WASHINGTON – The Internal Revenue Service is apologizing to Tea Party groups and other conservative organizations for what it now says were overzealous audits of their applications for tax-exempt status.
Lois Lerner, the director of the I.R.S. division that oversees tax-exempt groups, acknowledged on Friday that the agency had singled out nonprofit applicants with the terms “Tea Party” or “patriots” in their titles.
“We made some mistakes; some people didn’t use good judgment,” she told reporters on a conference call. “For that we’re apologetic.”
In a statement, the agency said applications for nonprofit status doubled from 2010 to 2012, a period that coincided with the Tea Party movement.
“As a result, local career employees in Cincinnati sought to centralize work and assign cases to designated employees in an effort to promote consistency and quality,” the statement said. “While centralizing cases for consistency made sense, the way we initially centralized them did not. Mistakes were made initially, but they were in no way due to any political or partisan rationale.”
“The I.R.S. also stresses that our employees – all career civil servants – will continue to be guided by tax law and not partisan issues,” the statement concluded.
The apology could be a significant decision for the I.R.S., which has been caught between Congressional Democrats pressing the agency to more aggressively protect tax-exempt status from overtly political groups and conservative groups claiming harassment.
Campaign finance watchdogs have said for years that 501(c)(4) tax exemptions are widely abused by conservative and liberal groups whose primary purpose is to influence elections, not to promote “social welfare,” as tax-exempt status mandates.
In early 2012, numerous Tea Party-affiliated groups came forward to charge the I.R.S. with harassment for demanding that they fill out extensive – and intrusive – questionnaires before their tax-exempt applications could be approved. The questionnaires demanded detailed membership lists, contact information, logs of activities and other information about the groups’ intentions.
Many of those groups found representation with the conservative American Center for Law and Justice and its outspoken lead lawyer, Jay Sekulow, who accused the I.R.S. of “McCarthyism” intended to stifle conservative speech.
The center called the apology “a significant victory for free speech.”
But the leader of one of the groups that cried foul, the Kentucky 9/12 Project, said he had received no such admission from the agency. Eric Wilson, the group’s director, said he never complied with the I.R.S. questionnaire, which comprised 7 pages, 30 multipart questions and 88 inquiries in all.
Nonetheless, the I.R.S. sent the group a one-paragraph letter on April 1 granting nonprofit status, with no explanation for the protracted process and no regrets, he said.
Organizations that had been pressing for more aggressive enforcement of tax-exemption laws reacted with alarm. Lisa Gilbert, the director of Public Citizen’s Congress Watch division, said the I.R.S. should not be targeting any particular political ideology. But, she said, questioning applicants for tax exemption to determine whether they were primarily political was entirely proper and should be more widely pursued.
“We don’t think it’s inappropriate to ask questions,” she said. “Tax-exempt groups are abusing their tax status to pursue political agendas.”
Under current law, tax-exempt 501(c)(4) organizations are supposed to be “primarily” engaged in social welfare work. In practice, groups like the conservative Crossroads GPS and the liberal Priorities USA appear to spend virtually all their efforts trying to sway elections.
Last year, Senate Democrats began pressing the I.R.S. to more aggressively target such groups. As the Tea Party questionnaires surfaced, the agency released a statement saying, “To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must be primarily engaged in the promotion of social welfare. The promotion of social welfare does not include any unrelated business activities or intervention in political campaigns on behalf of or in opposition to any candidate for public office.”
Lois Lerner, the director of the I.R.S. division that oversees tax-exempt groups, acknowledged on Friday that the agency had singled out nonprofit applicants with the terms “Tea Party” or “patriots” in their titles.
“We made some mistakes; some people didn’t use good judgment,” she told reporters on a conference call. “For that we’re apologetic.”
In a statement, the agency said applications for nonprofit status doubled from 2010 to 2012, a period that coincided with the Tea Party movement.
“As a result, local career employees in Cincinnati sought to centralize work and assign cases to designated employees in an effort to promote consistency and quality,” the statement said. “While centralizing cases for consistency made sense, the way we initially centralized them did not. Mistakes were made initially, but they were in no way due to any political or partisan rationale.”
“The I.R.S. also stresses that our employees – all career civil servants – will continue to be guided by tax law and not partisan issues,” the statement concluded.
The apology could be a significant decision for the I.R.S., which has been caught between Congressional Democrats pressing the agency to more aggressively protect tax-exempt status from overtly political groups and conservative groups claiming harassment.
Campaign finance watchdogs have said for years that 501(c)(4) tax exemptions are widely abused by conservative and liberal groups whose primary purpose is to influence elections, not to promote “social welfare,” as tax-exempt status mandates.
In early 2012, numerous Tea Party-affiliated groups came forward to charge the I.R.S. with harassment for demanding that they fill out extensive – and intrusive – questionnaires before their tax-exempt applications could be approved. The questionnaires demanded detailed membership lists, contact information, logs of activities and other information about the groups’ intentions.
Many of those groups found representation with the conservative American Center for Law and Justice and its outspoken lead lawyer, Jay Sekulow, who accused the I.R.S. of “McCarthyism” intended to stifle conservative speech.
The center called the apology “a significant victory for free speech.”
But the leader of one of the groups that cried foul, the Kentucky 9/12 Project, said he had received no such admission from the agency. Eric Wilson, the group’s director, said he never complied with the I.R.S. questionnaire, which comprised 7 pages, 30 multipart questions and 88 inquiries in all.
Nonetheless, the I.R.S. sent the group a one-paragraph letter on April 1 granting nonprofit status, with no explanation for the protracted process and no regrets, he said.
Organizations that had been pressing for more aggressive enforcement of tax-exemption laws reacted with alarm. Lisa Gilbert, the director of Public Citizen’s Congress Watch division, said the I.R.S. should not be targeting any particular political ideology. But, she said, questioning applicants for tax exemption to determine whether they were primarily political was entirely proper and should be more widely pursued.
“We don’t think it’s inappropriate to ask questions,” she said. “Tax-exempt groups are abusing their tax status to pursue political agendas.”
Under current law, tax-exempt 501(c)(4) organizations are supposed to be “primarily” engaged in social welfare work. In practice, groups like the conservative Crossroads GPS and the liberal Priorities USA appear to spend virtually all their efforts trying to sway elections.
Last year, Senate Democrats began pressing the I.R.S. to more aggressively target such groups. As the Tea Party questionnaires surfaced, the agency released a statement saying, “To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must be primarily engaged in the promotion of social welfare. The promotion of social welfare does not include any unrelated business activities or intervention in political campaigns on behalf of or in opposition to any candidate for public office.”