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The IRS’s Intern Audit
They audited a conservative education group at the same time it was targeting 501(c)(4) applications.

Classroom at the Leadership Institute in Virginia.

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Andrew Stiles

What about your interns?

That in effect was the question the IRS asked a longstanding conservative organization between 2011 and 2012, according to documents obtained by National Review Online. The tax-collecting agency sought to identify and track student interns at the Leadership Institute, a conservative educational organization based in Virginia. 

At around the same time the IRS began its “inappropriate targeting” of conservative organizations applying for nonprofit status — a practice detailed in a Treasury Department inspector general’s report published Tuesday — the agency conducted an audit of the Leadership Institute. The institute has offered workshops, seminars, internships, and other training programs for young conservatives and grassroots activists since its founding in 1979.

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The timing of the audit, which focused on the group’s 2008 tax return, could indicate that the IRS targeting went beyond those applying for tax-exempt status to include existing conservative groups. (The number of conservative groups known to have been targeted has already grown from about 75, as initially claimed, to nearly 500.)

For instance, Watchdog.org, a free-market-oriented, nonprofit news site founded in 2009, has said that, although it was not audited by the IRS, an analysis of its website traffic over the past four years revealed a significant number of visits traced back to the IRS, as well as the Executive Office of the President.

As part of the auditing process, the IRS asked the Leadership Institute for “copies of applications for internships and summer programs,” and a list of all interns and students selected in 2008. Additionally, the IRS sought “information regarding where the interns physically worked and how the placement was arranged,” and wanted to know where the interns and program attendees were employed afterwards. (LI has published the timeline of the investigation and the details on its website.)

It is not the only known instance of the IRS seeking information about conservative students. Kevin Kookogey, who founded a conservative mentoring program for high-school and college students in Tennessee, told National Review Online the IRS asked him to “identify the students I’m teaching and what I’m teaching them” as part of his application for 501(c)(3) nonprofit status.

There is reason to believe the IRS audit of the Leadership Institute is connected to the targeting of other groups applying for tax-exempt status. For example, the institute has conducted training programs with a number of the tea-party groups whose applications were targeted, according to LI’s staff. At least one group targeted during its 501(c)(4) application process, the Hawaii Tea Party, was asked specifically about its relationship with the Leadership Institute.

The timing of the audit appears to coincide with the timeline detailed in the Treasury inspector general’s report. The IRS targeting is said to have begun in July 2011, one month after the Leadership Institute was informed of its audit. LI also received a request for additional documentation at roughly the same time as groups applying for tax-exempt status, in early 2012.

“The IRS’s indefensible behavior is worse than we first thought, as it targeted both new and existing conservative groups in politically motivated attacks,” institute founder and president Morton Blackwell said in a statement. “Fortunately the Leadership Institute had the resources to stand up to the government’s bullying and intimidation.” 

Although the IRS ultimately determined that the Leadership Institute’s 2008 tax return was in order, the group was forced to turn over more than 23,400 pages of documents in the process, a timely ordeal that cost the group more than $50,000 in attorneys’ fees.

“It amounts to harassment,” Blackwell tells NRO. “I am hopeful that an example is made of the people who are responsible.”

— Andrew Stiles is a political reporter for National Review Online.



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