Screen Shot 2013-06-05 at 12.29.43 AM.png

The Treasury report on tax exempt groups showed that only a third of targeted groups were Tea Party-class groups, but no explanation was given for the identity of the majority marked "other." (TIGTA)

Close to a third of the advocacy groups named by the Internal Revenue Service as recipients of special scrutiny during tax-exempt application reviews were liberal or neutral in political outlook, a leading nonpartisan tax newsletter reported after conducting an independent analysis of data released by the agency.

All told, around 470 groups were flagged as "potential political cases" between 2010 and 2012, including 298 whose experiences were analyzed in a Treasury Department inspector general's report. Because the IRS by law must not name groups that have not yet been approved or which were rejected, only a subset of their names was made public in May by the agency -- 176 cases.

Of these, "the majority of the groups selected for extra scrutiny probably matched the political criteria the IRS used and backed conservative causes, the Tea Party, or limited government generally," wrote Martin A. Sullivan in a June 3 piece in Tax Notes, a newsletter published by the Tax Analysts group. "But a substantial minority -- almost one third of the subset -- did not fit that description."

Non-conservative advocacy groups given special scrutiny by the IRS in or after 2010 included the Coffee Party USA, the alternative to the Tea Party movement that got a bunch of press in 2010, as well as such explicitly progressive groups as the Progressive Leadership Alliance of Nevada; Rebuild the Dream, founded by former Obama administration official Van Jones; and Progressives United Inc., which was founded by former Wisconsin senator Russ Feingold.

Also included in the special scrutiny were Progress Texas and Progress Missouri Inc.; Tie the Knot, which sells bow ties to raise money to promote same-sex marriage; and ProgressNow, which describes itself as "a year-round never-ending progressive campaign."

The targeting also rolled up centrist groups, such as the Across the Aisle Foundation -- the educational and cultural arm of No Labels, which worked to build momentum for an independent ticket for the presidency -- and politically neutral ones, such as The East Hampton Group for Good Government Inc., formed to encourage better leadership and management of the New York vacation town, and the League of Women Voters of Hawaii.

All of these groups were flagged by the IRS along with the Tea Party class of groups as "potential political cases" and were part of the 31 percent of groups given special scrutiny that were not clearly conservative.

Sullivan's Tax Notes piece lays out what we know about the cases that are public so far:


Because the IRS is prohibited by law from releasing information on applications either denied or not yet approved, we will probably never know the political persuasions of all 298 advocacy cases selected for extra scrutiny and of the additional 170 or so applications selected since then. We can, however, try to assess the political persuasion of the 176 approved organizations that the IRS identified on May 15....

As noted, 46 organizations on the May 15 IRS list had "Tea Party," "patriots," or "9/12" project in their name. Tax Analysts conducted Web searches of the other 130 organizations on the list to determine if the groups were conservative organizations. In 124 cases, we found what we believe is sufficient information to make a good faith determination whether a group was conservative....

[T]the results of the Tax Analysts review of these organizations are the following: 46 with "Tea Party," "patriots," or "9/12 project" in their name, 76 other conservative organizations, 48 nonconservative organizations, and six organizations about which we can make no determination....

Ultimately, to address the question whether the IRS's review of applicants for tax exempt status had a disparate impact on one side of the political spectrum or the other, we will need to know more about the overall pool of advocacy groups applying for tax exemption. For example, if there were a surge in the creation of potentially political conservative organizations in the last few years (that was disproportionate to the creation of nonconservative organizations), more conservative groups would be targeted than nonconservative groups even if there were no political bias among IRS officials. Looking at the makeup of exemption-approved groups tells us nothing about bias unless we know the makeup of the group from which they were selected.

A spokesman for the Treasury inspector general for tax administration (TIGTA), David Barnes, said he'd not heard anything about a list of progressive groups targeted by the IRS and referred me to page 8 of the inspector general's report for his office's understanding of the matter.

