Does the IRS really have it in for tea party groups?
Conservative activists and some Republican lawmakers are up in arms about what they describe as the Internal Revenue Service conducting a partisan and ideologically driven campaign against tea party groups around the country. They claim that progressive organizations are not experiencing the same level of scrutiny. However, some progressive groups say they have had similar experiences with the IRS, and at least one expert dismisses the notion that the government is engaged in an ideological witch hunt.
Tea party groups, as well as other non-profit organizations, can apply for tax-exempt status with the IRS. Under the 501(c) designation there are 28 different types of organizations that are exempt from paying some or all federal taxes. Typically, organizations like tea party groups will apply either for 501(c)3 or 501(c)4 status, depending on the organization’s activities. One of the differences between the designations is that donations to a 501(c)3 are tax deductible and donations to a 501(c)4 are not.
In an interview with the Texas Independent, Toby Walker of the Waco Tea Party said that the group applied for 501(c)4 status by filing a 1024 form with the IRS in July of 2010. About a month later the group was informed that the IRS would take 90 days to inform it of an approval, a denial, or a request for more information. “The 90 days came and went,” said Walker. “But on their web site it said that they were behind. We started calling and checking in, and they said they were backlogged.”
Then on Feb. 7 of this year, the Waco Tea Party received a letter from the IRS asking for the answers to 20 questions. “Some of the questions were acceptable,” said Walker. “We knew they were going to ask for more information, and we weren’t surprised to get the letter. What surprised us were a number of the questions that did not pertain to the 1024.”
Walker specifically cited the seventeenth question as being a “red alert.” The question asks if the group has a “close relationship with any candidate for public office or political party.” The question also asks them to describe the relationship.
“I told our treasurer to find out what that means,” said Walker. “When we called the IRS they said that close relationship is subjective and to send them the names, and they will let us know. What does that mean?”
“It was so onerous to answer,” said Walker.
The letter asked for transcripts of the group’s social media activities, including posts on Facebook and Twitter. It also requested transcripts of the group’s online radio show. Walker said that the group was looking at significant costs for printing and shipping all of the documents required. “Just to do our Twitter account would be between 2,500 and 3,000 pages,” said Walker.
Walker said that she knew that “left leaning groups” that filed the same year had been approved. While she did not name the specific groups, Walker referred to a March 8 Roll Call article. The article stated that “several liberal groups contacted by Roll Call did not report similar experiences.”
The article specifically cited Protect Your Care, a 501(c)4 organization that describes its mission as providing a space to “champion the Affordable Care Act,” as an organization that did not receive any such questionnaire letter from the IRS. Roll Call also said that one other unnamed liberal 501(c)(4) organization was granted tax exempt status in May after receiving “only a modest six-part questionnaire.”
Progressives get same treatment
However, interviews conducted by the Texas Independent with three different progressive organizations call into question charges that the IRS is engaged in ideological discrimination. Each organization reported varying degrees of interactions with the IRS, and the amount of time it took each to receive final approval also varied. However, two of the organizations did receive correspondence from the IRS requesting more information, and these letters included similar questions to those received by the Waco Tea Party.
In College Station, Texas, the Brazos Progressives, a coalition of progressive groups and businesses, originally filed for 501(c)3 status and, after being denied, filed for and received 501(c)4 status. Clean Elections Texas, an organization that seeks to build support for a public funding option for candidates seeking public office in Texas, filed for 501(c)4 status and said that they avoided requests for more information by being advised on what specific information the IRS was looking for on the 1024 forms.
A staff member of a progressive organization in Texas spoke with the Texas Independent on the condition of anonymity due to the fact that their organization is undergoing a similar review as the Waco Tea Party. The staff member said that that while the organization’s application for 501(c)3 and 501(c)4 status went through “fairly smoothly,” the organization also had to answer extensive follow-up questions about its finances and mission.
“We received a questionnaire of around twenty questions,” said a staff member. “The letter was looking for a deeper understanding of our organization. There were no questions that were that surprising. I think they [the questions] were just about really drilling into why we wanted to have a tax exempt status. It made us focus on what we are working on and what kind of great good agenda, not just a partisan agenda, we are working toward.”
