Tea Party and other conservative groups appearing before the House Ways and Means Committee on Tuesday detailed the delays, “burdensome” requests and “intimidation” they felt from interactions with the Internal Revenue Service during the application process for tax-exempt status.
The hearing also surfaced the names of employees of the nine-member Cincinnati Office where applications for 501(c)(3) and 501(c)(4) status were centralized three years before the scandal erupted surrounding apparent targeting of groups based on their names and political rhetoric. And a witness representing the National Organization for Marriage said one IRS employee committed a felony in leaking a list of his group’s donors.
“We … know that Americans were affected by the culture of political intimidation and discrimination that was cultivated by this targeting,” said committee Chairman Rep. Dave Camp, R-Mich., in convening the hearing. “At its core, this investigation is about how and why the IRS was empowered and allowed to use a broken tax code to abuse individuals based on their beliefs -- and seemingly only based on their beliefs….For pursuing that passion, for simply exercising their First Amendment rights -- the freedoms of association, expression and religion, the IRS singled them out.”
Rep. Sander Levin, D-Mich., the ranking member, offered an apology “to the individuals testifying before us, the organizations they represent, and all the others who were caught up in this malfeasance.”
Levin asked for a nonpartisan approach focusing on reforming and clarifying procedures for determining which “social welfare” groups deserve tax-exempt status. After reviewing the “progress” over the past several weeks in restaffing high levels of the IRS, Levin asked the panel to avoid “conjecture” and keep in mind “key facts” from the May report by the Treasury Inspector General for Tax Administration.
He noted that 202 applications out of the 298 set aside for special scrutiny, did not contain the words “Tea Party,” “9/12” or “Patriots.”
Levin also cited a compendium released last week by the trade publisher Tax Analysts breaking down the 176 advocacy organizations that the IRS reported as having been approved for tax-exempt status as of May 9. Tax Analysts research found that 46 of the groups had the key words in their name, 76 were other conservative organizations, 48 were non-conservative organizations, and six organizations’ leanings could not be determined.
Witnesses from the targeted nonprofit groups -- ranging from anti-abortion activists, to promoters of great books to critics of big government to opponents of same-sex marriage -- described the “chilling effect” of dealing with an IRS out to “harass” them and that is “intolerant” of their views.
Kevin Kookogey, founder and president of the Tennessee-based Linchpins of Liberty, which mentors high school and college students on great books, told of waiting 29 months for the IRS to grant 501(c)(3) status and losing out on a $30,000 grant because of the uncertainty. “I’ve since been dormant out of absolute fear that government had a target on my back,” he said.
Becky Gerritson, president of the Wetumpka Tea Party in Alabama, which formed in 2008 to oppose a “government out of control” with spending on bailouts during the financial crisis, said she had sent the IRS its $850 fee with an application, waited 459 days and was then asked to provide 90 pieces of additional information. “They wanted to identify our volunteers, asked who had run for offices, and wanted copies of all our speeches. We knew we were being targeted, so we retained counsel,” Gerritson said. Tax-exempt status was given in July 2012, after 635 days.
A similar story was voiced by Dianne Belsom of the Laurens County Tea Party in South Carolina, who said the process “took hours of time, stress, aggravation” and she still has not won status. “We’re a small-time operation with very little money, so it was a complete waste of time for IRS in terms of what money they would collect,” she said. Responding to lawmakers questions about reforms, Belsom said she had not read the inspector general’s report.
Sue Martinek of the Coalition for Life of Iowa said her donors would not give if she didn’t have 501(c)(3) status, and that an IRS employee named Mrs. Richards told her the agency would grant the status only if her group agreed to stop picketing Planned Parenthood.
John C. Eastman, a law professor at Chapman University who chairs the board of the National Organization for Marriage, said his experience with the IRS made him fear that other agencies such as the Occupational Safety and Health Administration and the FBI might target him.
“Imagine our shock and disgust,” he said, in discovering his donor list-submitted to the IRS with a 990 form -- posted on the website of his political opponent, the Human Rights Campaign, which advocates same-sex marriage. “Felonies were committed, that’s a $5,000 fine and five years in prison,” he said, explaining that his computer staff “delayered” the posted document and uncovered an IRS stamp that appears only on documents being processed inside the agency. He linked the Human Rights Campaign to the Obama presidential campaign.
Eastman said his Freedom of Information Act inquiries to IRS and TIGTA produced no indicators to identify the person responsible, prompting Levin to note that J. Russell George, the Treasury inspector general, had previously testified that disciplinary action had taken place.
Rep. Charles Rangel, D-N.Y., asked Eastman whether the solution to the IRS misconduct might be to remove its responsibility for determining whether “charitable organizations are being used to get people elected.” Eastman replied, “If we get rid of all tax-exempt status and create a level playing field, that would be fine.” Mentioned in oral and written testimony were names of IRS staff in Cincinnati corresponding or talking by phone with the nonprofits, including Robert Choi, Nancy Marks, Sheila May Robinson, Ron Bell, Joseph Herr, Holly Paz and Stephen Seok. Rep. Devin Nunes, R-Calif., proposed that all be interviewed or called to testify.
The debate over the IRS scandal continued its political flavor. Rep. Jim McDermott, D-Wash., noted that such controversy goes back to previous administrations, telling the witnesses that “none of your organizations were kept from organizing or silenced -- we’re talking about whether or not American taxpayers will subsidize your work,” he said. “If you didn’t come in and ask for a tax break, you would never have a question asked of you. Republicans are looking for a conspiracy where there isn’t one.”
That prompted Rep. Paul Ryan, R-Wis., to rebut, pointing to the witnesses and saying with sarcasm, “So, you’re to blame! The facts we now know are that these people were signaled out for their beliefs.”
Meanwhile, the IRS announced another addition to its newly formed management reform team under acting commissioner Danny Werfel. Heather Maloy will become the new deputy commissioner for services and enforcement, moving over from heading the agency’s Large Business and International Division.