It stated: "approximately one-third of the applications identified for processing by the team of specialists included Tea Party, Patriots, or 9/12 in their names, while the remainder did not. According to the Director, Rulings and Agreements, the fact that the team of specialists worked applications that did not involve the Tea Party, Patriots, or 9/12 groups demonstrated that the IRS was not politically biased in its identification of applications for processing by the team of specialists."

The TIGTA decided that there was bias because "we determined during our reviews of statistical samples of I.R.C. § 501(c)(4) tax-exempt applications that all cases with Tea Party, Patriots, or 9/12 in their names were forwarded to the team of specialists" between May 2010 and May 2012 (emphasis added).

Though the Treasury inspectors found that one third of the groups given special scrutiny probably should not have been, they declined to say in their May report what the political leanings of theses improperly selected groups were: "We reviewed all 298 applications that had been identified as potential political cases as of May 31, 2012. In the majority of cases, we agreed that the applications submitted included indications of significant political campaign intervention. However, we did not identify any indications of significant political campaign intervention for 91 (31 percent) of the 296 applications that had complete documentation."

Most likely, these improperly selected cases were -- like the selected cases that the IRS has released data on so far -- a mixture of liberal, conservative, and neutral (civic pride, good government, etc.) in outlook.

More flawed than the selection process -- which flagged groups that should not have been given extra scrutiny as well many that appropriately received it but which were selected using improper criteria, according to the TIGTA report -- were the lengthy delays in processing applications and the excessive and intrusive questions asked of the selected groups. According to the report, 58 percent of inquiries asked of those groups were later deemed unnecessary.

***


Below, the list of 48 nonconservative groups identified by Tax Analysts in their inquiry.

Table 1. Nonconservative 'Centralized' Tax-Exempt Organizations

   Organization Name     Status              Mission or Description

   1. Across the         501(c)(3)           Educational arm of No


   Aisle Foundation                          Labels, a centrist


                                             policy advocacy group;


                                             encourages


                                             bipartisanship on


                                             Capitol Hill.

   2. ALICE (American    501(c)(3)           Provides a Web-based


   Legislative and                           public library of


   Issue Campaign                            progressive law on a


   Exchange)                                 wide range of issues in


                                             state and local policy


                                             ("a very partial


                                             antidote to ALEC


                                             [American Legislative


                                             Exchange Council], the


                                             corporate-backed


                                             group").

   3. Chattanooga        501(c)(3)           Helps individuals and


   Organized For                             organizations "to build


   Action                                    the power of everyday


                                             people from


                                             marginalized and


                                             oppressed communities


                                             to take control of the


                                             circumstances of their


                                             lives."

   4. Comeback           501(c)(3)           "[Promotes] fiscal


   America Initiative                        responsibility and


   Inc.                                      sustainability by


                                             engaging the public and


                                             assisting key


                                             policymakers on a


                                             nonpartisan basis in


                                             order to achieve


                                             solutions to U.S.


                                             fiscal imbalances."


                                             Former U.S. Comptroller


                                             General David Walker is


                                             founder.

   5. Corporate          501(c)(3)           A project of


   Accountability                            Philadelphia-based


   Project                                   ActionPA; "provides


                                             educational organizing


                                             resources for fighting


                                             corporate power."

   6. East Hampton       501(c)(3)           Promotes improved local


   Group for Good                            government in East


   Government Inc.                           Hampton, N.Y.

   7. Engage San         501(c)(3)           San Diego-based


   Diego                                     "regional network of


                                             organizations working


                                             in historically


                                             underrepresented and


                                             socially responsible


                                             communities."

   8. Intersections      501(c)(3)           A network of ministries


   Inc.                                      to empower young people


                                             in American Samoa


                                             "through programs that


                                             combine the arts and


                                             technology with the


                                             educational,


                                             vocational, and


                                             spiritual disciplines."

   9. Miami-Dade         501(c)(3)           "An independent,


   Taxpayers Alliance                        nonpartisan research


   Inc.                                      institute dedicated to


                                             better stewardship of


                                             Miami-Dade County's tax


                                             dollars."

