IRS Subjected Liberal Nonprofits to Extra Scrutiny, Audit Finds

IRS Subjected Liberal Nonprofits to Extra Scrutiny, Audit Finds

In addition to conservative groups, the Internal Revenue Service subjected a number of progressive groups applying for tax-exempt status to extra scrutiny, an audit report from the Treasury Inspector General for Tax Administration (TIGTA) finds.

The report, Review of Selected Criteria Used to Identify Tax-Exempt Applications for Review (122 pages, PDF), examined the use of seventeen screening criteria — out of a total of two hundred and fifty-nine in use between 2004 and 2013 — to flag applications for additional scrutiny that were not the focus of TIGTA's May 2013 audit. The earlier audit determined that between 2010 and 2012 the IRS had "used inappropriate criteria to select tax‑exempt applications for further review" based on names and policy positions, resulting in requests for additional and often unnecessary information and lengthy application processing delays.

The criteria analyzed in the latest audit include "ACORN Successors," "green energy," "medical marijuana," "occupy," and "progressive," along with "border patrol," "CA politics," "healthcare legislation," and "paying national debt." Based on a sample of eighty-three confirmed cases in which the organizations were selected for extra scrutiny based on those criteria and sixty-three others selected while those criteria were in use, TIGTA found that twenty-three groups received requests for additional information and that thirty had to wait more than two years for their applications to be processed.  

Although the 2013 audit did not assess the political leanings of the targeted groups, it contributed to the furor over the agency's allegedly biased treatment of Tea Party and other right-leaning groups. And while a Senate panel exonerated the IRS of political bias in 2014, Democrats cited the latest audit as further proof that the agency was not politically motivated, Politico reports.

"While handled poorly, groups on both sides of the political spectrum were treated the same in their efforts to secure tax-exempt status," said Ron Wyden (D-OR.), ranking member of the Senate Finance Committee.

"Due to the unique nature of the seventeen criteria, it is difficult to compare the criteria to each other, or to compare in aggregate to the criteria reviewed in the 2013 audit," the inspector general's office said a statement, noting that a majority of the cases in the 2013 report were applications for 501(c)(4) status while a majority of those in the latest audit were for 501(c)(3) status. "However, TIGTA did find that, while the number of organizations impacted is significantly less than the number detailed in the 2013 report, some organizations in the current report also experienced significant delays and received requests for unnecessary information."

"Agency Statement on Audit Report: “Review of Selected Criteria Used to Identify Tax-Exempt Applications for Review”." Treasury Inspector General for Tax Administration Press Release 10/05/2017. "Review of Selected Criteria Used to Identify Tax-Exempt Applications for Review." Treasury Inspector General for Tax Administration Report 09/28/2017. Bernie Becker, Toby Eckert. "Audit Indicates Liberal Nonprofits Also Got Extra IRS Scrutiny." Politico 10/05/2017.