A report conducted by the Treasury Department’s Inspector General found that the Internal Revenue Service (IRS) improperly targeted conservative groups applying for 501(c)(4) status and IRS officials have publicly admitted to relying on inappropriate criteria to screen out the names of organizations that included “tea party” or “patriots” for additional scrutiny. But the New York Times reported on Sunday that some of the targeted groups may have used most of their resources to engage in political activity and backed Republican candidates for office, potentially violating the terms of the “social welfare” designation.
Under the law, 501(c)(4)s cannot be “primarily engaged” in electioneering activity. Though the guidelines for acceptable levels of political activity are unclear, organizations with such designations operate under the understanding that they are prohibited from spending more than 49 percent of their funds or time on political advocacy. Several Tea Party groups that reported unfair IRS scrutiny appear to have overstepped these bounds, the paper notes:
When CVFC, a conservative veterans’ group in California, applied for tax-exempt status with the Internal Revenue Service, its biggest expenditure that year was several thousand dollars in radio ads backing a Republican candidate for Congress.
The Wetumpka Tea Party, from Alabama, sponsored training for a get-out-the-vote initiative dedicated to the “defeat of President Barack Obama” while the I.R.S. was weighing its application.
And the head of the Ohio Liberty Coalition, whose application languished with the I.R.S. for more than two years, sent out e-mails to members about Mitt Romney campaign events and organized members to distribute Mr. Romney’s presidential campaign literature.
The IRS is separately reviewing “roughly 300 tax-exempt groups that may have engaged in improper campaign activity in past years, according to agency planning documents” and lawmakers are urging the agency to reconsider the applications of much larger groups like Karl Rove’s Crossroads GPS. The group told the IRS that any political ads run by the group would be “limited in amount” and “would not constitute the group’s primary purpose,” but it appears to be primarily focused on campaign activity.
As Sen. Dick Durbin (D-IL) explained on Fox News Sunday, while the IRS’ use of a partisan list to go after conservative groups is not justified, the law requires 501(c)(4)s to be “engaged in social welfare and not politics and campaigning.” “Crossroads was exhibit A. They were boasting about how much money they were going to raise and beat Democrats with,” Durbin said.