IRS Targeting Scandal

Complete History on the IRS Targeting Scandal – What is it?

Complete History on the IRS Targeting Scandal – What is it?

In 2012 Congress first became aware that the IRS might be targeting conservative non-profit groups for intrusive and illegal investigations.  We now know this did happen and started as early as 2010.

First, what is this IRS Targeting Scandal?  You have likely heard or read about this in the news.  We will give you a brief run down.

“Targeting” activity by the IRS involved very detailed, intrusive, illegal, and drawn out investigations on individuals wanting to start a non-profit organization.   Keep in mind the “IRS Targeting” also included investigations of these individuals by the FBI, the ATF, OHSA, and other agencies.  A coordinate attack between Federal agencies.

These intrusive audits and investigations were an attempt to stop the non-profit groups from forming and also uncovering who their supporters are (which we’ll see later is illegal).  They were bullying the people: trying to scare them away from opening a non-profit.

A non-profit organization 501(c)(4):
The Internal Revenue Service is responsible for approving 501(c) non-profit organizations.  “501(c)” is the IRS tax code section that describes the rules and regulations for someone to own a non-profit organization such as the Red Cross, MADD (Mothers Against Drunk Driving), or the Tea Party.

IRS tax-exempt non-profitA person, you for example, completes the 501(c) application and sends it into the IRS for approval. Once they approve it, you can begin operating as a non-profit organization.

The 501(c)(4) non-profit is a subcategory, called a Social Welfare Organization, setup for groups like the Tea Party or even volunteer fire departments.  This application is what the IRS was specifically targeting  (more).

During the IRS’s approval process is where this Targeting Scandal begins.  IRS personnel screen the applications to ensure the organizer’s group meets the legal requirements.   The scandal is over the IRS doing special screenings, very lengthy screenings, on applications that appeared to be conservative (i.e any Tea Party groups).

See Colbert’s attorney define 501(c)(4):


IRS’s Targeting of Conservative groups:
Many Republicans/Conservative individuals have become disheartened over the direction America is headed economically, financially, and politically.  People who once never involved themselves with politics or our countries direction started getting involved.  Some started their own non-profit organization.

Catherine EngelbrechtOne such person, Catherine Engelbrecht, started  She sent in a 501(c)(4) form to the IRS.  Cathy was a “soccer mom” who was raising kids, had a small business, and dealing with life events like most of us do day-to-day.

Then all hell broke lose on her immediately after sending her 501(c)(4) form to the IRS.  The IRS audited many years of her personal and business tax returns and harassed her over her non-profit application. Then the FBI, OHSA, and several other Federal government agencies came knocking too. Harassing and intimidating her.

This harassment was intended to scare her.  But she dug in!  And now is fighting back.  Hear her story in her own words in front of a Congressional hearing:

She is not the only one.  Hundreds of people were harassed like this. Now Congress is investigating.  The FBI is also investigating.

Additional testimony videos:

Law on political targeting:
Political targeting is illegal.  The IRS sharing a person’s information with other Federal agency is also illegal.

The Internal Revenue Service rules also protect groups organized under Section 501(c)(4) as nonprofit organizations dedicated to social welfare from having to reveal the names of their donors or the amount of funds the individual donors have contributed. This protection dates back to the United States Supreme Court’s 1958 ruling in NAACP v. Alabama when the Court held that disclosure of names could render private donors vulnerable to retaliation.

This is VERY important:  The IRS required organizers to provide a list of their donors and the contributions that were being made.  From the above paragraph, this is ILLEGAL per the US Supreme Court!

List of questions the IRS asked organizers:
Only for conservative group applications the IRS asked many detailed and invasive (and illegal) questions such as:

“The names of the donors, contributors, and grantors . . . The amounts of each donations, contributions, and grants and the dates you received them.”  (see more detailed list of questions asked)

Per the Supreme Court, this is totally illegal.  And there are many IRS letters documenting these questions.  So, there is NO DOUBT the IRS was involved in targeting.  The question is:  Who ordered the IRS to do the targeting?

Great compilation of Congressional testimonies:

Here are some important statistics about how the IRS handled conservative applications:

  • Nearly 500 conservative groups were targeted
  • 2011: 27 Progressive (Liberal) applications were approved
  • 2011: Zero Tea Party groups were approved
  • 81 percent of conservative applications were held open by IRS for over 365 days
  • Some groups waited  up to 1,138 days (over 3 years)
  • The Inspector General found “inappropriate criteria” was in place for over 18 months at the IRS for processing applications
  • Senate democrats wrote the IRS in 2010 and again in 2012 asking for MORE scrutiny with tax-exempt groups.

Congressional awareness:
Congress became aware of the targeting due to conservative voters contacting their congressional representatives’s offices.  In March 2012 and again in May, the IRS officials denied the existence of targeting saying it is not happening.

Documents now show that the senior level IRS personnel knew about the targeting as early as June 2011.  However, the IRS’s Determination Unit specifically asks for a search of “tea party or similar organizations’ applications” in 2010.

Senate democrats wrote the IRS in 2010 and again in 2012 asking for MORE scrutiny with conservative tax-exempt groups.

In August 2010 The Democratic Congressional Campaign Committee issues a fundraising email warning about “Karl Rove-inspired shadow groups” asking the IRS to look closer at conservative groups.  In September 2010 Senator Max Baucus, chairman of the Senate Finance Committee, writes to the IRS demanding it investigate nonprofits. The letter names conservative organizations.  In October 2010 Obama calls conservative groups “a problem for democracy.”

The White House denies that Obama had any knowledge of this targeting but does admit that “senior” White House personnel did:

Obama in February 2014 stated there’s “not even a smidgen of corruption” just “boneheaded decisions”.  This was AFTER several investigations proved there is corruption:

So, its pretty apparent that senior level IRS officials were very aware of targeting conservative non-profits as early as 2010.

Lois Lerner:
Lois Lerner IRSRight now, Lois Lerner is the primary target of the investigation.  She is the former Director of the Tax Exempt Organizations division of the IRS and has refused to answer questions and has even not shown up at Congress for Congressional inquiries required by law.

Most believe that she knows how this started, where it started, and who started the targeting.  However, she’s hiding the truth to protect those above her.  The trail beyond her likely leads to the White House, definitely democrats in Congress, and most likely the President.  There are powerful people in these groups who do not want the truth to be discovered due to the consequences they would suffer.

See a detailed Timeline of how this targeting scandal played out.

Documents clearly showed the IRS Targeted conservative groups. Many witnesses who the IRS and other Federal agencies harassed have testified to this.  Like so many other White House scandals such as Benghazi and Fast & Furious, this investigation is moving extremely slow because those who know, such as Lerner, are dragging there feet in responded to inquiries by investigators.

Sources and additional information:
WSJ: A Brief History of IRS Political Targeting (since the 1960’s)
Wiki: History of IRS political profiling