WASHINGTON, D.C. — A tea party group on Maui says it was among those targeted by the IRS for special scrutiny when it petitioned for tax-exempt status.
The focus on conservative groups angered many on both sides of the political spectrum. On Tuesday, President Barack Obama announced the resignation of the IRS’ acting commissioner and called the agency’s targeting of conservative groups “inexcusable” and an “outrage.” Even so, the former head of the Maui group said he suspects there’s more to the mess than just the low-level bureaucrats that have been blamed.
Bill Doyle served as a board member and then president of the Tea Party Maui during the two years it sought tax-exempt status from the IRS. He said he believes the unusually high level of scrutiny received by tea party and other organizations came from “higher up,” though he said only congressional investigations into the scandal will determine whether it reached the White House.
In an interview with Civil Beat, Doyle described a 26-month ordeal with the IRS that involved the agency asking what the Inspector General has called “unnecessary” questions regarding the identity of its donors, membership and activities. “As I tell this story I have chicken skin because it’s chilling,” Doyle said.
He said the IRS’ withholding of tax-exempt status impaired the Maui group’s ability to recruit and get candidates on the ballot that reflected the organization’s views, thereby limiting the choices before voters.
Doyle said also that he was disappointed, but not surprised, that Hawaii’s all-Democratic Congressional delegation did not immediately express outrage. Tea Party Maui is non-partisan, but its belief in smaller government and the free-market, as well as its anti-tax stances, often put it at odds with Democrats.
Sen. Brian Schatz was the first of the delegation to comment on Tuesday, four days after news broke about the IRS’ targeting of the groups. He said in response to a question by an NBC reporter that he thinks someone should lose their job over the affair. He retweeted a tweet by a reporter saying as much, but declined to elaborate further when asked by Civil Beat.
Tea party in Hawaii was targeted by IRS. Asked if he’s at the point where he thinks people should be fired, Sen. Brian Schatz (D) said: Yes.
— Kasie Hunt (@kasie) May 15, 2013
Rep. Colleen Hanabusa also issued a statement Tuesday night. She contrasted herself a bit with Schatz, whom she’s running against in next year’s Senate special election.
She said: “The allegations against and admitted actions of the IRS are a gross breach of the public trust. We deserve nothing less than a complete assurance that these and similar acts are no longer being committed and will not be tolerated.
“However, any sanctions against those responsible, from termination to criminal penalties, must come as the result of full, fair and transparent investigations by appropriate authorities. The resignation of acting commissioner Steven Miller is a step in the right direction, and I hope that others will similarly take responsibility for their actions.”
Sen. Mazie Hirono also on Tuesday night said in a statement to Civil Beat, “Reports that personnel at Internal Revenue Service singled out certain political groups, including at least one in Hawaii, are very troubling. Political groups should never be targeted. The President is right to act quickly and put in place the recommendations offered by the agency’s inspector general. This should never have happened and we should make sure this never happens again.”
Rep. Tulsi Gabbard also weighed in on Thursday, saying, “I am shocked and disappointed by the Internal Revenue Service’s targeting of certain groups. It exposes a problem that lies not just with a few ‘bad apples,’ but rather a systemic problem with a culture that condoned this type of illegal targeting. The IRS and all government agencies have a duty and obligation to apply our laws equally, regardless of political, ethnic, religious affiliation or whether they have exercised their First Amendment rights to criticize the government.”
She said President Barack Obama “has taken first steps to remove those responsible, but more must be done.”
Doyle said his organization never considered asking Hawaii’s delegation to assist during the ordeal from 2010 to 2012.
“They are of no help,” he said. “They always say write your congressman. But in the bluest of blue states…we knew it would be a waste of time.”
Doyle did say the group considered contacting the late Sen. Daniel Inouye, because he “tended to be fair in terms of Constitutional rights,” but he had been in failing health and the group just decided to hire an attorney.
Adrienne King, coordinator of the Honolulu Tea Party, says she too was harassed. But she wasn’t surprised at the initial lack of comments about the scandal from the delegation.
“Not the least bit. No,” she said. “It’s a Democratic president and a Democratic administration.”
Lost somewhat in the coverage over the scandal is the length of time conservatives groups had fought for tax-exempt status and the communications from the IRS that Doyle perceived as “intimidating” and King called “harassment.”
Doyle said the group’s board and membership in May 2010 decided to become a legally-recongized entity and sough 501(c)4 tax exempt status, which would allow it to conduct politcal activity as long as it was less than half of their activities. In comparison, 501(c)3 organizations do purely charitable and educational work.
Aside from organizing rallies and lobbying, Doyle said the group did educational work, holding classes on the Constitution.
King maintains a rarely updated website and Facebook page, and organizes a July 4 anti-tax rally. She said her group doesn’t endorse candidates because that would just cause infighting and doesn’t lobby because she doesn’t think she could get appointments with Democratic state legislators.
