IRS “Lookout Lists” Also Included Liberal Groups. So, Was It Bipartisan “Targeting?”
A new round of documents from the IRS, that aren't really new, doesn't really change the basic narrative on the IRS "targeting" story.
Late yesterday, Acting IRS Commissioner Danny Werful released a report that seemed to indicate that the “Be On The Lookout” lists utilized by IRS employees in charge of examining 501(c)(4) applications included not only words that tended to ensnare conservative organizations, but also those that would likely ensnare liberal/”progressive” organizations:
WASHINGTON — The instructions that Internal Revenue Service officials used to look for applicants seeking tax-exempt status with “Tea Party” and “Patriots” in their titles also included groups whose names included the words “Progressive” and “Occupy,” according to I.R.S. documents released Monday.
The documents appeared to back up contentions by I.R.S. officials and some Democrats that the agency did not intend to single out conservative groups for special scrutiny. Instead, the documents say, officials were trying to use “key word” shortcuts to find overtly political organizations — both liberal and conservative — that were after tax favors by saying they were social welfare organizations.
But the practice appeared to go much farther than that. One such “be on the lookout” list included medical marijuana groups, organizations that were promoting President Obama’s health care law, and applications that dealt “with disputed territories in the Middle East.”
Taken together, the documents seem to change the terms of a scandal that exploded over accusations that the I.R.S. had tried to stifle a nascent conservative political movement. Instead, the dispute now revolves around questionable sorting tactics used by I.R.S. application screeners.
The acting I.R.S. commissioner, Daniel I. Werfel, formally ordered an end to all such “lookout” lists on Monday when he issued an assessment of the controversy that has led to harsh criticism of the nation’s tax collector.
Such lists were in use as recently as this month, when Mr. Werfel took over the agency, far longer than initially thought. I.R.S. officials said Monday that the more recent lists did not include the terms aimed at conservative groups.
Mr. Werfel on Monday also created an expedited process for groups to attain the tax-exempt status known as 501(c)(4). To qualify, groups must agree that no more than 40 percent of their expenditures and time can be spent on campaigns for candidates seeking public office. At least 60 percent of the groups’ time and expenses must be dedicated to social welfare activities.
The new I.R.S. documents raise questions about how the controversy has been portrayed. They confirm that the applications of “various local organizations in the Tea Party movement” were given special scrutiny. But so were “progressives.”
“Common thread is the word ‘progressive,’ ” a lookout list instructs. “Activities appear to lean toward a new political party. Activities are partisan and appear as anti-Republican.”
But groups with no political inclinations were also examined. “Open source software” organizations seeking nonprofit status “are usually for-profit business or for-profit support technicians of the software,” a lookout list warns. “If you see a case, elevate it to your manager.”
“Regional health information organizations” seeking nonprofit tax exemptions for their electronic health care data-collection efforts were sent to the same I.R.S. group sorting through the Tea Party applications.
Groups involved more generally in carrying out the Affordable Care Act were also sent to the I.R.S. for “secondary screening.”
And “occupied territory advocacy” seemed subject to the most scrutiny of all.
On it’s surface then, this would seem to blow a good part of the narrative about the IRS story that has gripped Washington and the political media for the better of the past two months completely out of the water. After all, the entire basis for that narrative was the idea that IRS employees were specially targeting groups with conservative sounding names for extra scrutiny in the 501(c)(4) application process, something that many on the right have latched onto as proof that there was some kind of organized effort to target the right. It’s worth noting, of course, that there still isn’t any definitive evidence that this “targeting” was directed from outside the IRS or that anyone associated with the Obama White House or the Obama campaign was involved, something that many on the right have at the very least hinted at many times during their discussions about this story. Now, though, we’ve got documents that seem to show that groups tied to the left, as well as other more general political causes, were also included in the list of organization names that should be scrutinized by those evaluating 501(c)(4) applications.
