Chilling Effect

Groups wary of talking about how they were targeted by IRS

Tea Party protest / AP
May 14, 2013

A long-awaited report by the Treasury Department inspector general confirmed Tuesday that Internal Revenue Service agents targeted Tea Party groups because of their political beliefs.

The report said ineffective management allowed IRS agents to single out Tea Party groups applying for tax-exempt status with inappropriate questions and requests.

While some conservative groups have come forward to corroborate stories of politically motivated targeting by the IRS, many are also keeping quiet for fear of further retaliation.

"Talk about a chilling effect on speech," said one person who requested anonymity. "I'm afraid to go on the record because of what the IRS might do to my group."

The source was a member of a conservative nonprofit that applied for tax-exempt status with the IRS. After waiting nearly a year without any response, the organization reapplied under an innocuous name.

The Cincinnati IRS office—the same at the heart of the current scandal—approved the application in three weeks.

"At that point, we had a history," the source said. "But as soon as we changed the name, it sailed through."

An IRS official admitted on Friday the agency targeted conservative groups. Those organizations were subjected to increased scrutiny and requests for reams of information, including donor lists.

The program originated at the IRS office in Cincinnati, according to reports.

The Cincinnati IRS office also leaked sensitive documents from conservative organizations to liberal media outlets.

Investigative news outlet ProPublica received applications from 31 nonprofits from the IRS in November 2012, including nine that had not yet been approved and thus were not supposed to be made public.

All of the confidential applications belonged to conservative groups. One application leaked by the IRS was that of Crossroads GPS, the biggest spender among 501(c)(4) groups in the 2012 election cycle.

ProPublica is itself a 501(c)(3) nonprofit organization, which means donations to it are tax deductible, unlike 501(c)(4) groups such as Crossroads.

ProPublica's supporters include heavyweight Obama donors, such as DreamWorks Animation CEO Jeffrey Katzenberg. Katzenberg was one of President Barack Obama's biggest donors and fundraisers. Katzenberg and his wife donated $25,000 to ProPublica in 2011.

The Sandler Foundation is ProPublica’s largest donor, giving five grants worth almost $25 million to the news outlet. Herb Sandler, also a member of the shadowy Democracy Alliance, cofounded the Sandler Foundation to "strengthen the progressive infrastructure."

As reported by the Washington Free Beacon, ProPublica extensively covered so-called "dark money" conservative groups and donors during the 2012 election cycle, such as casino mogul Sheldon Adelson, while largely ignoring similar spending on the left.

Although the Cincinnati IRS office leaked the applications to ProPublica, an official IRS spokeswoman told the news outlet it would be a felony to publish them.

ProPublica decided it had the First Amendment on its side and that the confidential applications were newsworthy.

"As far as we know, the Crossroads application is still pending, in which case it seems that either you obtained whatever document you have illegally, or that it has been approved," Jonathan Collegio, the group’s spokesman, wrote to ProPublica in December.

Crossroads declined to comment for this article, as well as a Monday article by ProPublica detailing how it obtained the records from the IRS.

Other groups had documents leaked in the midst of a bitter election year as well.

The IRS "inadvertently" published the donor list of the Texas Public Policy Foundation (TPPF)—a conservative think tank—on GuideStar in 2012.

The list quickly became fodder for left-wing opponents of the think-tank.

TPPF also declined to comment for this article.

The Huffington Post and the Human Rights Campaign obtained the National Organization for Marriage’s (NOM) tax returns in 2012, which showed GOP presidential nominee Mitt Romney donated $10,000 to the organization in 2008.

"There is little question that one or more employees at the IRS stole our confidential tax return and leaked it to our political enemies, in violation of federal law," NOM’s president Brian Brown said in a statement following Friday’s report. "The only questions are who did it, and whether there was any knowledge or coordination between people in the White House, the Obama reelection campaign and the Human Rights Campaign. We and the American people deserve answers."

St. Louis reporter Larry Connors also said he was targeted by the IRS following a sit-down interview with Obama where Connors asked tough, probing questions of the commander in chief. The interview visibly angered Obama.

"Shortly after I did my April 2012 interview with President Obama, my wife, friends and some viewers suggested that I might need to watch out for the IRS. I don't accept 'conspiracy theories', but I do know that almost immediately after the interview, the IRS started hammering me," Connors wrote on his Facebook page on Monday.

Senior Obama administration official Austan Goolsbee singled out Koch Industries, run by libertarian philanthropists Charles and David Koch, during a 2012 press conference and said it paid no income taxes.

Such tax information is supposed to be private, leading to accusations from Republicans and Koch Industries that the Obama administration illicitly peeked at its tax filings.