The staff member, who said that he has worked for multiple 501(c)3 and 501(c)4 organizations during the Clinton, Bush, and Obama administrations, said that he has perceived no difference in how non-profits applying for tax-exempt status are treated. “When the IRS asks questions, then you answer them,” said the staff member. “If you are upset with being upfront and clear about your organization, then maybe you shouldn’t be filing for a 501(c)4 status.”
A comparison of the letter from the IRS released by the Waco Tea Party and of a letter provided by the progressive Texas organization found that both are extensively detailed, asked similar questions, and were tailored to each organization. Both letters asked for copies of the organization’s board meeting minutes and for copies of each organization’s web sites. Questions also addressed specific concerns that the IRS had with each organization but, on the whole, did not appear to treat the organizations differently.
Marcus Owens, an attorney who represents non-profit organizations and has previously worked with the IRS, told the Texas Independent that the IRS is attempting to “get behind the rhetoric” of organizations that are interested in public policy.
“The IRS is asking similar questions of organizations from all over the political spectrum,” said Owens. “The real issue for the IRS when it looks at organizations that apply for 501(c)4 status is whether or not they are social welfare organizations or something else. It’s not whether or not they should be exempt or not, but which code section they should be exempt under.”
While Owens did think that some of the questions were too broad and could have been worded better, he also said that groups applying for tax exempt status have options when questioned by the IRS.
“Fundamentally the IRS has a right ask the questions,” said Owens. “However, the IRS is usually open to negotiating how much information you need to provide. What is clear is that this application process is normally not improved by public posturing. It is the task of the organization or the organization’s representatives to add to the facts and make the case to the IRS.”
Walker says that when the Waco Tea Party received the letter from the IRS, the group contacted its members, volunteers, and supporters. At no time did the group contact the IRS directly for clarification of the questions or to negotiate what information would be acceptable.
The Waco Tea Party also sought out the American Center for Law and Justice for legal advice and representation.
The ACLJ has taken up the cause of the Waco Tea Party and other tea party groups. The ACLJ describes itself as “committed to ensuring the ongoing viability of freedom and liberty in the United States and around the world.” Founded in 1990 by television evangelist Pat Robertson, the group has gained notoriety for taking up conservative causes. These have included providing a legal defense for a public bus driver who was fired for refusing to take a woman to a Planned Parenthood clinic in Texas.
The ACLJ posted a petition on its web site to “Stop the IRS from Silencing the Tea Party.” The petition claims that under the Obama Administration the IRS “appears to be conducting politically motivated investigations of tea party organizations nationwide.” The petition characterizes the investigations as “bullying tactics” that are “designed to silence these organizations.” The petition calls for the Speaker of the House and others to “provide IRS oversight.” Other Republican lawmakers and candidates have joined in supporting these claims, and some have called for congressional investigations.
Rep. Flores gets involved
Republican Rep. Bill Flores (TX-17), whose district includes Waco, penned a letter to House Committee on Oversight on Government Reform Chairman Rep. Darrell Issa stating that he is “concerned that the IRS is targeting tea party organizations around the country.” The letter requests that Issa’s committee open an investigation into the issue and hold congressional hearings. Republican senators also sent a letter to Commissioner of the IRS Douglas Shulman, requesting a response to similar concerns and demanding that the agency hold further “demands for information.”
The Waco Tea Party also taken to social media to make its case that it is being targetted by the IRS, characterizing it as a battle between the “IRS versus the tea party.” Posting multiple status updates and links on Facebook and Twitter, the group has made the claim that you are “either with us or against us and the constitution.” The group has also promoted the petition drive by the ALCJ, tweeting “defend the tea party from the IRS, sign the petition and call Congress.”
Another recent tweet reads: “The left is trying to silence Rush, and the IRS is trying to silence the tea party.”
Walker shares the desire for an investigation and hearings. “Yes there needs to be congressional hearings,” she said. “When a branch of the fed government is violating citizens’ rights, they need to be investigated and put into their constitutional box.”
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