The Atlantic Wire’s Elizabeth Reeve argues that this completely debunks the version of the story we’ve been hearing from the beginning. Kevin Drum reaches the same conclusion. However, over at National Review Eliana Johnson argues that this new information doesn’t really change the basic narrative of the IRS story:
A November 2010 version of the list obtained by National Review Online, however, suggests that while the list did contain the word “progressive,” screeners were in fact instructed to treat “progressive” groups differently from “tea party” groups. Whereas screeners were merely alerted that a designation of 501(c)(3) status “may not be appropriate” for applications containing the word ”progressive” - 501(c)(3) organizations are prohibited from conducting any political activities - they were told to send those of tea-party groups off IRS higher-ups for further scrutiny.
That means the applications of progressive groups could be approved on the spot by line agents, while those of tea-party groups could not. Furthermore, the November 2010 list noted that tea-party cases were “currently being coordinated with EOT,” which stands for Exempt Organizations Technical, a group of tax lawyers in Washington, D.C. Those of progressive groups were not.
The AP reported earlier on Monday that “Terms including ‘Israel,’ ’Progressive’ and ‘Occupy’ were used by agency workers to help pick groups for closer examination.” That appears to be misleading, as there is no indication from the list examined by NRO that progressive groups were singled out for heightened scrutiny in a manner similar to tea-party groups. Cases involving healthcare legislation, however, were. “New applications are subject to secondary screening in Group 7821,” the list notes.
(…)
Based on the lookout list examined by NRO, however, it is inaccurate to say that progressive and liberal groups were subjected to the same or similar scrutiny as tea-party groups, or even that a surprisingly broad array of criteria was applied to screen applications for tax exemption.
It’s worth noting that much of the information that came out yesterday wasn’t exactly new. Much of it, including the information that Drum cites at his linked story, was included in the Inspector General’s report that got the ball rolling on this story back in late April. This is the same report that concluded that conservative aligned groups were treated differently from other groups, especially to the extent that their applications for 501(c)(4) status were delayed for, in many cases, what amounted extraordinary periods of time. The Inspector General has consistently stood by this conclusion each of the tie he has been before a Congressional Committee to testify about this matter. Nothing that Wurfel released today,or the either Drum or Reeve point to, suggests that this was not the case. Therefore, I’m not sure that this “new” information is the all that earth-shattering or that it really undercuts the central premise of the narrative that conservative groups were subjected to stricter scrutiny than other groups during their 501(c)(4) screening process.
What we don’t know, quite obviously, is what the reason for this extra scrutiny actually was. As I’ve noted, many on the right have asserted that it was part of an overall effor to harass Tea Party linked groups but there’s simply no objective evidence to support this. Matt Bernius has presented a perfectly plausible alternative theory for what happened in a serious of posts —- see here, here, and here — that places importance on the nature of bureaucracies that seems to me like it may end up being closer to the truth. However, that doesn’t undercut the seemingly undeniable fact that groups on the right were given greater scrutiny than other groups, and nothing that was released yesterday really changes that fact.
Update: Jonathan Adler at The Volokh Conspiracy sees the “new” revelations pretty much the same way I do and also points out an important distinction:
Some of these revelations are significant, but none of them contradict the account of the Inspector General’s report. Recently disclosed documents show that some BOLO (“Be on the Lookout”) documents called on IRS officials to flag groups based on the use of words like “progressive” or “Israel.” Yet these BOLO flags were largely limited“http://www.nationalreview.com/node/351718/print”>limited to groups seeking 501(c)(3) status (whereas the “Tea Party” flagging occurred with (c)(4) applications), and these BOLO documents don’t call for the same degree of scrutiny. The distinction matters because (c)(3) organizations are subject to more stringent limitations on political activity than (c)(4) groups. This would justify greater scrutiny of the former than the latter, and if the IRS was more even-handed with its review of (c)(3)s that would be a good thing. Why wasn’t this other information in the IG report? Perhaps because the IG was asked to look at the treatment of groups applying for (c)(4) status, and because the IG only conducted an audit, and not a full investigation. The scope of IG reports (like GAO reports) is often limited by the nature of the initial request.
This is worth keeping in mind.
I think it is still clear that the IRS is the last entity you want looking after your healthcare.
And if you need even more warm fuzzies, Mr. Deal, rest comfortably in the knowledge that Sarah Hall Ingram, who was the commissioner for tax-exempt groups, will be running the IRS division of about 16,000 officials who will be enforcing ObamaCare.
