IRS Forced To Release Names Of Targeted Groups

This post was originally published on Forbes Apr 24, 2015

So we had another Tea Party decision on April 1 of all days. NorCal Tea Party Patriots is one of the ten organizations in a lawsuit against the IRS because of delays and intrusive scrutiny while they were applying for exempt status.  They want it to be a class action suit, but they need information from the IRS to determine what organizations should be in the class.  Here is what they are looking for specifically.

56. Please produce all charts, lists, spreadsheets, or indexes of groups who had their Applications for Tax Exemption selected or flagged by the IRS for heightened review based on the Emerging Issues tab of the BOLO.
63. Please produce the document titled “501c4 Cases for TIGTA(1).xls,” which the IRS sent to TIGTA on June 11, 2012. 

64. Please produce the document titled “Advocacy Case Tracking Sheet 06052012.xls,” which the IRS sent to TIGTA on June 11, 2012. 

(Doc. 142 at PageID 2520.) They also requested that the Government authenticate, or respond that it cannot authenticate, the so-called “USA Today” document referenced as Exhibit B in CM/ECF Doc. 142 and filed at CM/ECF Doc. 142-2 at PageID 2588–99. The Government again objected to the narrowed discovery requests on the basis that responding would require them to violate § 6103(a). Both parties agree that the discovery Plaintiffs seeks qualifies as “return information” pursuant to § 6103(b)(2).

Here is a link to the USA Today document they are referring to.  It is worth a look.  I found the entry on page 6 about Tea Party Patriots Inc particularly interesting.

The IRS argued that it could not make those disclosures, because they would be in violation of Code Section 6103 which protects the confidentiality of returns and return information.  The judge went with NorCal on this one.

The Court concludes that the return information sought is directly related to the issue of class certification in this federal court proceeding. The names of the putative class member organizations and their control dates—the date which the putative class member organizations submitted their applications for tax exempt status to the IRS—are directly related to the issue of class certification. Plaintiffs seek the return information of the putative class members to prove to the Court that the Federal Rule of Civil Procedure 23(a) and 23(b) requirements such as typicality, commonality, and whether the IRS acted on a grounds that applied generally to the putative class are satisfied.

About NorCal

NorCal Tea Party Patriots is a fairly modest-sized organization.  According to its 990-EZ for 2013, it raised just over $93,000 and has no salaries.  Most of the money seems to go to events.

CEO Ginny Rapini does not seem to be in the news much of late, but she was on the airwaves quite a bit in 2013.

There was a story last summer  and one in January about her appearing at rallies in support the State of Jefferson, which would be formed from the northern part of California and the southern part of Oregon.

Will There Ever Be An End?

I'm beginning to despair of their ever being an end to the IRS Scandal on Day 714 by the TaxProf count, as I write this. I thought this latest decision might be a good opportunity to reach out to someone who might have a different view on the whole matter.

Frank Wolpe, Professor Emeritus at Bentley University has written a white paper about rebuilding the IRS. (download)

The paper identifies the ill-conceived massive 1998 structural reorganization and division (like salami-slicing) of field operations as a major cause of the IRS’s current legal battles and “downward slide.” In its 1998 aftermath, we were all left with an overly centralized Washington IRS National Office and an undermanaged array of field operations. That’s where the Tea Party scandal started; and, even more importantly, it need never be repeated. Indeed, such events must stop!

“With that recognition, change-makers can travel a 2015 bipartisan pathway to addressing a wrong-headed 1998 “solution” to a 1998 non-existent structural problem by introducing a 2015 proposal for a National Office consolidation (slimming down) coupled with a field operations decentralization (closer to customers and ending the practice of absentee senior management without local accountability).

Of course the notion that the scandal must have actually started in the Oval Office still has an irresistible grip in some circles, so a boring reorganization just won't be satisfying.  So maybe it never will end.

Other Coverage

Hans von Spakovsky of cnsnews.com wrote

The arguments in this case by the Justice Department are another example of how the IRS has been hiding behind Section 6103. That law was intended to prevent the IRS from publicly disclosing private tax information—such as its illegal disclosure of the tax returns of the National Organization for Marriage (the IRS agreed to pay National Organization for Marriage $50,000 to settle that case in June of 2014). But the IRS has been trying to use this law to prevent having to disclose its abusive treatment of taxpayers.

Before Its News wrote

Mark Meckler, a tea party member and president of Citizens for Self Governance, which is funding the suit, stated that “We are at the precipice” of certifying the class action suit. The plaintiffs in the suit currently consist of 10 groups, among them the NorCal Tea Party Patriots, the Faith and Freedom Coalition of Ohio, and the Texas Public Policy Foundation. The groups initiated their suit in 2013.

That sent me on one of my rabbit trails to learn more about Citizens for Self-Governance, which yielded this copy of the original complaint.  The donation page of CSG says it is a 501(c)(3), but I did not find them on guidestar.org.  I requested their Form 990.  There may be an interesting story there.  So many projects so little time.  Mark Meckler was on the ground floor of the Tea Party.  The focus of CSG right now seems to be a Convention of the States to fix the Constitution.  What could possibly go wrong?

Any other coverage I found was similar in tone.