New details emerge in tea party suit against IRS

The IRS used the political views of conservative "tea party" groups trying to get nonprofit status as a reason for extra scrutiny and continued delaying applications until 2013 – long after they said they'd stopped – new federal court filings allege.

The new accusations counter previous IRS claims that agents did not consider political beliefs when slowing down tax-exempt applications from right-leaning groups in the months leading up to the 2012 presidential election.

The IRS had instead argued that it was merely monitoring whether the groups were conducting more political activity than was allowed.

The filings by conservative groups suing the IRS also state the agency continued the practice after IRS officials said it had stopped in 2011.

That accused discrimination then continued as the IRS and Treasury Department conducted an internal investigation into the practice, the documents state.

No motive for the potential discrimination was mentioned in the filings. Lawyers representing the conservative groups said that they don’t have to prove why the activity took place. (Previous critics and even some in Congress have claimed IRS officials were trying to slow down conservative fundraising to help President Barack Obama win re-election.)

"By trying to make this about whether this was done to help Obama win is setting the goalpost artificially too high," Eddie Greim, a lawyer representing conservative groups in the class-action suit, said in an interview with The Enquirer. "All we have to prove is whether they had the intent and if they indeed treated a set of groups differently based on their ideology.

"And these documents show that the IRS actually used ideology ... which is wrong just on the face of it."

The filings were made earlier this month in U.S. District Court in Cincinnati, where about 16 tea party and so-called patriot groups filed a class-action lawsuit against the IRS stemming from the scandal that erupted more than four years ago.

That's when the agency admitted to holding back the nonprofit tax status applications of more than 400 political activist groups, the vast majority of which were affiliated with conservative causes.

The revelations led to the resignation of the IRS' top official at the time, as well as several officials tied to the scandal. Obama even addressed the issue in a nationally televised address, saying it was "outrageous" for the IRS to target groups based on political beliefs and that those involved should be "held fully accountable."

Officials with the Justice Department, which is representing the IRS in the lawsuit, declined comment.

U.S. Sen. Rob Portman, R-Terrrace Park, who was one of the first in Congress to publicly complain in 2012 about the IRS' possible discrimination against conservative nonprofit groups, said that the practice was "an appalling abuse of power" in a statement to The Enquirer.

“It’s clear that the Obama administration’s IRS illegally and intentionally targeted conservative groups for their ideological beliefs, and those responsible ... need to be held accountable," Portman said.

Two "tea party coordinators" appointed

After tea party and conservative groups emerged in 2009-10, the agency created a "tea party coordinator" in 2010 in the downtown Cincinnati office to review such applications, the filing states.

Tea party cases "were definitely treated differently than everything we were trained in," coordinator Elizabeth Hofacre testified in a deposition quoted in the filings.

She also instructed IRS agents not to send her cases involving progressive or liberal causes, according to an email included in the filing.

A second such coordinator position was added in Cincinnati as the number of groups being examined grew. Ronald Bell testified that he understood his role to be "focused only on conservative groups," and that he was ordered by management to not work on those cases and not process them.

He also stated that the cases were given special attention by officials in Washington, which was outside of what he considered to be normal procedure.

In a separate deposition, IRS officials acknowledged that the viewpoint of a particular group should have been "irrelevant" as to whether to grant tax-exempt status. Donations to such groups are not tax-deductible but those with such status do not have to pay taxes themselves.

Under IRS rules, such 501(c)4 groups are allowed to conduct some political activity, as long it is is not the majority of an organization's business. But IRS regulations clearly state that the actual viewpoints should not enter into such decisions.

Lawyers representing the groups submitted the new evidence in response to the IRS' request that U.S. District Court Judge Michael R. Barrett dismiss the case for lack of evidence.

The filing is based on dozens of depositions such as the one with Hofacre as well as emails and other documents. Those deposed included several of the top officials in Cincinnati's nonprofit division as well as several current and former Washington officials.

One such witness was Lois Lerner, the woman at the center of the controversy who has since left the IRS. She escaped criminal prosecution earlier this month when the Justice Department declined to pursue charges.  

But Barrett sealed her testimony this summer after her lawyers argued any disclosures could lead to further harassment or possible threats against Lerner. 

Officials with the Justice Department, which is representing the IRS in the suit, declined comment on the latest filing.

Greim said that he has been in routine contact with government lawyers to discuss possible settlements, but no meetings have occurred since he filed the most recent response.

What happened after July 2011 meeting?

Those documents also highlight the outcome of a previously reported meeting between IRS staff members and senior officials including Lerner in July 2011. That's when Lerner reportedly learned of the segregation of such cases involving conservative groups.

The IRS previously reported that Lerner ordered the practice be discontinued at that meeting, findings backed up by investigations by not only the Treasury Department's own inspector general but by Congressional investigators.

But the filings state that instead of stopping the practice, Lerner instructed staff that they were to continue the practice and provide even more scrutiny. That's while she ordered the names of the "Tea Party Cases" be changed to "advocacy cases."

Lerner's testimony was redacted from the filings as it is under seal.

But others testified in depositions that Lerner ordered IRS agents to send requests for additional information from the affected groups following that 2011 meeting. That included requests for donor information, normally considered off-limits.

Lerner "wanted everyone to know that we are handling the cases as we should," testified Cindy Thomas, the top nonprofit official in Cincinnati at the time.  

"So after they were told that this was possibly improper, they doubled down and kept going," Greim said. "This goes well beyond the narrative of what's been reported before."

Greim also said that the IRS removed two Washington agents who had raised questions about the extra scrutiny on the tea party cases.

"These two found that ideology was indeed being used, raised questions about it and told their superiors about it and that it was going to cause delay," Greim said. "And wouldn't you know it, they were moved off the matter soon thereafter."