IRS/Tea Party controversy: progressive groups “targeted,” too, and corporate media once again refuses to tell Americans the whole truth

CATEGORY: TaxationLate Saturday we posted a Scrogues Converse Roundtable looking at the IRS/Tea Party controversy. The debate got started when our colleague Dr. Sid Bonesparkle suggested that perhaps the IRS wasn’t out of line in taking a good hard look at organizations dedicated to undermining the tax system trying to organize using 501 status, which is reserved for social welfare oriented nonprofits.

Perhaps Sid was, if anything, too generous regarding the alleged facts of the case. Surprise, surprise: The version of the story that, thanks to the slothfulness of our corporate media establishment, has now been accepted as gospel turns out to be inaccurate.

In short, the IRS did not “target conservative groups.”

The corporate media is blasting out the story that the IRS “targeted conservative groups.” Some in the media say there was “IRS harassment of conservative groups.” Some of the media are going so far as claiming that conservative groups were “audited.”

This story that is being repeated and treated as “true” is just not what happened at all. It is one more right-wing victimization fable, repeated endlessly until the public has no choice except to believe it.

Conservative Groups Were Not “Targeted,” “Singled Out” Or Anything Else

You are hearing that conservative groups were “targeted.” What you are not hearing is that progressive groups were also “targeted.” So were groups that are not progressive or conservative.

All that happened here is that groups applying to the IRS for special tax status were checked to see if they were engaged in political activity. They were checked, not targeted. Only one-third of the groups checked were conservative groups.

Once again: Only one-third of the groups checked were conservative groups.

Conservative groups were not “singled out,” were not “targeted” and in the end none were denied special tax status – even though many obviously should have been.

Bloomberg details three progressive groups that were probed, noting that one of them had its application rejected.

The Internal Revenue Service, under pressure after admitting it targeted anti-tax Tea Party groups for scrutiny in recent years, also had its eye on at least three Democratic-leaning organizations seeking nonprofit status.

One of those groups, Emerge America, saw its tax-exempt status denied, forcing it to disclose its donors and pay some taxes. None of the Republican groups have said their applications were rejected.

Progress Texas, another of the organizations, faced the same lines of questioning as the Tea Party groups from the same IRS office that issued letters to the Republican-friendly applicants. A third group, Clean Elections Texas, which supports public funding of campaigns, also received IRS inquiries. [emphasis added]

All told, the IRS’s poking about seems to have been extensive and non-partisan.

…agency officials told lawmakers in a briefing yesterday that 471 groups received additional scrutiny, a total that indicates a crackdown on politically active nonprofit groups that extends beyond the Tea Party outfits.

A look at the questions presented to Progress Texas suggests that if the Tea Party was being “harassed,” so were they.

“Progress Texas and the Tea Party strongly disagree on the role of government,” the group’s executive director, Ed Espinoza, said in a statement. “Yet, when we applied for tax-exempt status, Progress Texas received the same type of additional scrutiny that Tea Party groups are complaining about. The similar treatment indicates the IRS was likely addressing a flood of 501c4 applications after Citizens United, and undermines the paranoid notion that Tea Party groups were singled out.”

The questions resembled the list of 35 questions (PDF) sent to the Liberty Township Tea Party, which has complained of IRS harassment.

The real culprit here is the infamous Citizens United decision.

The year 2010 began a busy period for the IRS office in Cincinnati, the home of the tax-exempt determinations unit. That January, the Supreme Court handed down its Citizens United decision, which loosened the rules governing contributions to political causes and candidates. Applications flooded in to the office from groups seeking tax-exempt status, many with a political agenda.

The IRS has admitted it flagged applications from groups with “Tea Party” or “Patriot” in their names. But applications from other groups were closely scrutinized as well.

An Austin, Texas-based progressive group, Progress Texas, was one of them. Its executive director, Ed Espinoza, says it took almost a year and a half for the IRS to review the application from his organization.

In 2010, some 1,700 applications for 501(c)(4) tax-exempt status came into the Cincinnati office. That number nearly doubled by 2012. Yet according to the IRS Inspector General’s Report, just one person was originally given the task of sifting through the applications deemed politically sensitive.

Another application that seemingly got caught up in the backlog came from a group of journalists in Chicago. The Chicago News Cooperative provided news for the Midwest edition of The New York Times. The co-op also sought tax-exempt status. Veteran journalist James O’Shea, a former managing editor of The Chicago Tribune, was in charge.

“There were political organizations trying to get these exemptions, and I think the IRS was concerned — and probably appropriately so — that some of these news organizations were really political organizations,” he says, “and so they were examining that, and we just got caught up in that.”

For more than two years, the Chicago News Cooperative waited for an IRS ruling. But without tax-exempt status, foundation support dried up, and the cooperative went out of business. [emphasis added]

The final score, then: Conservative groups “targeted” accounted for about a third of the total. None were denied nonprofit status. Meanwhile, at least one liberal group was turned down and at least one innocent bystander was forced out of business.

All thanks to a pro-corporate, pro-conservative Supreme Court ruling.

It’s probably not fair to assume that big money media organizations are always wrong, but you have to be positively daft to assume that you’re getting the truth, the whole truth and nothing but the truth from them.

