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The IRS Explains Itself

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While high-ups from the Internal Revenue Service have been publicly testifying -- or declining to testify -- this month before congressional panels probing the targeting of conservative groups' applications for tax-exempt status, the agency’s communications department has quietly posted a routine-sounding Q&A on its website.

Labeled “Questions and Answers on 501(c) Organizations,” the posting offers “some basics” on the issue that has caused the IRS “to receive a variety of questions related to the exempt organization issues.”

Echoing some of the agency bosses’ testimony, the answers note that reviewing applications for tax-exempt status is “part of the IRS’s responsibility,” adding that 501c(4) organizations—including the “Tea Party” and “Patriot” themed versions are at the heart of the controversy—“are not required to get IRS approval, but often seek it.”

The agency explains how it determines whether an applying organization engages in “political activity” and whether that activity is “limited.” The estimated 70,000 annual applications, it notes, are centralized “so they can be worked on in a consistent manner” at an office in Cincinnati staffed by fewer than 200 employees. These specialists “may consult with tax law specialists in Washington on how the law applies to their case.”

The number of applications for both C3’s and C4’s has “more than doubled in recent years,” along with the proportion potentially engaging in political activity, the item says.

But the IRS did err, the text acknowledges, in using a “short cut” to determine which cases would be centralizing based on “specific names, terms and policies (such as Tea Party and Patriot),” though “case selection during these periods was not limited to these criteria,” the IRS said. Such mistakes caused unnecessary delays and “over-expansive information requests,” the agency confessed.

Of the 300 cases originally centralized (that number has since grown to 470), only 70 included the name Tea Party, while the rest include “organizations of all political views.” And neither the IRS nor the Treasury Inspector General for Tax Administration found any evidence of “political bias,” the text says.

Finally, if you want to know the names of the 175 advocacy groups whose tax-exempt status applications have already been approved, the IRS lists them here.

Charlie Clark joined Government Executive in the fall of 2009. He has been on staff at The Washington Post, Congressional Quarterly, National Journal, Time-Life Books, Tax Analysts, the Association of Governing Boards of Universities and Colleges, and the National Center on Education and the Economy. He has written or edited online news, daily news stories, long features, wire copy, magazines, books and organizational media strategies.

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