An IRS overburdened by a burst of applications from super PACs after two big Supreme Court rulings most likely led agency employees to begin targeting tea party groups, observers said on Tuesday.
“There's a pretty direct link between the Citizens United line of cases and why the IRS is put in this position," Rick Hasen, an election law professor at the University of California-Irvine, told The Huffington Post
, “although it does nothing to explain how the IRS decided to deal with this problem.”
Last week, Lois Lerner, director of the IRS' exempt organizations division, apologized for targeting conservative groups.
She said that between 2010 and 2012, “we started seeing a very big uptick in the number of 501(c)(4) applications we were receiving.”
The number “more than doubled — about 1,500 in 2010 and over 3,400 in 2012,” Lerner said.
And lower-level employees in Cincinnati resorted to using such monikers as “tea party,” “patriot” and “9/12” to screen applications, among other tactics, she said.
“Lois Lerner left me with the impression that the agency, at least at the lower staff level, was at least overwhelmed by the number of applications that they had to process — and they came up with some shortcuts to handle the processing of these applications and made some pretty big mistakes in how they developed those shortcuts,” Paul S. Ryan, a lawyer at the Campaign Legal Center, a campaign finance watchdog group, told the Post.
“They can be very useful tools, but they're only tools and they're not perfect tools,” Charles Watkins, a tax lawyer at Webster, Chamberlain & Bean, told the Post. “It was an unfortunate choice of terms because it suggests that the IRS was only looking for a certain kind of conservative organization — even though it was pretty clear to everyone that there are liberal organizations that seem to be doing pretty much the same thing.”
Two Supreme Court decisions gave rise to the flood of super PACs: Federal Election Commission v. Wisconsin Right to Life in 2007 and Citizens United v. FEC in 2010.
The decisions reversed a bevy of campaign finance regulations, opening the door for 501(c)(4) groups to engage in increasing amounts of political activity, the Post reports.
Tax-exempt 501(c)(4) nonprofits can accept unlimited contributions from any source — without disclosing their donors — and they have become the vehicle of choice for those wanting to contribute “dark” money to political campaigns on various levels.
The change led to a spike in the number of 501(c)(4) applications submitted to the IRS, and gave officials the added role of overseeing partisan politics.
In addition, the IRS has been under growing pressure from Congress and campaign finance watchdog groups to scrutinize 501(c)(4) applications more closely.
Nonprofit groups spent more than $100 million on political activities in the 2010 election and more than $300 million in the 2012 election, according to the Center for Responsive Politics.
Democrats and campaign finance reform groups have demanded that the IRS reject applications from groups like Crossroads GPS, a 501(c)(4) nonprofit founded by Karl Rove that spent $25 million on TV spots attacking President Barack Obama during the 2012 election, the Post reports.
"It's just another example of just the inability of the IRS to really enforce what are really political election campaign regulations," Ofer Lion, a lawyer who works with tax-exempt organizations at the Hunton & Williams law firm, told the Post. "These are career civil servants down in the IRS basement somewhere without adult supervision trying to deal with problems they don't know how to deal with."
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