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IRS also was on the lookout for progressive tax-exempt groups

June 25, 2013


Lookout-binocularsThe Internal Revenue Service's chief acknowledged on Monday, June 24, that agency employees reviewing groups' applications for tax-exempt status had "be on the lookout," or BOLO, lists for more than just conservative groups.

But during a conference call with reporters, IRS Principal Deputy Commissioner Daniel Werfel declined to elaborate on just what was highlighted in the other BOLOs.

The ranking Democrat on the House Ways and Means, however, had no such qualms.

And Sander M. Levin (D-Mich.) also wants to know why The Treasury Inspector General for Tax Administration (TIGTA) chose to name only BOLO lists of conservative groups it its report on the tax agency's inappropriate screening of applications for 501(c)(4) status.

Groups that receive this tax-exempt status must be mostly involved in social welfare instead of political, campaign-related activities.

BOLO for progressives: Following Werfel's press conference and release of the agency's report of its internal investigation, Charting a Path Forward at the IRS: Initial Assessment and Plan of Action, Levin late Monday afternoon had some IRS news of his own.

He announced that the IRS had provided Congressional investigators with new information that shows that the term "progressives" also was included on IRS tax-exempt application BOLO lists.

In a memo to "interested parties," Levin says:

"Based on our [Democratic staff] investigation, it has become clear that the Inspector General failed to inform the Congress that the following category also appears on the same BOLOs that contain the 'Tea Party' criteria and even appears on the BOLOs after the 'Tea Party' criteria had been removed:

Category name
in the BOLO
Issue Description in the
BOLO

Progressives

Political activities. Common thread is the word "progressive." Activities appear to lean toward a
new political party.
Activities are partisan and appear anti-Republican. You see references to
"blue"
as being "progressive."

Second, certain individuals on our tax staff have reviewed the list of 298 organizations reviewed by TIGTA during its audit and confirmed that there are liberal organizations on the list."

That explains a lot.

In its audit of the tax-exempt review process, TIGTA cited lists that told employees in the Cincinnati office to give added scrutiny to groups with Tea Party, 9/12 and patriot in their names.

That revelation garnered much attention and conservative ire, both on Capitol Hill and outside the Beltway. The Republican-led House Ways and Means even held a special hearing where some of the Tea Party groups testified,
some quite emotionally, about being picked on by the IRS.

Some, not most: But those right-wing groups weren't alone in getting special unwanted IRS attention.
 
TIGTA found that while approximately one-third (32.2 percent) of the applications were on the conservative side of the political spectrum, the other two-thirds were not.

Breakdown of IRS reviewed political cases by name

Levin says that "notably, TIGTA did not attempt to break down in its report" how many in the other category were liberal organizations even though it stated that it reviewed all 298 applications.

Other BOLO lists, dated between August 2010 and April 2013, included such terms as "Medical Marijuana," "Occupied Territory Advocacy," "Healthcare legislation," "Newspaper Entities," "Paying National Debt" and "Green Energy Organizations."

Now maybe we'll have a Ways and Means hearing where these more liberal application targets can tell their stories. Quit laughing. Levin is asking for such a session. It could happen.

Stop it! I can still hear you snickering.

New questions for TIGTA: In the meantime, Levin wants to know why TIGTA only spelled out Tea Party et al BOLO lists in its May audit report that set off cries of scandal and prompted further IRS investigations.

In a letter to Inspector General J. Russell George, Levin asks:

"In outlining the overall objective of the audit, TIGTA wrote that it sought to 'determine whether allegations were founded that the IRS targeted specific groups applying for tax-exempt status.' Please describe in detail why your report dated May 14, 2013 omitted the fact that 'Progressives' was used. Did you investigate whether the criteria 'Progressives' in the BOLO lists was developed in the same manner as you did for 'Tea Party'? If not, why?"

Levin wants answers from TIGTA by July 8.

The ranking Ways and Means Democrat also has asked the committee chairman, Dave Camp (R-Mich.) to schedule another hearing so that George can "answer questions on the glaring omissions" in the watchdog's original report on BOLO tax exempt lists.

Stay tuned, folks. Looking into the IRS could get even more exciting.

You also might find these items of interest:

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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