It’s time to put IRS! up on the shelf beside BENGHAZI! as another failed Republican attempt to create a scandal out of little or nothing.
Remember, the original Republican narrative was that ONLY conservative groups were targeted for extra scrutiny, and that this targeting was masterminded by Obama. Now, it’s down to “Well, lots of groups were targeted for scrutiny, but some conservative groups were targeted more, for some unknown reason, by an office headed by a conservative Republican”. The scandal narrative has now shrunk to almost nothing.
Anyone want to bet that this hearing never happens?
So when was Netroots Nation targeted?
Netroots Nation is a 501(c)4 corporation.
So can we get a list of the 75+ progressive 501(c)4s who had their applications delayed until after the elections?
@stonetools: So, unless the original claims were 100% accurate, we should drop everything? So it looks like that they were only 98% accurate, or 95% accurate. The weasels at the IRS still acted wrongly, but not quite as bad as first accused, so we’ll just drop the whole thing.
Funny how that attitude doesn’t carry over in cases like, say the Trayvon Martin case. The initial accusations against Zimmerman were way overblown, but that didn’t lead to folks like you calling for the dismissal of all charges against him.
The NRO article shows, with pretty flow charts and everything, just how the IRS singled out Tea Party groups for extra attention, harassment, and delays. Even you, stoney, should be able to follow it.
Right. Everyone knows he did not arm himself, follow a kid who was going about his lawful business, and eventually shoot him dead.
Absolutely! And rightfully so !!!
If an overtly political group decides to pretend that it is a non-profit, then damned right we should investigate AND PENALIZE them !!!
If the IRS gets a drumming for doing it’s job, well… that’s a damn shame, but I hope they find a way to keep doing this and ensure that a not-for-profit tax exempt group actually does what the law intended.
Being a shill for gathering cash for political donations… likely not the intent.
Next up: Bogus religious groups.
(I am looking at YOU, evangelicals !)
@Jenos Idanian:
Were conservative groups targeted more? Yep.
Were they only groups targeted? Nope.
Were they targeted more for some nefarious purpose? Nope-at least none that Republicans have been able to articulate.
Was the Obama Administration involved in targeting ? Nope.
Was the Cincinnati office who did the targeting led by a liberal hell bent on nailing those Tea Party groups? Nope-the contrary.
What’s left? Certainly not the major scandal the Republicans were trying to make of it. All the NRO graphs in the world won’t make it more than the nothingburger it is.
Once again, it’s important to remember that for all of these groups the IRS was not auditing them. They did not stop them from accepting donations or having meetings. All they did was determine if the group should be tax exempt.
And if Tea Party groups or Progressive groups were engaging in overtly political activities, then they shouldn’t have received tax-exempt status.
They were doing keyword searches for common terms that might indicate political activity. I fail to see any kind of scandal.
Is that Darrell Issa I hear? Shouting his outrage that liberal groups were also targeted by the IRS? Of course not.No, it only matters that tea party groups were looked at. Hell, let the IRS look at all the liberal groups they want that is of no interest to me!!
@Caj: Daily Kos noted that after this news broke, IRS disappeared from Issa’s twitter feed. It’s been replaced by 15 #Benghazi posts.
The principle is that no groups or individuals should be targeted. And all of this is more than enough cause for the IRS to be closed down. Start a new agency with a flat tax for individuals or a nationwide sales tax (food and medicine exempt). And no targeting or auditing (abusive).
@Jenos Idanian:
Heck, who doesn’t see the connection between Zimmerman’s shooting of Trayvon Martin and the IRS’s look-out lists of organizations claiming 501(c)(4) tax-exempt status? Whenever I see a packet of skittles the two things I think of are: (1) IRS audits of 501(c)(4) organizations and (2) justifiable homicide.
@Doug Deal:
I agree. In Canada its done by Health Canada rather than Revenue Canada, and they do a pretty good job on most things (having lived in both the US and Canada, I prefer the Canadian system for serious illnesses and accidents (and I’ve had both in Canada with excellent results at no cost, including a major automobile accident which, if you listened to American reports on Canadian health care, should have killed me, because Canadians apparently wait months to get a hospital bed when their car is hit by a semi), the US for optional surgeries and the like).
