IRS headquarters in Washington.

IRS headquarters in Washington. Pamela Au/Shutterstock.com

IRS’s Controversial Review of Nonprofits Was Broader Than Reported, IG Says

Scrutiny of tea party groups that angered Republicans extended to progressive groups too.

Offering new information on an old controversy, a watchdog on Thursday painted an altered image of the Internal Revenue Service’s much-disputed past scrutiny of nonprofits seeking tax-exempt status.

The Treasury Inspector General for Tax Administration—whose 2013 report on nonprofits triggered a major political battle in Congress over alleged political bias—released an updated report that reaches further into the past and evaluates more of the criteria used by IRS screeners in determining whether applicants were truly “social welfare” groups or fronts for political interests.

The response among lawmakers to the new information broke down on party lines.

Past reports found that about one-third of 298 applications flagged for extra screening by the team of specialists included key words such as Tea Party, Patriots, or other right-leaning phrases in their names, while the remainder did not.

The remainder, as Democrats have long argued, included progressive or liberal groups, such as the now-disbanded Association of Community Organizations for Reform Now (ACORN), using key words that suggest environmental or marijuana advocacy, or anti-Wall Street orientations.

The new TIGTA appears to confirm that view.  

Applicants across the political spectrum were subjected to lengthy delays and requests for additional paperwork while IRS officials struggled to define a consistent policy that would justify denying tax-exempt status to groups that are too political. The new TIGTA report, based on a new review of training materials and bipartisan congressional input, focuses on 17 criteria long used by screeners at the IRS Exempt Organizations division. It examines the handling of specific groups, finding, for example, that examination for some politically sensitive groups took nearly five times longer.

The auditors wrote, “Based on our analysis of training materials and available documentation as well as interviews with employees, we identified four versions of the Progressive criterion used from October 2005 through April 2013. Specifically, the available evidence indicates that the IRS thought a new political party was being formed and wanted to process the cases consistently. It was concerned that the organizations were applying for I.R.C. § 501(c)(3) status and were engaging in partisan political activity, which is inconsistent with tax-exempt law.”

Because the IRS since the controversy has revamped its procedures for reviewing nonprofit applications, auditors did not make new recommendations. But the watchdog had disagreed with some of the IRS managers’ reactions to past recommendations, and proposed improvements in consistency and documentation as to why some applicants generated suspicion.

“The response [from IRS managers] states that our report views approvals as evidence that the Exempt Organizations function should not have looked closely at those applications,” TIGTA previously wrote. “We disagree with this statement. Our objection was to the criteria used to identify these applications for review. We believe all applications should be reviewed prior to approval to determine whether tax-exempt status should be granted.”

The IRS officials previously argued that some organizations “may not understand what constitutes political campaign intervention or may provide vague descriptions of certain activities that the EO function knows from past experience potentially involve political campaign intervention.”

Rep. Elijah Cummings, D-Md., the ranking member of the House Oversight and Government Reform Committee who long battled the Republicans over the interpretation of the IRS’s conduct in the affair, issued a review of past rebuttals, saying, “Republicans claimed from the beginning that the Obama White House directed the IRS to target conservative groups for political reasons, but there was never any evidence to support their claims. After Republicans spent years investigating this issue and squandering millions of taxpayer dollars, today’s report confirms what we knew years ago—that progressive groups were also selected for heightened scrutiny and that the tax-exempt status of some progressive groups was severely delayed as a result.”

Former committee chair Rep. Darrell Issa, R-Calif., told Government Executive, “The committee reviewed millions of pages of documents from the IRS during the my chairmanship and we looked at the scrutiny that progressive groups got compared to the treatment of conservatives in a 140-page report that we released in April of 2014. What we found remains true today – conservative groups were subjected to heightened scrutiny that resulted in delays and mistreatment that deprived these groups of their constitutional rights. An honest look at the evidence clearly demonstrates that conservative groups were separated, scrutinized and mistreated far more often than their progressive counterparts.”

John McGlothlin, counsel of the Cause of Action Institute, one of several conservative groups that attacked the IRS for alleged political targeting, said, “This report confirms just how long the IRS has mistreated groups of citizens trying to exercise their legal rights. Unfortunately, the report ignores a cause of this mistreatment which remains unaddressed: an IRS policy that lets the agency delay applications because of media or congressional attention, not because of any flaws in the application itself. Until this rule is changed, the IRS is liable to keep making the same mistakes it has for over a decade.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.