Democrats pressure IRS inspector over scrutiny of liberal groups

WASHINGTON Wed Jun 26, 2013 5:46pm EDT

J. Russell George, Treasury Inspector General for Tax Administration of the U.S. Treasury, testifies before the Senate Finance Committee in Washington May 21, 2013. REUTERS/Gary Cameron

J. Russell George, Treasury Inspector General for Tax Administration of the U.S. Treasury, testifies before the Senate Finance Committee in Washington May 21, 2013.

Credit: Reuters/Gary Cameron

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WASHINGTON (Reuters) - Democrats on Wednesday intensified pressure on Internal Revenue Service Inspector General Russell George, who is becoming entangled in the controversy over the targeting of conservative groups for extra scrutiny begun by his office.

Last month's report by the Treasury Inspector General for Tax Administration (TIGTA), headed by George, set off a furor in Washington, leading President Barack Obama to fire the agency's chief as the FBI and Congress opened investigations.

A key component of the report was the use of a "be on the lookout" (BOLO) list, which included partisan terms like "Tea Party" and "Patriot," and was used by low-level IRS workers in Cincinnati to screen tax-exempt applicants for greater scrutiny.

Sander Levin, the top Democrat on the Ways and Means Committee in the U.S. House of Representatives, this week released IRS documents showing that words like "progressive" and "blue" were also used to identify liberal-leaning groups.

On Wednesday, Levin wrote to George, questioning his office's statements that the scope of the original audit was limited to conservative terms because it was responding to a request from Republican Representative Darrell Issa.

"There is increasing evidence that the May 14, 2013 audit was fundamentally flawed and that your handling of it has failed to meet the necessary test of objectivity and forthrightness," Levin wrote in the letter.

George, an appointee of Republican President George W. Bush, has up to this point escaped much scrutiny, at least compared to IRS officials under fire at various congressional hearings probing the matter.

Any member of Congress can request an audit. Republicans had asked TIGTA to investigate whether Tea Party and other conservative, tax-exempt applications were receiving inappropriate treatment by the IRS, said TIGTA spokeswoman Karen Kraushaar.

DEMOCRATS RESPOND

Levin said TIGTA's audit examined a group of tax-exempt applicants broader than the conservative groups it was requested to investigate. He cited several pages from the May report suggesting it studied whether any groups were targeted and delayed while seeking tax exempt status.

Democrat Representative Gerald Connolly of Virginia said the new information about progressives on the BOLO list raises concerns about testimony George gave to Congress last month.

In a letter to George, Connolly said George's sworn statements "were at best incomplete, if not misleading."

When asked if TIGTA uncovered any targeted progressive groups, George said a range of tax-exempt applicants investigated had "neutral" names.

"You couldn't necessarily attribute it to one particular affiliation or another," George told the oversight committee on May 22.

Republicans say that simply being on the "BOLO" list does not mean that progressive groups were subject to extra scrutiny. Democrats claim that based on their analysis of the nearly 300 cases reviewed by George, liberal groups were stalled as well.

(Reporting By Kim Dixon; Editing by Cynthia Osterman)

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Comments (7)
USAPragmatist wrote:
O this will get the rightie/Obama haters panties in a bunch, looks like the IRS was targeting ANY political type group for extra scrutiny.

As i have said before two simple solutions..

1. Better-not allow any groups that does ANY political activities tax exempt status.

2. not quite as good-go back to the orignal rule for these 501(C) or whatever groups that was mysteriously changed in the late 50′s.

Jun 26, 2013 6:42pm EDT  --  Report as abuse
flashrooster wrote:
I agree, USAPragmatist: We should stop giving any 501(C) group tax exempt status. As I understand it, an organization can receive tax exempt status if they spend no more than 49% of their money on political stuff. How about if these groups spend ANY of their money on politics they are required to pay taxes? That would make more sense.

The truth is that Darrell Issa is simply abusing his position. There should be ways of removing such people from office. Abusing your position should be illegal. The IRS has a responsibility to do the impossible. They are expected to sift through all of these organizations that are requesting tax exempt status. As the number of groups applying increases, the funding for the IRS is being cut, thanks to the Republicans in their zeal to reduce the size of government so that it’s small enough to drown in a bathtube (and, more importantly, so that it can’t run interference when corporations are looking for legislative advantage in ways detrimental to the American people.) So the IRS is forced to get creative, so they pull groups using terms often used by political groups, since it’s political groups they’re supposed to be looking for. Makes perfect sense. They red flag groups with terms like “tea party” and “progressive.” They give them a little more scrutiny. However, this didn’t prevent them from awarding any of the applicants tax exempt status. That’s more disturbing to me than their use of politically charged terms. But who can blame them? If they disqualify ANYONE they risk losing their jobs. Darrell Issa has single-handedly bumped our country up a notch on the dysfunctional scale. We can’t keep allowing this to happen and survive.

Jun 26, 2013 7:11pm EDT  --  Report as abuse
TheNewWorld wrote:
@USAPragmatist

I agree with you in principle, but the fact is, these groups are allowed tax exempt status under the current laws.

501(c)(4) organizations may inform the public on controversial subjects and attempt to influence legislation relevant to its program and, unlike 501(c)(3) organizations, they may also participate in political campaigns and elections, as long as its primary activity is the promotion of social welfare. The tax exemption for 501(c)(4) organizations applies to most of their operations, but contributions may be subject to gift tax, and income spent on political activities – generally the advocacy of a particular candidate in an election – is taxable. An “action” organization generally qualifies as a 501(c)(4) organization. An “action” organization is one whose activities substantially include, or are exclusively, direct lobbying or grass roots lobbying related to advocacy for or against legislation or proposing, supporting, or opposing legislation that is related to its purpose. A 501(c)(4) organization may directly or indirectly support or oppose a candidate for public office as long as such activities are not a substantial amount of its activities.

It is convoluted and open for huge abuses. However the IRS should be auditing 501c4s and not preventing them in the first place. It is legal for you and I to set up a 501c4 and give out information, have a website, collect unlimited donations, and place ads around an election to influence legislation. Lets say we are both pro-marijuana decriminalization. We can choose people to support based on their views, people to oppose based on their views, and this is all well within the confines of a 501C4.

What the IRS did was wrong, and it is yet another abuse of their power.

Jun 26, 2013 7:27pm EDT  --  Report as abuse
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