME GROUPS QUESTIONED
It wasn’t just anti-Obama rhetoric the IRS was looking out for. Progress Texas was identified by the IRS as engaging in lobbying, propaganda and political activities. IRS lawyers in Washington noted “anti-Rick Perry” rhetoric, referring to the Republican Texas governor, then a presidential candidate.
Progress Texas received a tax exemption as a social welfare group in June, 2012.
Campaign-finance watchdogs say the IRS scrutiny came out of a justified effort to police “dark money” in politics. After the U.S. Supreme Court ruled in 2010 that corporations and unions — and even non-profit groups — could engage in independent political advertising, social welfare groups became a vehicle for funneling undisclosed cash into the election system.
That’s the position of Progressives United, a group founded by former senator Russ Feingold, D-Wis., that itself appeared on the 2011 IRS target list.
“The fact that our group received some scrutiny does not change at all our opinion that scrutiny like this from the IRS, it’s their job. The law applies to us as it would any conservative group,” said Progressives United’s Josh Orton. “I feel like there’s this group of campaign finance nihilists who want to expand this into an argument that there should be no scrutiny at all. They want a wild west of election law, because they want to continue using secret corporate money to influence elections.”
Crossroads GPS, a group affiliated with GOP strategist Karl Rove, spent $70 million on the 2012 election. Its 2010 application for a tax exemption, obtained by the non-profit news organization Pro Publica last year, said it would spend 50% of its resources on “public education.” In the 2011 list, the IRS noted “significant anti-Obama rhetoric.” Crossroads has not received a tax exemption.
‘WE ARE TOTALLY ABOVE BOARD’
The Tea Party of North Idaho filed its tax-exempt application in February, 2010 — the same month IRS screeners in Cincinnati first brought Tea Party applications to the attention of officials in Washington, according to IRS employee testimony before a congressional committee.
A lawyer in the IRS Exempt Organizations Technical Unit in Washington wrote the Idaho group had “No significant amount of clear campaign intervention; however little issue advocacy or educational; significant inflammatory language, highly emotional language, little to no educational information on issues.”
The IRS lawyers recommended that screeners in Cincinnati look for other materials — including “press releases, commentary, articles, and research reports,” according to the IRS list.
That’s when Leslie Damiano, who co-founded the North Idaho group, started getting what she considered to be intrusive questions from the IRS. She said the tax agency wanted to know who her donors were, and what companies they own. They wanted to know the educational background of the group’s board members. And they wanted to know whether candidates were invited to the group’s meetings, and whether it made endorsements.
“We’re a conservative organization. We invited some independents,” she said. “We never had any rallies that were off the charts by any stretch of the imagination.”
Frustrated with the process, the Tea Party of North Idaho withdrew its application in 2012.
“We had an accountant, we had a bookkeeper. We were totally above board with everything we did,” Damiano said.
REDUCING THE NATIONAL DEBT
Some groups caught in the IRS’ net had no connection to national politics on either side. The Citizens for the Preservation of Rural Murrysville says it’s “dedicated to the preservation of the open and natural, rural character of Murrysville, Pa.,” although the IRS said it endorsed some local candidates. The Sarasota Bay Tiger Club is one of several similar Florida clubs that provide “a non-partisan forum on current political issues.” The club says it has “never endorsed political candidates nor advocated a particular ideology,” but the IRS said in its spreadsheet that it was “unclear” if that was the case.
The list also includes the Association to Reduce the National Debt, which was seeking to be recognized as a charity so it could solicit tax-deductible contributions — and give those contributions to the U.S. Treasury to put toward the national debt.
Founder Seth Eisenberg said the group was not political — and he told the IRS that.
IRS tax specialists noted “no political campaign activities.” But two years after applying, the association still hasn’t gotten his ruling letter. And without that letter, contributions are not tax-deductible and no one will give, he said.
All for a group that said it wanted to give the government money.
“I thought this would be a fast-tracked application. A no-brainer. But it got caught up in this whole political controversy,” Eisenberg said. “It’s the greatest irony that ever was.”
Follow @gregorykorte on Twitter.
