Tea Party conservatives are furious over the IRS admission that self-declared non-profit groups with the words "Tea Party" or "Patriots" in their names were checked for political activity not allowed by the rules for 501(c) not-for-profit organizations. What's wrong with a good charity named Tea Party Patriots, anyway? It's not like such groups would engage in election year political activity or anything, right?
Jenny Beth Martin of the actual group Tea Party Patriots says the IRS engaged in "disturbing, illegal and outrageous abuse of government power" by checking new applicants for non-profit status. The IRS has apologized, but it's still unclear whether Tea Party groups were reviewed more or less than new 501(c) applicants with other political leanings.
Lois Lerner, director of exempt organizations compliance for the IRS, said today "it was insensitive and it was inappropriate" to ask some of the targeted organizations for lists of donors to identify the would-be non-profit groups as fronts for active political campaign organizations.
Of 300 such groups reviewed by a team of "low level" Treasury Department employees based in Cincinnati, a quarter of those were affiliated by name with the Tea Party political movement, which is an active if now-fading part of the Republican Party—the list of the 225 reviewed non-profit applicants that didn't mention Republican tea party and patriot groups wasn't mentioned in coverage of Lerner's apology today.
In a "Fiscal Year 2012 Work Plan" signed by Lerner, the job of checking new self-declared non-profit organizations for prohibited political campaigning and lobbying is described as a routine part of election year monitoring of groups that should be 507 organizations—where donations are not tax-deductible—instead of legitimate non-profit groups that can advocate for causes but not for candidates or ballot measures.
II. Compliance: Using the Form 990
The IRS redesigned the Form 990 to promote transparency and compliance. The new form, which was effective in tax year 2008, has provided EO with a wealth of information on exempt organizations. EO has used this information to develop risk models to assess the likelihood of noncompliance by organizations, allowing more effective use of examination resources. In FY 2012, EO will incorporate information from the revised Form 990 in the following activities.
501(c)(4), (5) and (6) self-declarers
These groups – social welfare organizations; labor, agricultural and horticultural groups; and business leagues, such as a chamber of commerce – can declare themselves taxexempt without seeking a determination from the IRS. EO will review organizations to ensure that they have classified themselves correctly and that they are complying with applicable rules. In FY 2012, EO will send a comprehensive questionnaire to organizations based on Form 990 filings to assess compliance in this area.
As in any election year, EO will continue its work to enforce the rules relating to political campaigns and campaign expenditures. In FY 2012, EO will combine what it has learned from past projects on political activities with new information gleaned from the redesigned Form 990 to focus its examination resources on serious allegations of impermissible political intervention. As in the past, information from outside sources about political campaign intervention will be reviewed by a committee of career civil servants. In addition, other potential violations identified through risk modeling of Form 990 data also will be sent to the committee for evaluation. The committee will focus on identifying the cases to refer for examination. EO will further refine its risk models based on the results of examinations. EO will also ensure reporting and payment compliance with section 527(f).
Senate Republican Leader Mitch McConnell waddled out today to charge the Obama Administration with targeting Tea Party groups. IRS Commissioner Douglas Shulman, who was in charge of the tax-collection agency until after the November 2012 election, was appointed by George W. Bush six years ago.
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