I suspect Revenue Canada, like the IRS, would do a horrible job of providing health care. Luckily I don’t know of many people who suggest that either provide it.
@george:
I’m sure that Doug Deal is also in favor of Canada’s single payer universal health insurance system, too.
/snark.
A deliberately overworked and underfunded agency (in this condition due to a cynical and thinly veiled Republican attempt to kill health care reform and otherwise appeal to the base) tries to find some reasonable shortcuts to the plethora of illegitimate applications for tax-exempt status.
I’d frankly be upset if they failed to even try to cope with their backlog in new and creative ways. Wait, how is this a scandal again?
So now that the IRS “scandal” has turned out to be a tempest in a teabag, the usual suspects are outraged about IRS/Obamacre problems that exist entirely in their own minds. What level of “I have no life” do you need to be at to have constant rage to get through the day?
I think they’re calling that one wrong. Red Hat is a commercial enterprise, but it supports the Linux Foundation, which is “a tax-exempt organization under the Internal Revenue Code of 1986, as amended.”
I disapprove of 501(c)(4) in general, but if the Foundation can be fully tax-exempt, why woudlnt’ someone else be 501(c)(4)?
Someone at the IRS has a bad idea of Open Source (or is in the bag for Microsoft or whatever).
@Jenos Idanian:
No. What´s missing here is that there are more Conservative groups and more money running on these groups. There is no Liberal equivalent to Crossroads GPS or Tea Party Express, and with the exception of that Primary Challenge to Blanche Lincoln in 2010 there is no record of Liberal Groups funneling large amounts of money to local primaries. Jane Hamsher and Glenn Greenwald talked about challenging Blue Dogs in Primaries around 2009, and that´s basically ended there. And many Liberal groups had names that sounded Conservative, as pointed out by a Frontline documentary.
So, it´s obvious that there are going to be more scrutiny with these groups.
I think Matt Bernius has been on the right track from the beginning: the problem here, to the extent there’s a problem, is the inherent fuzziness of the standard for a 501(c)(4) organization.
If you look at the org names the IRS was looking at, they certainly sound obviously political. 501(c)(4)s are supposed to be “social welfare” organizations, right? But then what is and isn’t “social welfare.” You essentially get into a lawyer’s game (sorry Doug!).
@al-Ameda: You forgot the reverse vampires.
@Andre Kenji:
I’m totally stealing this….
How many of the commenters here can honestly say that they have read the Form 1024 application?
How many can say that they have read the 1024 for Crossroads GPS, particularily their answers to measure the degree of political intervention?
Liberal Groups were put on list to be allowed through and were not asked outrageous questions while conservative groups were put on list to be sent to Washington for extra scrutiny, application held up for years, outrageous questions while greatly increasing their cost. Yep same thing (sarcasm off).
The people who claim nothing wrong happened because they were not literally decline are asinine. That would be like saying there is nothing wrong with holding up issuing a driving license to a person because they were black. They are not declining to give him one after all. They just take three or more years to give it to him. Great liberal logic.
@Jack:
Just about everything your wrote in the first paragraph is demonstratively false. And it can be demonstrated as false.
Again, for all those who are throwing around a lot of claims about “proof” let me again restate the facts (with links to back them up):
1. We *know* that liberal and neutral groups were still getting passed into specialist review during this period. At least 1/3rd of the groups that were flagged for specialist review and eventually passed were *not* conservative. See:
https://www.outsidethebeltway.com/13-of-flagged-501c34-applications-were-from-non-conservative-groups/
2. We do not know the make up of groups who have yet to receive their approval or rejections because that is not a matter of public record. So outside of the IRS and Congressional Committees, no one has that information. Given that Issa and company do have access to that info, again I ask, why would they be holding it back if it made their case?
3. We know that once groups were flagged for specialist review, they were treated in more or less the same fashion — including the extensive questioning and extended delays in approval. See the TIGTA report for more of that.
4. As others have noted, 501(c)(4)’s in particular could continue to operate as 501(c)(4)’s while awaiting approval. So the drivers license analogy doesn’t work — you cannot drive while you are waiting for your license. 501(c)(4) could and did continue to operate as normal while waiting for their licenses. See the TIGTA report for more on that.
