Tuesday, May 14, 2013

IRS approved liberal groups while Tea Party in limbo


WASHINGTON -- In February 2010, the Champaign Tea Party in Illinois received approval of its tax-exempt status from the IRS in 90 days, no questions asked.

That was the month before the Internal Revenue Service started singling out Tea Party groups for special treatment. There wouldn't be another Tea Party application approved for 27 months.

In that time, the IRS approved perhaps dozens of applications from similar liberal and progressive groups, a USA TODAY review of IRS data shows.

As applications from conservative groups sat in limbo, groups with liberal-sounding names had their applications approved in as little as nine months. With names including words like "Progress" or "Progressive," the liberal groups applied for the same tax status and were engaged in the same kinds of activities as the conservative groups. They included:

• Bus for Progress, a New Jersey non-profit that uses a red, white and blue bus to "drive the progressive change." According to its website, its mission includes "support (for) progressive politicians with the courage to serve the people's interests and make tough choices." It got an IRS approval as a social welfare group in April 2011.

• Missourians Organizing for Reform and Empowerment says it fights against corporate welfare and for increasing the minimum wage. "It would be fair to say we're on the progressive end of the spectrum," said executive director Jeff Ordower. He said the group got tax-exempt status in September 2011 in just nine months after "a pretty simple, straightforward process."

• Progress Florida, granted tax-exempt status in January 2011, is lobbying the Florida Legislature to expand Medicaid under a provision of the Affordable Care Act, one of President Obama's signature accomplishments. The group did not return phone calls. "We're busy fighting to build a more progressive Florida and cannot take your call right now," the group's voice mail said.

Like the Tea Party groups, the liberal groups sought recognition as social welfare groups under Section 501(c)(4) of the tax code, based on activities like "citizen participation" or "voter education and registration."

In a conference call with reporters last week, the IRS official responsible for granting tax-exempt status said that it was a mistake to subject Tea Party groups to additional scrutiny based solely on the organization's name. But she said ideology played no part in the process.

"The selection of these cases where they used the names was not a partisan selection," said Lois Lerner, director of exempt organizations. She said progressive groups were also selected for greater scrutiny based on their names, but did not provide details. "I don't have them off the top of my head," she said.

The IRS did not respond to follow-up questions Tuesday.

Congressional critics say the IRS's actions suggest a political motives: "This administration seems to have a culture of politics above all else," said Rep. Bill Flores, R-Texas. "A lot of the actions they take have a political side first, and put government second."

Flores complained to the IRS last year after the Waco Tea Party's tax-exempt application was mired in red tape. The IRS asked the group for information that was "overreaching and impossible to comply with," Flores said: Transcripts of radio interviews, copies of social media posts and details on "close relationships" with political candidates.

When Flores complained last year -- asking pointed questions about the IRS treatment of Tea Party groups -- the IRS response didn't acknowledge that it had treated conservative groups differently. "They did more than sidestep the issue," he said. "They flipped me the finger."

Before the IRS started separating out Tea Party applications, getting tax-exempt status was routine -- even for conservative groups. The Champaign Tea Party's treasurer, Karen Olsen, said the process was smooth, with no follow-up questions from the IRS.

Olsen, a retired IRS revenue agent, defended the agency.

"If you suddenly see a great increase in some kind of activity, and you don't understand why, then it might be reasonable to look more closely at what's happening with those applications," she said. "I'm not certain that there was an error on the part of the IRS at all. I know that's not a popular opinion."

Some liberal groups did get additional scrutiny, although they still got their tax-exempt status while the Tea Party moratorium was in effect. For the "independent progressive" group Action for a Progressive Future, which runs the Rootsaction.org web site, the tax-exempt process took 18 months and also involved intrusive questions.

Co-founder Jeff Cohen said tax-exempt status is a privilege, so he didn't mind answering the intrusive questions, as long as those questions were consistent and fair.

"From my perspective, if the IRS can hold up legitimate Tea Party applications today and get away with it, then who knows if progressive groups will be held up and specially scrutinized in a few years. It's utterly unacceptable, if that's what happened," he said.

Follow @gregorykorte on Twitter.

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