IRS, con­ser­va­tive groups spar over tax-ex­empt sta­tus

The Washington Times Daily - - Politics - BY AL­LAN FRAM

The In­ter­nal Rev­enue Ser­vice is em­broiled in bat­tles with tea party and other con­ser­va­tive groups who claim the gov­ern­ment is pur­posely frus­trat­ing their at­tempts to gain tax-ex­empt sta­tus.

The fight fea­tures in­stances in which the IRS has asked for vo­lu­mi­nous de­tails about the groups’ post­ings on so­cial­net­work­ing sites like Twit­ter and Face­book, in­for­ma­tion on donors and key mem­bers’ rel­a­tives, and copies of all lit­er­a­ture they have dis­trib­uted to their mem­bers, ac­cord­ing to doc­u­ments pro­vided by some or­ga­ni­za­tions.

While re­fus­ing to com­ment on spe­cific cases, IRS of­fi­cials said they are merely try­ing to gather enough in­for­ma­tion to de­cide whether groups qual­ify for the tax ex­emp­tion. Most or­ga­ni­za­tions are ap­ply­ing un­der sec­tion 501(c)(4) of the fed­eral tax code, which grants tax-ex­empt sta­tus to cer­tain groups as long as they are not pri­mar­ily in­volved in ac­tiv­ity that could in­flu­ence an elec­tion, a de­ter­mi­na­tion that is up to the IRS.

The tax agency would seem a nat­u­ral tar­get for tea party groups, which es­pouse smaller and less in­tru­sive gov­ern­ment and lower taxes. Yet over the years, the IRS has pe­ri­od­i­cally been ac­cused of po­lit­i­cal vendet­tas by lib­er­als and con­ser­va­tives alike, usu­ally with­out merit, tax ex­perts say.

The lat­est dis­pute comes early in an elec­tion year in which the IRS is un­der pres­sure to mon­i­tor tax-ex­empt groups — like the Re­pub­li­can-lean­ing Cross­roads GPS and Demo­crat-lean­ing Pri­or­i­ties USA — which can shovel un­lim­ited amounts of money to al­lies to in­flu­ence cam­paigns, even while not be­ing re­quired to dis­close their donors.

Con­ser­va­tives say dozens of groups around the coun­try have re­cently had sim­i­lar ex­pe­ri­ences with the IRS and say its in­for­ma­tion de­mands are in­tru­sive and po­lit­i­cally mo­ti­vated. They com­plain that the sheer size and de­tail of ma­te­rial the agency wants is de­signed to pre­vent them from achiev­ing the tax des­ig­na­tions they seek.

“It’s in­tim­i­da­tion,” said Tom Zaw­is­towski, pres­i­dent of the Ohio Lib­erty Coun­cil, a coali­tion of tea party groups in the state. “Stop do­ing what you’re do­ing, or we’ll make your life mis­er­able.”

Au­thor­i­ties on the laws gov­ern­ing tax-ex­empt or­ga­ni­za­tions expressed sur­prise at some of the IRS’ re­quests, such as the vol­ume of de­tail it is seek­ing and the iden­tity of donors. But they said it is the agency’s job to learn what it can to help de­cide whether tax-ex­empt sta­tus is war­ranted.

“These tea party groups, a lot of their ma­te­rial makes them look and sound like a po­lit­i­cal party,” said Mar­cus S. Owens, a lawyer who ad­vises tax­ex­empt or­ga­ni­za­tions and who spent a decade head­ing the IRS di­vi­sion that over­sees such groups. “I think the IRS is try­ing to get be­hind the rhetoric and fig­ure out whether they are, at their core, a po­lit­i­cal party,” or a group that would qual­ify for tax-ex­empt sta­tus.

The tea party was first widely em­bla­zoned on the public’s mind for their noisy op­po­si­tion to Pres­i­dent Obama’s health care over­haul at con­gres­sional town-hall meet­ings in the sum­mer of 2009. Sup­port from its ac­tivist mem­bers has since helped nom­i­nate and elect con­ser­va­tive can­di­dates around the coun­try, though group lead­ers say they are chiefly ed­u­ca­tional or­ga­ni­za­tions.

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