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Tea Party "Working The Refs" in IRS Scandal

Tea Party "Working The Refs" in IRS Scandal

by Bill Berkowitz
May 21, 2013

Diogenes was a fifth century BC Greek philosopher, and a rather controversial one at that. Also known as Diogenes the Cynic, it is said that he took a vow of poverty and often lived in a barrel. He was a social critic long before social critics became cool. Everything we know about Diogenes is through anecdote since none of his writings have survived the centuries. He is probably best known for a stunt: carrying a lamp during the day and claiming to be searching for an honest man. Which brings me, some 2400 years later, to strapping on a headlamp and searching for an honest rendering of the IRS "Scandal" that has been monopolizing the news over the past ten days or so.

With horse racing's Triple Crown no longer up for grabs -- Oxbow defeated Kentucky Derby winner Orb and seven other horses in the Preakness Stakes -- the mainstream media and conservative media and advocacy groups are in search of a whole different kind of Trifecta.

In the spirit of not letting facts get in the way of a good story, the mainstream and conservative media have glommed onto the IRS "Scandal," trying to link it with the Benghazi screw up (but no conspiracy), and the Justice Department's chilling efforts to spy on journalists, and are reveling in calling it Obama's Scandal Trifecta.

While the crux of the scandal is seen as the IRS being overzealous when looking into Tea Party and other conservative groups applying for 501(c)(4) status, the real scandal might be how ill-equipped the IRS has been to actually ferret out groups that are have been doing political work, not social welfare work as required by the IRS to receive 501(c)(4) status.

A new report by the Institute for Research & Education on Human Rights (IREHR) titled "The Tea Party And The IRS 'Scandal': The Actual Facts Of The Case," approaches the IRS kerfuffle with an attempt to ferret out truth from fiction.

According to the IREHR report, "A May 14 draft report by the Treasury Inspector General for Tax Administration found that none of the 296 questionable applicants had been denied, 'For the 296 potential political cases we reviewed, as of December 17, 2012, 108 applications had been approved, 28 were withdrawn by the applicant, none had been denied, and 160 cases were open from 206 to 1,138 calendar days (some crossing two election cycles).'"

There was only one 501(c)(4) applicant that was refused tax-exempt status: the Maine chapter of Emerge America, which trains Democratic women to run for office. "Although the group did no electoral work, and didn't participate in independent expenditure campaign activity either, its partisan nature disqualified it from being categorized as working for the 'common good,'" the IREHR report stated.

What has gotten lost in the feeding frenzy surround the IRS is the actual partisan political involvement of many of the Tea Party groups applying for 501(c)(4) status.

Take the First Coast Tea Party of Jacksonville, Florida. It applied for 501(c)(4) status in 2009 and received it in 2011. According to the IREHR report, First Coast was involved with the Romney/Ryan campaign for the presidency: "Commenting about the recent IRS controversy on Facebook, the group declared 'We file a tax return, account for every penny. We do not endorse candidates that is a no no.'" However, "In an August 30, 2012 Facebook post, ... the group advertised a Jacksonville rally for Republican presidential candidate Mitt Romney and his vice presidential nominee Paul Ryan, adding, 'bring your chairs and your signs, make sure they know that the First Coast Tea Party is and has been helping their campaign.'"

Sensing a campaign running aground in Florida, First Coast declared a "state of emergency" on Facebook and issued the following plea: "FLORIDA FRIENDS, IF YOU LIVE IN ANY OF THESE 3 COUNTIES GET OFF THE COUCH NOW, GET YOUR FRIENDS OFF THE COUCH. GET TO THE REPUBLICAN HEADQUARTERS AND OFFER AND THEN DO SOME WORK. PHONES, (YOU CAN EVEN DO THESE CALLS FROM HOME) AND WALK AND KNOCK. NOW. WE CANNOT LOSE FLORIDA TO OBAMA. NOW. THIS IS MOST CRITICAL." [Emphasis in Original]

The Louisville, Kentucky Tea Party was granted 501(c)(4) status in 2009. "Nevertheless, it published a list of 'officially tea party endorsed candidates for the 2011 Kentucky primary.' They also published an article 'The Rationale for Romney-Ryan,' arguing for Tea Partiers to vote for the Republican candidate."

The Central Valley Tea Party Inc., a regional California Tea Party group "was granted the much more politically limiting IRS 501(c)(3) tax status back in 2009," according to the IREHR report. "Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. The prohibition applies to all campaigns including campaigns at the federal, state and local level. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes."

The Central Valley Tea Party has a well-documented history of partisan political involvement from publishing articles in its newsletter in support of the Romney/Ryan ticket, and a so-called non-partisan "Voter Guide," to encouraging supporters to actively volunteer for Republican Party candidates.

Via email, I asked Devin Burghart, the vice president of IREHR and the author of "The Tea Party and the IRS 'Scandal,'" a few questions:

Bill Berkowitz: Were Tea Party and other conservative groups subjected to undue burdens?

Devin Burghart: Anyone who's ever gone through the process knows that the path to IRS non-profit status can be lengthy and burdensome. Given that the Inspector General's investigation, which found more than two-thirds of the groups involved in significant political intervention (which is normally disqualifying), additional scrutiny seems well warranted. More importantly, despite evidence of some pretty egregious violations, not a single group has actually been denied status.

BB: What was the IRS supposed to be doing and why did it come up short; or did it come up short?

DB: The IRS was supposed to be certifying that "social welfare" groups given non-profit status legitimately met all the criteria and weren't engaged in significant political intervention. An under-staffed office, overwhelmed with more than double previous high levels of applications, granted status to a number of groups that appear to have deserved further scrutiny. It also created a sloppy and insufficient protocol for flagging groups for additional scrutiny. As we noted in the report, rather than the so-called scandal cooked up by Tea Party groups, the real criticism of the IRS may be that it has let so many of these groups get away with what are apparently egregious violations.

BB: How do you see Tea Party groups and other conservative groups capitalizing on it -- publicity, fundraising, and credibility?

DB: By playing to the Tea Party sense of victimhood, groups are hoping that this attack on the IRS will re-invigorate a movement worn by four years of perpetual campaigning. Already we're seeing local rallies against the IRS around the country scheduled. The scandal also helped them replenish their coffers, with every national Tea Party faction fundraising on the issue nonstop since it grabbed headlines.

Beyond the short-term political gain of whipping up another conspiracy, jump-start the Tea Party, and bash President Obama, there are two longer term goals: working the Refs, and defanging health care legislation. In sports, the strategy of complaining loudly about the officiating to referees, in the hopes of getting them to cut you a little slack later on, is known as "working the refs." The current clamor about the IRS scrutinizing Tea Party groups not only gave the Tea Party another opening to malign the administration, it gave them the opportunity to "work" the IRS into ignoring current and future violations by Tea Party groups with non-profit status actively participating in prohibited electoral activity.

Moreover, Tea Party groups see the attack on the IRS as a last ditch effort to gut implementation of the Affordable Care Act. The law mandates that the IRS administer the tax collection and subsidy provision under the law. It will require the IRS to hire new employees. Tea Partiers are invoking the specter of an out of control IRS to once again try and slam on the brakes.

As Burghart pointed out in the report, overt political engagement by Tea Party operatives is pretty much standard operating procedure.

"Rather than the so-called scandal cooked up by Tea Party groups, the real criticism of the IRS may be that it has let so many of these groups get away with what are apparently egregious violations.

"After the firing of several high level IRS employees over this incident, how likely is it that Tea Party groups will be prevented these sorts of violations in the future?"

ENDS

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