Forewarned, forearmed.

9 replies »

  1. Actually, I had heard that reported on about Day Two of the whole debacle. Admittedly, no one has really picked it up and run with it, and to be fair, it’s only the conservative groups who are up in arms about it so they’re the ones making the noise. Still, any comprehensive (or at least not lazy) report would have mentioned what you mention here. I’d also heard that no conservative group was denied the classification (though the decision was delayed). Did I hear that one of the progressive groups actually _was_ denied? Don’t remember, at this point.

    Another aspect that hasn’t been picked up is that this questioning _is_ appropriate, and that the mandate from the original language of the statute makes it clear that ANY activity other than social welfare is grounds for disqualification. The law states that an organization must engage _exclusively_ in social welfare activities, but the IRS watered that down in their guidelines to “primarily.” So, ironically, the IRS in Cleveland was sailing closer to the law than anyone else, and they got trampled for it.

  2. Slightly confused – You say one third of the 471 groups that were scrutinised for what ever reason were along the conservative / tea party line and three democrat groups were looked at too.

    This raises a question: One third of the groups is about 156+/- tea parties versus three progressive revels. Does that sound fair? In my mind, only when there are 156 tea parties and three progressive revels.

    I can only find mention in one link where 33 reported tea party groups said they were not rejected tax exempt status not the fore mentioned 156+/-. Regarding the one group that was rejected – why was it rejected under section 527? Was that determination legitimate?

    There is no break down of the 471 groups and no link to where this number was reached. What were the other 312 groups? Were they all political groups? Bloomberg does not state or add references other than “Tax agency officials”

    There is no mention of a list created by the IRS that flagged progressive groups in the same manner that happened with tea party groups. If there is no flagging of any other agenda wouldn’t that still infer targeting contrary to your 156 vs 3 argument?

    • It’s not JUST three groups. These are the three they talk about. I haven’t seen a full list, but it’s the Bloomberg story (I think) that gives you the 1/3 number.

      The only group I see that was rejected was the liberal group, and my assumption is that they were denied because they were deemed to be doing partisan work.

    • Not even close. If the number of groups target were equal or even close to equal, you would be right. Clearly you are left, and with that label misinformed.

      I’m watching the hearings… they targeted specifically and overwhelmingly conservative groups during an election cycle. The 3 progressive groups that Congress just mentioned as well have nothing to do whatsoever with the targeting that has already been admitted to by the IRS. They admitted to specifically targeting these groups. The hearings are solely for who authorized it and why it happened. Fox News had, has and will always have the story right over the left wing media. Why else would Obama send his Justice Department after them… because they get it right and actually hold our Government accountable.

      • Thank you for making clear that you believe FOX to be a reputable news organization. That helps establish your credibility quickly and clearly.

        • I agree that I wouldn’t use FNC as a source, but even then sometimes they are right. In lieu of that, how about the daily mail in the UK, which has nothing to gain in the States? Everyone on the chair, including the Democrats, are slamming the IRS for targeting Conservative groups, not using the three mentioned democratic groups as an example of how there wasn’t targeting.

          Bottom line: If the IRS had used Progressive or Liberal in their search as well, this wouldn’t even be news, but they didn’t, sometimes democrats foul up too. To say the right wing nuts weren’t targeted because other groups were looked at too is specious, especially when it has been admitted by the IRS that they were and you don’t have clear references of the facts to back your claim up.

          I think it would have served you better to have owned the foul up and try to ensure your like minded readers don’t make that mistake themselves, rather than clutch at what is a rather weak looking straw. We’re human and we err as a matter of course.

          You can also do better than to completely reject a valid point just because Bman dropped an F(ox) bomb.

        • So, the IRS admits what it did re: those TP groups and sees its acting director step down; Obama apologizes; and the liberal (and nonpartisan) entities in the Bloomberg story tell us what happened to them. The TP groups admit that none of them had their requests denied, although one lib group did. And so on, and so on. And your theory is … what? That they’re all lying?

          I want to see the full list, too. Haven’t yet. But the larger narrative, which stems from the Citizens United decision and its logical impact, makes perfect sense. Can I imagine a rogue IRS employee targeting a TP group? Sure. I can imagine worse than that, too.

          But so far I have seen no meaningful indictment of the Bloomberg story, the stories of the liberal groups, the story of the news agency forced out of business, or the linked NPR article, which delves in a bit of detail not only into what happened, but how and why.

          Nobody is denying that the IRS did what it did. The problem is that this seems like part of the story, and the dynamic is a familiar one, with news agencies spending lots of time trying to look “fair and balanced” and very little time looking at the broader story context. I mention ACORN and Sherrod for a reason – this one smells a whole lot like those did.

          Finally, as for the Democrats slamming the IRS, of course they are. They voted to invade Iraq because SH had weapons of mass destruction, too. The Dems in DC are the most gutless pack of quislings in the country and they can usually be counted on to do whatever is expedient. Here was a narrative they could safely ride so that they could better appeal to the middle in the next election.

      • That would be the same Fox News that won a lawsuit in Florida that essentially gave it the right to “distort” the news however it sees fit (see the references section of this Wikipedia link for the details.

        So you’ll have to excuse me if I don’t take Fox News as the Truth(TM).