   10. National Jobs     501(c)(3)           "Committed to building


   for All Coalition                         a new movement for full


                                             employment at livable


                                             wages." Affiliated with


                                             many liberal


                                             organizations.

   11. Northeast Ohio    501(c)(3)           "Enables and expands


   Voter Advocacy                            voter education and


   Inc.                                      registration in


                                             underrepresented areas


                                             of the City of


                                             Cleveland, Cuyahoga


                                             County, and other


                                             counties of northeast


                                             Ohio."

   12. Open Sky          501(c)(3)           Nebraska-based fiscal


   Policy Institute                          policy research group;


                                             generally opposes


                                             income tax cuts.

   13. Progress          501(c)(3)           "Multi-issue


   Missouri Education                        progressive advocacy


   Fund                                      organization" focused


                                             on state and local


                                             policy.

   14. Public Works:     501(c)(3)           Director previously


   The Center for the                        founded the Texas-based


   Public Sector                             Center for Public


                                             Policy Priorities, a


                                             nonprofit, nonpartisan


                                             organization committed


                                             to building the


                                             economic and social


                                             well-being of


                                             low-income Texans.

   15. Rebellious        501(c)(3)           Seeks to "unveil the


   Truths                                    curtain of dastardly


                                             deeds and the cobweb of


                                             lies entangling


                                             America."

   16. Restoration       501(c)(3)           Grass-roots


   Philadelphia Inc.                         organization made up of


                                             individuals, churches,


                                             and ministries


                                             committed to


                                             "mobilizing the Church


                                             of Philadelphia to


                                             fulfill its destiny and


                                             restoring the City of


                                             Brotherly Love, so that


                                             the vision of William


                                             Penn's Holy Experiment


                                             becomes a reality and


                                             the Glory of God is


                                             revealed all."

   17. Sarasota Tiger    501(c)(3)           Nonpartisan political


   Bay Club Inc.                             organization that hosts


                                             debates, forums, and


                                             speakers in central


                                             Florida.

   18. Center for        501(c)(3)           San Francisco-based


   Election Science                          group dedicated to


                                             "election-related


                                             scholarship."

   19. Center for        501(c)(3)           Conducts research and


   Health Care Policy                        analysis necessary for


                                             the creation of a


                                             single-payer healthcare


                                             system.

   20. Alliance for a    501(c)(4)           Multi-issue education


   Better Utah Inc.                          and advocacy


                                             organization promoting


                                             progressive ideas and


                                             causes.

   21. Campaign for      501(c)(4)           Advocates for greater


   Vermont Prosperity                        state government


   Inc.                                      transparency and


                                             accountability and a


                                             stronger economy with


                                             more and better-paying


                                             jobs while espousing a


                                             commitment to social


                                             responsibility and


                                             environmental


                                             stewardship.

   22. Coffee Party      501(c)(4)           Founded on the


   USA                                       underlying principle


                                             that the government "is


                                             not the enemy of the


                                             people." Seeks to


                                             remove corporate


                                             influence from


                                             politics.

   23. Committee for     501(c)(4)           Focuses on the roles


   a Fair Judiciary                          and responsibilities of


                                             senators in the


                                             judicial selection


                                             process and seeks to


                                             educate the public


                                             about how the process


                                             works and how it could


                                             work better.

   24. Freedom Club      501(c)(4)           Aims to guide members


                                             to financial, health,


                                             emotional, and


                                             spiritual freedoms ("to


                                             raise the life energy


                                             of Mother Earth and


                                             Mankind to new heights


                                             and welcome in the new


                                             era of Love, Prosperity


                                             and Cooperation").

   25. Delawareans       501(c)(4)           National coalition of


   for Social and                            community-based


   Economic Justice                          organizations composed


                                             of parents and students


                                             in low-income


                                             communities focused on


                                             unveiling a report on


                                             schools that are


                                             eligible for federal


                                             turnaround


                                             intervention.