5. We know that liberal groups were asked similar prying question to conservative groups.
See: http://www.npr.org/2013/06/19/193383914/liberal-groups-say-they-received-irs-scrutiny-too and http://www.bloomberg.com/news/2013-05-15/irs-sent-same-letter-to-democrats-that-fed-tea-party-row.html
6. In terms of supposed “unfair” flagging, the TIGTA audit establishes that 81% of the Tea Party and other BOLO terms applications were CORRECTLY flagged for specialist review. That was actually a higher success rate than when you looked at the standard primary review as a whole (which had a 69% success rate). Not, btw, this doesn’t mean that lots of liberal groups were being ignored. The fact is that the TIGTA audit found that the IRS’s failure rate for missing potential political activity was 14%.
see: https://www.outsidethebeltway.com/the-bolo-list-and-the-question-of-optics-vs-effectiveness/
@Paul L.:
Netroots nation is only applicable if they filed for status after January of 2010. Because that was when this debacle began. Considering that netroots nation has been active (as a conference) since 2006, it’s likely that they filed well before this controversy ever took place.
Which means that you are talking about apples and oranges.
@ Matt,
I agree with most of your post. What I think would do well to demonstrate would be if Jack and others would read the 1024 applications filed by these organizations.
If they would take time to read, for example, the Crossroads GPS application they would discover that the applicant gave a non responsive answer on the applications about their actual and planned political intervention.
If I were an IRS examiner, I would have bounced this application back to the applicant. My point is that the applicant created the delay by not being forthcoming about their actual and planned political intervention plans. The IRS didn’t cause the delay, the applcant did!
The questions that are being complained about, like newsletters, media publications, website content are all questions on the application itself! The same application the EVERYONE (liberals, conservatives, socialists, etc) is required to complete!
By the way, these blank applications are public documents, available on the IRS website.
The completed applications, for specific organizations, are also public documents available for the asking, once they have been approved for tax exempt status.
@Bob @ Youngstown:
Correct — which is why ProPublica should not have been able to get Crossroads application (as it wasn’t yet approved… and hasn’t been approved last time I checked).
IRS auditor reaffirms that conservatives, not liberals, were targeted
http://www.washingtontimes.com/news/2013/jun/27/irs-auditor-reaffirms-conservatives-not-liberals-w/
Treasury: IRS targeted 292 Tea Party groups, just 6 progressive groups
http://washingtonexaminer.com/treasury-irs-targeted-292-tea-party-groups-just-6-progressive-groups/article/2532456
I agree that Propublica should not have received the Crossroads GPS application, I would expect that is another issue that the IG should be investigating.
But that begs the question if anyone here has read the either the blank application or (for example) the application from Crossroads GPS, or the application from the West Virginia Conservation Foundation.
On question 15 Crossroads GPS provided a non answer, West Virginia responded that they would not be engaged in any political intervention. However they reported to the FEC that they spent way more that half of their revenue on electioneering.
My point is that the IRS is being asked to determine the degree of political involvement an organization engages in before the fact.
Personally, I think that “social welfare” organizations should not be permitted to engage in political advertising, electioneering and the like.
If an organization wants to have the capability to do that they should organize as a 527.
@Jack:
Please point out were either of those stories contradict any of the points I raised in response to your post.
THIS! Again, the issue here has less to do with one party or the other and more to do with how screwed up the 501(c)(4) form is to begin with.
@Matt
You said my statement that conservative groups were target and liberal groups for most part were not was demonstratively false. That is simply not true. Saying that because both groups were require to submit “some” of the same forms, receive “some” of the same letters or both were on a “list”, does not prove that one group wasn’t targeted. It is also a lame argument to say that a group wasn’t technically decline. Not approving a request in a reasonable time is still “denying” that group due process.
@Jack:
Again, your reading skills need work.
All the most recent letter from the IG states is that 30% of groups with “progressive” in the name were flagged for secondary review. It still does not provide a total breakdown of all the groups flagged for secondary review.
We still cannot state that liberal groups were not targeted “for the most part.” That may end up being the case, but if you are honest, the facts are not yet there.
