Politics & Policy

Ignoring the Facts on the IRS

House Democrats pretend, unconvincingly, that the agency was neutral toward tea-party groups.

It’s the lie that won’t die.

House Democrats are not backing away from their claim that the Internal Revenue Service’s targeting of groups applying for tax exemption was politically neutral. Representatives Elijah Cummings and Sander Levin on Tuesday hauled forth another tranche of documents that they say highlight “IRS scrutiny of progressive groups.” It is the duo’s sixth such effort, but this one, Cummings says, “should put a nail in the coffin” of the GOP’s claims that the agency’s actions were politically motivated or aimed exclusively at conservative organizations. That’s because, according to Levin, the latest papers show that IRS scrutiny “covered a broad spectrum of political ideology.” In fact, the documents show just the opposite.

Cummings and Levin, the ranking Democrats on the congressional committees investigating the IRS scandal, make claims that contradict the testimony of key witnesses, who have told investigators that progressive groups were not targeted. The latest is Cindy Thomas, the 35-year IRS veteran who ran the agency’s Cincinnati office during the two-year period when tea-party applications were thrown under the microscope. She had the following exchange with investigators:

Q: Okay. And were [the progressive] cases sent to Washington?

A: I’m not — I don’t know.

Q: Not that you are aware?

A: I’m not aware of that.

Q: As the head of the Cincinnati office you were never aware that these cases were sent to Washington?

A: There could be cases that are transferred to the Washington office according to, like, our [Internal Revenue Manual] section. I mean, there’s a lot of cases that are processed, and I don’t know what happens to every one of them.

Q: Sure. But these cases identified as progressive as a whole were never sent to Washington?

A: Not as a whole.

Thomas’s testimony comes on the heels of the account of an IRS screener who told Congress that, while he “can’t say for sure,” he believes the “progressive” listing on the agency’s now-infamous “Be on the Lookout” lists was “inactive.”

The Democratic duo are also citing as examples of the discrimination against liberal groups several of the IRS’s BOLO lists that instruct screeners to elevate the applications of “ACORN successor groups” for extra scrutiny; a document titled “Heightened Awareness Issues” that also lists those groups; a PowerPoint presentation delivered to screeners in July 2010 indicating that screeners should flag applications containing the terms “progressive” and “emerge” for review because they “may be more than 50% political”; and notes from that presentation.

Perhaps not surprisingly, the ACORN listing appeared in a different section of the BOLO lists than the one for tea-party organizations. The former appeared on the list under the rubric “TAG,” which the materials released by the Democrats themselves indicate was intended to designate organizations to be weeded out for being involved in “abusive tax avoidance transactions” or “activities [that] are fraudulent in nature.” The listing appeared after hidden-camera video showed ACORN employees advising a couple, posing as a pimp and a prostitute, about how to evade taxes and prevent authorities from discovering their activities, which they claimed included human trafficking and child prostitution. It comes as no surprise that, after Congress voted in 2009 to pull ACORN’s federal funding, the IRS would make moves to avoid granting tax exemption to offshoots of the original, corrupt organization. Tea-party groups, by contrast, had done nothing to merit special scrutiny.

By contrast, tea parties remained under the “Emerging Issues” heading of the BOLOs. That’s where groups whose applications related to “significant current events” or for whom “no established tax law or precedent has been established” were listed. Unlike several others listed on that tab, tea-party groups saw their applications automatically elevated to IRS higher-ups for scrutiny. Even the higher-ups couldn’t do their work because, we now know from their testimony, officials even more senior prevented them from carrying it out. So tea-party applications languished, some for over three years, while officials at the top level of the IRS worked diligently (in a charitable reading) to establish a precedent for them, or simply slow-walked them beyond both a midterm and a presidential election.

Cummings and Levin are also drawing attention to the term “emerge.” A source close to the investigation tells National Review Online that the term was added to the BOLO list as a means of ferreting out applications not from liberal organizations in general but from one specific progressive group in particular.

The IRS initially granted tax exemption to the progressive group “Emerge America” but revoked that status in the spring of 2010 when it came to the attention of agency officials that the group is devoted to training women to run for office as Democrats. The group has several state offshoots, including “Emerge Maine” and “Emerge Nebraska”; screeners were instructed to flag those applications because the agency was in the process of revoking the exemption of their parent group. A spokeswoman for Emerge America told Salon’s Joan Walsh in May:

Emerge America and its initial state programs were granted 501(c)(4) status by the IRS several years ago. Later, when a new state program applied for the same status, it was denied because Emerge works only with women who are in the Democratic Party, so the IRS determined this did not meet the definition of “social welfare” for the common good. We believed this denial triggered a review of the Emerge programs that had already been granted c4 status, and consequently those statuses were revoked. Becoming 527 organizations has not hurt our fundraising or organizational expansion — we report our donors and continue our work fully transparently.

David Marshall, an attorney in the IRS chief counsel’s office, supported the agency’s decision to revoke the group’s exemption. He had the following exchange with congressional investigators about the “Emerge America” cases:

Q: And was the issue in that case the level of political activity?

A: There was no question in my mind that there was political activity in that case.

Q: Enough activity to deem it —

A: It was clearly — it was clearly a problematic case. It was decided that it would be denied based on private benefit.

The IRS chief counsel’s office took seven months to come to this conclusion and, during that time, the “Emerge America” affiliates that had already received tax exemption continued to operate with that status.

“There is no comparison between screening applicants for a known bad actor that was having its tax-exempt status revoked after inappropriate conduct had come to light [and] systematic screening for groups who were subjected to inappropriate and disparate treatment above and beyond other groups simply because they had ‘Tea Party’ in their name,” Oversight Committee spokesman Frederick Hill tells National Review Online. “The fact that Emerge was initially approved for tax-exempt status, but had it revoked after its improper behavior came to light, underscores how much more stringent the IRS was with tea-party applicants.”

The IRS correctly denied some liberal groups tax exemption. That, it turns out, is what leading House Democrats mean when they talk about the IRS’s discrimination against their allies.

— Eliana Johnson is NRO’s media editor.


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