Both groups, however, got lumped in with major political players who have shrouded themselves as tax-exempt organizations.
As the report by the Department of Treasury Inspector General for Tax Administration report noted, 501c(4) organizations had come under scrutiny because some had been created to skirt campaign disclosure requirements. Some of the groups are not required to disclose its donors, and funnel money into Super PACs that spend large sums to influence political campaigns without having to say who is bankrolling the effort.
The report cited studies by the Center for Responsive Politics that found than tax-exempt groups spent $133 million in 2010 on federal candidate-oriented expenditures. In 2012, the figure increased to $315 million, as more groups sought tax-exempt status.
Doyle, however, said Tea Party Maui does not funnel money into Super PACs. The group does not actively seek money, but has a donation box at its meetings.
But because of the concerns about national political grous, the Inspector General’s report said the IRS began paying special attention to applications for tax-exempt status through the IRS’ Determinations Unit in Cincinnati.
“The Determinations Unit developed and began using criteria to identify potential political cases for review that inappropriately identified specific groups applying for tax-exempt status based on their names or policy positions,” the report said.
To identify potentially-political groups for further review, the unit began flagging applications with Tea Party, Patriots, or 9/12 in the organization’s name as well as other “political-sounding” names, instead of identifying them based on tax regulations.
Those flags received additional review. The practice not only resulted in added scrutiny based on their names, but was also ineffective in spotlighting political groups.
The Inspector General’s report found it “may have led to inconsistent treatment of organizations applying for tax-exempt status. For example, we identified some organizations’ applications with evidence of significant political campaign intervention that were not forwarded to the team of (review) specialists for processing but should have been.”
The team of specialists charged with identifying potentially political groups was formed in April, 2010, according to the report. A month later, Tea Party Maui submitted its application.
“We were told it was a 6 to 12 week process and these are routinely granted,” Doyle said. The group expected to get its tax exempt status by that fall, in 2010.
In late August, the group received a letter from the IRS asking for more information.
“It was an 11-page letter with 29 questions with multiples pieces. It was extremely overbearing, over-reaching and intimidating,” he said.
The IRS wanted to know the names of the groups’ members and its donors. It asked for the names of its volunteers and staff.
“We felt there was something else going on than just granting our status,” said Doyle, who was a board member at the time. He said the group answered the questions it felt comfortable answering and sent in the information.
“And we hear nothing for the rest of 2010, then in 2011, January, February and March went by,” he said. The group contacted the IRS in Cincinnati and was told by a worker that he was swamped.
One member of the group went to the local IRS office to seek help and sat waiting from 9:30 a.m until 3 p.m.
“He was ignored all day and then they actived very dismissively and rudely,” Doyle said. The man left without an answer.
The rest of 2011 went by without a response. As it turns out, according to the Inspector General’s report, miscommunication within the IRS, the Determination team had been waiting during that time for guidelines from a technical team on how to process politcal cases. “The team of (determination) specialists stopped working on potential political cases from October 2010 through November 2011, resulting in a 13-month delay, while they waited for assistance from the Technical Unit,” the report said.
In January, 2012, shortly after Doyle became the group’s president, a new letter came from the IRS.
“It was more intimidating, more intrusive, more onerous, more outrageous” than the first one, Doyle said. “(The letter asked if) any of the members had run for political office, had they considered running for office. Who was on our donor list. How much time had each spent individually on political activities. They wanted every web page we’ve had since our establishment. Every issue of the newsletter. Who contributed to it. What are their backgrounds. Who attends our meeting. Who were our invited speakers and they wanted texts of their speeches.”
Doyle recommended the group write back to the IRS saying it was not going to answer their questions. Fellow board members, many of them small business owners, were worried about reprisal by the IRS but ultimately agreed.
Upon hearing about other tea party groups around the country having the same problems, the group contracted with the Washington, D.C.-based American Center for Law and Justice, which began pressing the IRS to grant the legal status.
The lawyers were initially surprised to hear about the group having problems. “Yes,” Doyle told them. “Even in little Maui way out here in the middle of the Pacific.”
Tea Party Maui’s tax-exempt status was finally granted in July 2012, more than two years after the application was filed.
Still, the experience was “chilling,” Doyle said. “Are we living in America or is this some Communist country or some totalitarian government?”
“We’re the tea party. We rally peacefully and we wave flags. We’re not Occupy,” he said.
King said her group applied for tax-exempt status on Dec. 31, 2011, and wasn’t granted tax-exempt status until this March, almost a year and a half later. But first she also received a letter from the IRS asking for more information on July 27, 2012, mostly asking about its July 4 rally. It asked for copies of materials handed out at the rally, how speakers were chosen for the rally, how much time each was given to talk.
“I’ve got a First Amendment right to say what I please,” King said. “It’s obvious it was harassment.”