Newly uncovered IRS documents show the agency flagged political groups based on the content of their literature, raising concerns specifically about “anti-Obama rhetoric,” inflammatory language and “emotional” statements made by non-profits seeking tax-exempt status.
The internal 2011 documents, obtained by USA TODAY, list 162 groups by name, with comments by Internal Revenue Service lawyers in Washington raising issues about their political, lobbying and advocacy activities. In 21 cases, those activities were characterized as “propaganda.”
The list provides the most specific public accounting to date of which groups were targeted for extra scrutiny and why. The IRS has not publicly identified the groups, repeatedly citing a provision of the tax code prohibiting it from releasing tax return information.
More than 80% of the organizations on the 2011 “political advocacy case” list were conservative, but the effort to police political activity also ensnared at least 11 liberal groups as of November 2011, including Progressives United, Progress Texas and Delawareans for Social and Economic Justice.
The IRS controversy first exploded in May, when Exempt Organizations Director Lois Lerner admitted that the IRS had targeted Tea Party groups for additional scrutiny beginning in early 2010. The IRS placed a hold on those applications for more than 20 months, an inspector general’s investigation found.
On Nov. 16, 2011, IRS lawyers in Washington sent a list of cases to front-line agents in Cincinnati, along with comments and guidance on how to handle political organizations.
Tax law experts say those comments appear to show IRS employees trying to apply the murky rules governing political activities by social welfare groups.
But the American Center for Law and Justice, a nonprofit legal institute that represents 23 of the groups appearing on the IRS list, said it appears to be “the most powerful evidence yet of a coordinated effort” by the IRS to target Tea Party groups.
“The political motivations of this are so patently obvious, but then to have a document that spells it out like this is very damaging to the IRS,” said Jay Sekulow, chief counsel for the ACLJ. “I hope the FBI has seen these documents.”
The IRS categorized the groups as engaging in several advocacy-related activities that could have barred them from tax-exempt status, such as lobbying and “propaganda.”
But the word “propaganda” doesn’t appear in section 501(c)(4), which governs the social welfare status that most Tea Party groups were applying for, said John Colombo, a law professor at the University of Illinois. Instead, it appears in section 501(c)(3), which governs public charities.
“There would be no reason I would think to flag them if it’s for a 501(c)(4) status,” Colombo said. “That’s very odd to me.”