June 6, 2013 By Greg Richards
In testimony before the House Ways and Means Committee Monday, we heard from Alexis de Toqueville’s “little battalions” of social relationships, political pedagogy, and cultural argument — i.e., the soul of American civic society. These are the ones who were abused by the IRS in being denied timely consideration of their applications for tax-exempt status to put them on a level playing field with the forces of the left. And shocking testimony it was, well worth watching on C-SPAN (www.c-span.org, then look for “Conservative Groups Testify on IRS Scrutiny”).
In an essay three days ago in American Thinker, Herbert E. Meyer (who, as vice chairman for National Intelligence Estimates at the CIA, in the face of overwhelming conventional wisdom, including from the Agency itself, identified for William Casey and President Reagan that the Soviet Union, far from being a permanent presence on the world scene, was in fact decaying from inside and on the verge of collapse, thus providing the basis for Reagan’s strategy to win the Cold War) suggested that there would never be a smoking gun in the IRS conspiracy because (a) it is not necessary and (b) that is not the way things work at the top. The leftists are all working from the same playbook.
Sander Levin, the ranking Democratic member of House Ways and Means, in what is doubtless his understanding of what went wrong, said in his opening statement, “The handling of these applications was gross mismanagement by the IRS Exempt Organization Division.”
But it wasn’t. It was a well-executed mission.
Remember the status of the Tea Party. It had sprung up spontaneously after Rick Santelli on CNBC struck a nerve by articulating the unfairness of the bailouts by the federal government. The Tea Party had no organization. It had no single leader or leadership structure. And yet it struck the 2010 elections like a tuna hitting a fishing line and returned control of the House to the Republicans.
So when the left in all its components — and remember that there are no stronger advocates of high bureaucratic pay and big government than those who work for it — looked out at the coming landscape for the 2012 election, what was the greatest threat? Another strike at the polls by the Tea Party, which at that time did not show up on conventional measurements of political activity and power.
The Tea Party and its confrères represented a real but unmeasurable threat not just to the Obama administration per se, but to the leftist project in general. It was a new, anti-leftist force that had to be brought under control.
What is the real attitude of the IRS to conservatives? Contempt. Which we saw from both Mr. Shulman and Mr. Miller, former and removed acting commissioners of the IRS, last week.
Question to Douglas Shulman, IRS commissioner for five years until late last year: “It appears you visited the White House 95 times [since increased] during your tenure as IRS Commissioner. What did you do on those visits?”
Mr. Shulman: “Participated in the Easter Egg Roll with my children.”
But if we are not likely to get a smoking gun and if the IRS has a culture of contempt for conservatives, what can we expect to get from these hearings? A lot. Not least the vocabulary to deal with the crisis.
Targeting of conservative groups and suppressing of conservative participation in the public forum by the IRS…
…is not “a mistake.”
…is not “a failure.”
…is not “due to incompetence.”
…is not “a breakdown.”
Rather, it is a manifestation of the leftist project. A leftist storm has blown through the IRS, and we are seeing in the hearings the debris line left by that storm. But now that the IRS has been infested by the leftist project, cleaning up the debris is not enough.
If conservative cultural and political activity is to continue unmolested in this country, the IRS must be eliminated. It is too disdainful of American mores, and it is too powerful. Neither of those things will change with a new commissioner and whatever is the final disposition of Lois Lerner.
Of course, the nation must have a revenue collection agency. As a first cut, perhaps the new agency would have six regional and independent divisions. They would be located in offices around the country, and there would be no single IRS commissioner in Washington.
The six agency heads would report to Congress every six months on the activities of their agencies on penalty of perjury. There would be new offices of ombudsman for each regional agency. The ombudsmen would testify to Congress along with the agency heads every six months as to the number and type of complaints they had received and what had been the disposition of those complaints.
All salaries in the new six agencies would start at 10% below the equivalent levels in the current IRS. There would be no union in the six agencies, because the agencies must represent the interests of the country and that alone. Something like that.
The current IRS is sick and corrupt. This is what the Democrats, even the ones appalled by the activities just revealed, do not understand. They think this behavior is isolated. It isn’t. It is the leftist project come to fruition, promoting unlimited power for government and brooking no opposition.
The limited government of enumerated powers created by the Founding Fathers and embedded in the Constitution is illegitimate in the eyes of the left. That is why this mission was not “a mistake.”
We must act on this knowledge, or we will be complicit in the dispossession of our liberty. They say about power, “Use it or lose it.” We must act while we still can.