   26. Grantville        501(c)(4)           Local government group


   Action Group                              in San Diego that


                                             opposes development.

   27. Homeless but      501(c)(4)           Registers voters at


   Not Powerless                             shelters, soup


                                             kitchens, parks, and


                                             jails.

   28. League of         501(c)(4)           State chapter of


   Women Voters of                           national organization


   Hawaii                                    to educate policymakers


                                             and the public on


                                             issues.

   29. Louisiana         501(c)(4)           Advances progressive


   Progress Action                           state policy solutions.


   Fund Inc.

   30. Middle Class      501(c)(4)           San Diego-based


   Taxpayers                                 organization that


   Association                               serves as a voice for


                                             those "not served by


                                             big business-funded


                                             taxpayer groups."

   31. Missourians       501(c)(4)           Group opposing


   for Fair Taxation                         reductions in income


                                             tax that are paid for


                                             through sales tax


                                             increases.

   32. New American      501(c)(4)           Coalition of CEOs,


   Economy Action                            start-up founders, and


   Fund                                      venture capitalists


                                             formed to press


                                             Congress to pass


                                             immigration reform that


                                             would encourage


                                             innovation and create


                                             jobs.

   33. New York Civic    501(c)(4)           Associated with


   Action Inc.                               left-leaning network


                                             action groups.

   34. Nicolas           501(c)(4)           Dedicated to the design


   Berggruen                                 and implementation of


   Institute                                 new ideas of good


                                             governance that can be


                                             brought to bear on the


                                             common challenges of


                                             globalization in the


                                             21st century.

   35. No on 22 --       501(c)(4)           Opposes California


   Citizens Against                          Proposition 22, which


   Taxpayer Giveaways                        would give money to


                                             redevelopment agencies


                                             at the expense of state


                                             core services such as


                                             public education.


                                             Sponsored by


                                             firefighters.

   36. Progressive       501(c)(4)           Brings diverse and


   Leadership                                potentially competing


   Alliance of Nevada                        organizations together


                                             into one cohesive force


                                             for social and


                                             environmental justice


                                             in Nevada.

   37. Progress          501(c)(4)           Promotes a stronger


   Missouri Inc.                             progressive movement in


                                             Missouri and advances


                                             in progressive public


                                             policy.

   38. Progress Texas    501(c)(4)           Organizes rapid


                                             response communications


                                             in opposition to


                                             conservative groups.

   39. Progressive       501(c)(4)           "We advocate for


   USA Inc.                                  sensible policy


                                             solutions, hold our


                                             nation's elected


                                             officials accountable


                                             for their actions and


                                             take head-on the flawed


                                             policies and hypocrisy


                                             of the radical right."

   40. Progressives      501(c)(4)           Opposes corporate


   United Inc.                               influence in the


                                             political system.

   41. Progress Now      501(c)(4)           Progressive campaign.

   42. Rebuild the       501(c)(4)           Supports pro-union


   Dream                                     demonstrations in


                                             Wisconsin.

   43. RVA Alliance      501(c)(4)           Affiliated with the


   Inc.                                      Alliance for


                                             Progressive Values.

   44. Texas Business    501(c)(4)           Promotes education with


   for Higher                                no apparent political


   Education                                 agenda.

   45. Tie the Knot      501(c)(4)           Sells bow ties to raise


                                             money to promote


                                             legalizing same-sex


                                             marriage.

   46. TN Fair Tax       501(c)(4)           Promotes the creation


                                             of a progressive


                                             Tennessee state tax


                                             structure that ensures


                                             adequate revenues.

   47. U.S. Common       501(c)(4)           Group's president is


   Action                                    affiliated with


                                             California Common


                                             Sense, a group


                                             dedicated to open


                                             government.

   48. U.S. Health       501(c)(4)           Promotes the right to


   Freedom Coalition                         access alternative


   Inc.                                      medical treatments such


                                             as naturopathy.