Tea Party Groups Target IRS in Lawsuit

By Ken Berry
 
The IRS scandal involving applications for tax-exempt status by Tea Party groups refuses to go away. Now the American Center for Law and Justice (ACLJ), an advocacy group, has filed a lawsuit on behalf of twenty-five Tea Party and other conservative organizations against the IRS, several of its top officials  including Exempt Organizations (EO) Director Lois Lerner  Treasury Secretary Eric Holder, and Attorney General Jack Lew, claiming their constitutional rights were violated when the IRS singled them out for extra scrutiny.
 
The lawsuit seeks a declaratory judgment that the defendants unlawfully delayed and obstructed the applications to determine tax-exempt status by conduct based on "unconstitutional criteria" and "impermissibly disparate treatment" of the groups. It also requests injunctive relief to protect the organizations, as well as their officers and directors, from retaliation by the IRS or any other abuse. Furthermore, the lawsuit asks for compensatory and punitive monetary damages to be determined at the time of trial.
 
"The IRS and the federal government are not going to get away with this unlawful targeting of conservative groups," said ACLJ Chief Counsel Jay Sekulow in a prepared statement. "As this unconstitutional scheme continues even today, the only way to stop this flagrant and arrogant abuse of our clients' rights is to file a federal lawsuit, which we have done. The lawsuit sends a very powerful message to the IRS and the Obama administration  including the White House: Americans are not going to be bullied and intimidated by our government." He added, "Those responsible for this unprecedented intimidation ploy must be held accountable."

Tea Party Scandal

Follow AccountingWEB's coverage of the Tea Party scandal here.

 
The entire brouhaha began when it was revealed that the EO division had used terms like "tea party" and "patriot" to filter out organizations with conservative ideals for closer examination. The disclosure was promptly followed by a critical report from the Treasury Inspector General for Tax Administration (TIGTA). When congressional committees began poking into the proceedings, the carnage at the IRS was swift and decisive.
 
First, IRS Acting Commissioner Steven Miller was forced to hand in his resignation. He has been replaced by Daniel Werfel, formerly controller of the Office of Budget and Management. Tax Exempt and Government Entities Division (TE/GE) Acting Commissioner Joseph Grant also gave in to pressure to resign. After Lerner pleaded the Fifth before a congressional hearing, she was placed on administrative leave. She could be recalled by the committee, but in any event, her reprieve appears to be short-lived. Ken Corbin, a deputy director in another division, has taken over as acting EO director.
 
The White House hasn't been spared from the ordeal either. In the lawsuit, the ACLJ alleges that the Obama Administration "unlawfully delayed and thereby effectively denied approval of the plaintiffs' applications for tax-exempt status by means of a comprehensive, pervasive, invidious, and organized scheme that purposefully established unnecessary and burdensome inquiries and scrutiny of plaintiffs' applications based solely upon plaintiffs' political viewpoints (or defendants' assumption of plaintiffs' viewpoints, based on their organizational names)."
 
The complaint also asserts that the federal government acted unlawfully by requiring names of donors to the plaintiff organizations; the listing of issues important to the groups (including their positions on such issues); the contents of communications between the organizations and legislative bodies; the applicants' criteria for membership; volunteer names; and the political affiliations of persons associated with the organizations.
 
The IRS has maintained that the activities originated with a couple of "rogue" IRS agents in its Cincinnati, Ohio, office and that the abusive conduct was quickly halted. But the ACLJ claims it has proof that the same tactics were employed in two other offices in California  El Monte and Laguna Niguel  as well as the national office in Washington, DC. Finally, the ACLJ says it has letters signed by Lerner suggesting her personal involvement in the matter nine months after she was informed about it and her failure to act on the information as promised. 
 
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