Did the Internal Revenue Service politically target conservative organizations when “front line” IRS employees stalled applications for tax-exempt status?
Absolutely not, said Lois Lerner, director of the IRS’ exempt organizations unit. There was no political motivation at all.
Still, Lerner, during a press conference Friday afternoon, issued an IRS mea culpa for employees who inappropriately flagged organizations with the descriptors, “tea party” or “patriot,” for further review.
“We had a shortcut in the process. It wasn’t appropriate. We learned about it and we fixed it,” Lerner answered emphatically Wisconsin Reporter’s question whether the delays were politically motivated.
But several conservative organizations cried foul during, and many Tea Party organizations filing for 501(c)(4) tax-exempt status said the IRS peppered them with excessive questions to prove they were eligible for the exemption.
Lerner confirmed that employees at a Cincinnati IRS office in 2012 flagged 300 applications for tax-exempt status, and a quarter of those were from the conservative groups. When asked for an exact number, and whether it was safe to assume that 75 applicants were Tea Party or patriot groups, Lerner said, “I’m not good at math.”
“But you’re with the IRS,” a reporter shot back.
“I’m a lawyer,” Lerner responded.
Apparently, there were no liberal-sounding organizations flagged.
A 501(c)(4) is designated for the promotion of social welfare and cannot include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.
“However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax under section 527(f),” according to the IRS.
Lerner claimed the problem was that low-level IRS agents saw a higher number of incomplete or questionable applications come in from “tea party” and “patriot” organizations — questions about the groups’ political involvement. So, the employees began putting the “tea party” and “patriot” marked applications in a “bucket.”
Earlier, the IRS released an apology — kind of. It said between 2010 and 2012, the agency saw the number of applications for 501(c)(4) status double.
“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. This approach has worked in other areas.
“However, the IRS recognizes we should have done a better job of handling the influx of advocacy applications. 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.”