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Did IRS Targeting Harm Tea Party Groups?

Jun 22, 2013

Transcript

SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News, I'm Scott Simon. The U.S. Congress continues its hearings into the IRS flagging of Tea Party groups that apply for tax-exempt status. What may have been overlooked is the fact that this status would have offered little practical benefit to most of the groups that were targeted.

Joining us now to help explain all this is NPR's S.V. Date who coordinates campaign finance coverage for NPR. Shirish, thanks very much for being with us.

SHIRISH DATE, BYLINE: You're quite welcome, Scott.

SIMON: Remind us why these groups were seeking tax-exempt status in the first place.

DATE: Well, that's a little bit of a mystery. Now, most of us, when we think about tax-exempt status, we think of the Red Cross or a church or Goodwill. And those groups, when you donate to them, that donation gives you a tax deduction on your own taxes. Now, when you donate to one of these groups, these Tea Party groups, these 501(c)4s, you don't get a tax deduction and the main benefit they get, since they can't offer a tax deduction, is keeping their donors secret.

SIMON: When the IRS vets an application, what are they supposed to look for?

DATE: There are a couple of different forms of tax-exempt status. The first one, of course, is the 501(c)3 charity and those, there's a pretty broad line. No politics. They're supposed to look for what sort of charitable purpose they're serving or are they helping, or are they providing an education. With these other groups it's a little less clear and the line is a little more fuzzy.

You can have some politics, but that can't be your primary mission.

SIMON: Yeah. Surely any group involved in that kind of appeal would argue that everything they're about is improving education and the general quality of American life, do you think?

DATE: They may do that. Interestingly, the original law regarding these 501(c)4s was you're not supposed to do any politics, and then in the 1980s the IRS started interpreting that as, well, you can do some but it can't be primarily your mission. So now the question is, how much is primarily? What does that mean? If you're holding a rally, is that politics or is that specifically if you endorse a candidate?

SIMON: Yeah. Well, and also of course if you view politics as a way of accomplishing what your goals are, then the lines become particularly amorphous.

DATE: That is a problem the IRS is having here, that there were no real clear rules and no clear standards and there have been some in Congress who want to pass exactly those rules to prevent this sort of issue from arising in the future.

SIMON: Most of the attention obviously had been focused on these groups who were seeking tax-exempt status, but I understand that a lot of groups have applied for this status who had nothing to do with the Tea Party.

DATE: That's right. In fact, from that sample that was looked at by the Treasury Department audit, there were far more non-Tea Party groups that were set aside for extra scrutiny than Tea Party groups. And if you look as a percentage, you're twice as likely to be set aside for extra scrutiny if you are a non-Tea Party group than you are a Tea Party group.

So it doesn't appear that if they were intending to target Tea Party they weren't doing a very efficient job at it.

SIMON: It does not escape me, while sitting here talking about it, I haven't heard of liberal groups complaining that they were subjected to what they would consider to be unauthorized scrutiny. Now does that necessarily suggest that they sailed through?

DATE: Actually, we found a number of progressive liberal groups that say they were also set aside for additional scrutiny. They had to answer multiple questionnaires and give detailed information of their donors. There doesn't seem to have been the outrage from them as we've seem from some conservative groups over similar questions.

SIMON: How do you explain what was going on? Can you get a handle that yet?

DATE: There's some debate on that question. A lot of Republicans want to see a pattern of targeting conservative groups, Tea Party groups, because of their criticism of the Obama administration, because of their political leanings and that's what a lot of these congressional hearings have been about so far. But as we delve deeper into this, it seems just as likely, maybe even more likely, that it was a matter of bureaucrats trying to figure out how to deal with these hundreds, thousands of applications that have been coming in since court rulings made this form of group more advantageous for use in politics. And shortcuts were taken and what we're seeing here is perhaps more inartful(ph) use of their procedures than any type of political malice.

SIMON: Shirish Date, coordinates NPR's campaign finance coverage. Thanks very much for being with us, Shirish.

DATE: You're very welcome. Transcript provided by NPR, Copyright NPR.