Further, the fact that “Progressive” has existed on a previous version of the BOLO list suggests that at an earlier point (possibly during a heavy influx of progressive applications) a similar strategy had been used to target those applications for secondary review.
I also never stated that the BOLO list was inappropriate.
Further, you can’t seem to wrap your head around the fact (as stated by the Inspector General) that all groups flagged for secondary review were treated in largely the same fashion.
The bias — such that there was — was in the flagging. And further, it appears that any bias was the result of bureaucratic screw ups versus some White House arranged conspiracy.
@Jack:
Given how long it takes the government to respond to most requests (see VA responses and Haebus Reviews), there is no particular standard for what constitutes a reasonable time.
Personally, I think that the time frame was unreasonable, but I think having to wait years for your VA benefits or to have your Haebus Corpus appeal is unreasonable too. I wish folks would be equally up in arms about those things as well.
But was the waiting in itself discriminatory? Meaning, did only Conservative groups have to wait? The answer is clearly “no.”
And again, if you read the TIGTA report, it turns out that the Government failed to respond in a “reasonable time” to any of the groups flagged for potential political activity — which again included progressive/liberal groups. The TIGTA Inspector General found no evidence that, once conservative groups were flagged, they were treated any differently than any other group flagged. (Again see Sections II and III of the TIGTA Audit).
If you have evidence to the contrary, please present it.
The issue of timeliness is an equally slippery one.
I think one of the organizations complained that they were asked (presumably by letter from the IRS) to provide pamphlets, brochures, newsletters, journals, or similar printed material.
The organization’s complaint was to the effect that it would take considerable time and effort to provide those. They also complained that the IRS wanted hardcopy or screen prints of webpages.
Obviously, it will take some time and effort to provide those documents to the IRS. How quickly the organization can collect and send them will contribute to the total time it takes for the approval process. If the organiozation takes months to cooperate with the request, that is not the IRS’s problem.
BUT what these complaining organizations either don’t realize or choose to ignore was that EVERY applicant was asked to provide the same materials with their application!
Part II, line item #16 of the application for 501c4 states;” Does the organization publish pamphlets, brochures, newsletters, journals,or similar printed material? (Yes or No).
If “yes”, attach a recent copy of each.
You can argue that webpage screen prints are not specifically requested in the application, however it would be difficult to try to suggest that web publishing is not functionaly equal to print publishing.
So there are two point here,
1) Compaining organizations can’t take the position that they were inappropriately targeted and asked to provide non-required documentation, because the demand is made of all applicants.
2) The time the IRS is taking to process applications (application date to approval or denial date) should be reduced by the length of time the organization held up the process by not complying with the requirements of the original application.
Actually, to my way of thinking, the IRS would be justified in rejecting any application that does not have complete documentation at the outset. The notion that the IRS took the time to request the organization to provide the required documentation is to the credit of the IRS employees.
@Bob @ Youngstown:
The issue here is that Part I of the TIGTA audit makes it very clear that specialists in Cincinnati simply threw up their hands and stopped reviewing any potential political cases for over a year while waiting for direction from the Technical department in Washington.
This btw, is why Lerner and a few other in mid management need to go — not because of political bias, but because of managerial incompetence (as they claim that none of them ever realized that people stopped processing these cases for over a year).
@Matt Bernius:
Generally I agree with that (about managerial incompetence).
What would be really help full is a timeline of how a few (say 5 ) new applications were handled.
Obviously the IG would begin with applications that were profiled as being “Potential Political Cases by Organization Name” that were recieved in May or April of 2010.
Beginning with their date of reciept, where did each go, when were they profiled as potential political and what was done with each one , when was it done and by whom.
I’m growing a bit more skeptical about some of the information in the IGs report, owing to the events of the past several days where (some contend) that the IG was directed by Issa to look at conservative groups exclusively. Then yesterdays response to Levin, that suggested that the word “progressive” was not on the BOLO (but fell short in stating that any “liberal” groups were in the class of 202 that he described as “other”).
@Doug Deal: Actually, I’d prefer the IRS to American health insurance companies. Those Teabanger Patriot groups were much less intersted in tax exemptions than they were in secrecy for donors. They claim to be grass roots, but they are all Astroturf, all the time.