Fitton: Documents Confirm that Obama IRS Improperly Targeted Conservatives

We continue to undercover the details of the Obama IRS’s arbitrary and capricious behavior toward those presumed to be “enemies” of President Obama.

Last week we released 695 pages of new documents containing admissions by IRS officials that the agency used “inappropriate political labels” to screen the tax-exempt applications of conservative organizations. Other records reveal that the IRS was going to require 501(c)(4) nonprofit organizations to restrict their alleged political activities if they opted for “expedited consideration” of their tax-exempt applications.

The documents were produced after a revelation by the IRS that it had located “an additional 6,924 documents of potentially responsive records” relating to a 2015 Judicial Watch Freedom of Information Act (FOIA) lawsuit about the Obama IRS targeting scandal.  These new records are the first batch of nearly 7,000 documents that had been hidden from JW, Congress, and the American people. (Our FOIA lawsuit seeks records about the IRS’ selection of individuals and organizations for audits based upon applications requesting nonprofit tax status filed by Tea Party and other 501(c)(4) tax-exempt organizations (Judicial Watch v. Internal Revenue Service (No. 1:15-cv-00220)).

Of the 695 pages of documents released by the IRS, 422 (61 percent) were completely blacked out. Again, this new material was not in the “Congressional Database,” which the IRS created in 2013 to house records responsive to congressional inquiries into the IRS scandal.

Nevertheless, we extracted some key info – such as a June 20, 2013, memo from Karen Schiller, then-acting director, EO (Exempt Organizations) Rulings and Agreements, suspending use of the controversial Be on the Lookout (BOLO) and Touch and Go (TAG) lists:

EO Rulings and Agreements is undertaking a comprehensive review of screening and identification of critical issues. We intend to develop proper procedures and uses for these types of documents. Until a more formal process for identification, approval and distribution of this type of data is established, Rulings and Agreements will not use this technique to elevate issues.

In an August 9, 2013, memo, Schiller admitted the IRS used political labels in targeting the groups for special scrutiny and possible audit and that, going forward, the agency would screen organizations based only on their activities, “not words” or “labels of any kind:”

As Acting Commissioner Danny Werfel has said, the IRS has taken decisive action to eliminate the use of inappropriate political labels in the screening of 501(c)(4) applications. IRS policy is now clear that screening is based on activity, not words in a name. The new steps and current policies were outlined in the June 24 report, which noted: “In the absence of BOLO lists, the Determinations Unit will continue to screen for information affecting the determination of applications for tax exempt status, including activity tied to political campaign intervention, but it [will] be done without regard to specific labels of any kind.” The 30-day report also reflects the June 20, 2013 memorandum, which was issued to officially suspend the use of the BOLO list in the screening process.

The documents also include a “Dear [Applicant]” letter that offers an “expedited process” for 501(c)(4) groups in exchange for restriction on their activities:

This optional expedited process is currently available only to applicants for 501(c)(4) status with applications pending for more than 120 days as of May 28, 2013, that indicate the organization may be involved in political campaign intervention.

In this optional process, an organization will represent that it satisfies, and will continue to satisfy, set percentages with respect to the level of its social welfare activities and political campaign intervention activities (as defined in the specific instructions on pages 5-7). These percentage representations are not an interpretation of law but are a safe harbor for those organizations that choose to participate in the optional process.

In short, the Obama IRS, after lawlessly delaying the approval of Tea Party group applications, tried to extort restrictions – which had no basis in law – on these very same groups.

On September 30, 2013, Acting Director, Exempt Organizations, Kenneth C. Corbin, sent a memo to IRS staff providing detailed guidance on classifying applications when “‘merit approval’ is not an option,” emphasizing that the determination is to be based on “facts and circumstances,” not “words and labels:”

Classifier reviews the application and determines if it should be routed to a specialty group. This determination is based upon facts and circumstances of the stated activities within Part II of the application rather than names or labels. This is consistent with Karen Schiller’s August 9, 2013 memorandum …

The Schiller and Corbin memos came on the heels of the May 14, 2013, Inspector General report revealing that the IRS had singled out groups using conservative-sounding terms such as “patriot” and “Tea Party” when applying for tax-exempt status. The IG probe determined that “Early in Calendar Year 2010, the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status (e.g., lists of past and future donors)” and “delayed processing of targeted groups’ applications” in advance of the 2012 presidential election.

No wonder the Obama IRS hid these records. These new smoking-gun documents contain admissions by the Obama IRS that it inappropriately targeted conservative groups. But the records also show that the abuse continued – as the Obama IRS tried to force conservative applicants to give up their First Amendment rights in order to finally get their applications granted.


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