Conservative Group Wins Big Against IRS

True the Vote (TTV), a voters’ rights organization, and other conservative, nonprofit organizations found it nearly impossible to obtain 501(c)(3) or (c)(4) tax-exempt designations back in the years 2010 through 2013 as the IRS threw obstacle after obstacle in their paths.  In some cases, applicants simply gave up. In other cases, organizations sued.

As the scandal broke, we learned that the IRS was targeting applications from any Tea Party-sounding organization for extra scrutiny. For most of those organizations that meant delays, extra questions, and requests for information the IRS had no business asking for. But for some, like TTV, the IRS engaged in flat-out intimidation tactics.

Catherine Engelbrecht, the founder of TTV, described those intimidation tactics in an interview with Breitbart.com as a “barrage of attacks.” Throughout her organization’s long ordeal, they were forced to contend with, in addition to the IRS, questions and investigations from the U.S. Department of Justice, the FBI, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Occupational Safety and Health Administration. All that for an organization that wanted to monitor the integrity of elections.

In 2013, the IRS scheme began to unravel, as a Congressional committee started investigating, along with the Department of Justice (DOJ). The Republican-dominated House Oversight Committee issued a report noting that the overwhelming majority of organizations targeted were conservative and that the IRS had used “inappropriate criteria” in determining tax-exempt status. Lois Lerner, the central IRS figure in the scandal, asserted her Fifth Amendment rights in refusing to testify before Congress, and was eventually allowed to retire with her full pension.

With the new Administration beginning in 2017, and Republican majorities in the House of Representatives and Senate, things began to look up for the nonprofit organizations who suffered at the hands of the IRS. A class-action suit against the federal government resulted in settlements and payouts totaling $3.5 million.

In 2018, the IRS and TTV agreed to a “Consent Order” to end TTV’s lawsuit, whereby the IRS admitted fault in the way it handled the voter organization’s application. And this week, a federal judge issued a related ruling in the same case awarding TTV the maximum amount of attorney’s fees allowable, citing the IRS’s “bad faith” in the way it conducted itself. The final tally could exceed $1.9 million.

But there’s more to this strange story. For example, why did this happen in the first place? Was this all an innocent mistake? After all, nobody was prosecuted.

Politics, it seems, provides the best answer. Many of those conservative nonprofits victimized in this scandal geared themselves toward increasing conservative voter turnout. According to a 2018 op-ed from Bradley A. Smith (former Chairman of the Federal Elections Commission) in the Wall Street Journal, a 2012 American Enterprise Institute study found that tea-party organizations substantially increased conservative turnout in the 2010 midterms. Subsequently, the harassment from the IRS beginning at about that same time “blunted the Tea Party ground game” for the 2012 elections.

Other targets of IRS scrutiny during this time included pro-life organizations applying for tax-exempt status. The Coalition for Life of Iowa was asked, for example, to detail the content of its members’ prayers, and at one point was required to furnish sworn statements from all of its board members promising not to picket or protest Planned Parenthood.

The IRS is not independent of politics. It operates under, and reports to, the Department of the Treasury and the Secretary of the Treasury, a Presidential appointee. The IRS itself has two political appointees. One of them, Commissioner Steve Miller, was asked to resign by President Obama’s Treasury Secretary Jack Lew over this scandal, and did so.

When bureaucrats wield the type of power that the IRS can exert, citizens must demand strict accountability. That was missing in this case at a time when it was most needed, and who knows whether and to what extent the 2012 election was impacted by the IRS actions?

This particular scandal should remind us always to be vigilant, and not stand idly by as unaccountable government agencies grow more powerful, more ideological, and more political. Such a toxic mix threatens our constitutional order.