Conservative groups say IRS practices hurt their ability to raise money

Chris Moody

Leaders from conservative and tea party groups told a congressional panel that the Internal Revenue Service's methods of vetting organizations seeking nonprofit status discouraged supporters from donating to their causes.

Representatives from six organizations appeared before members of the House Ways and Means Committee on Tuesday to discuss their interactions with the IRS, a government agency that has been under fire since officials admitted to using a "Be On The Lookout" list that required agents who were screening tax-exempt status applications to place heavier scrutiny on conservative groups. The group leaders, who came from small local tea party organizations, anti-abortion advocacy chapters and nonprofits that teach children about the Constitution, said they struggled to solicit donations because of the delay in receiving IRS approval.

“The damage to our donor base is incalculable, and I would prosecute those responsible,” said John Eastman, the chairman of the National Organization for Marriage, a national group that works against efforts to legally redefine marriage.

Kevin Kookogey, the founder and president of Linchpins of Liberty, a group that in part educates young people about the American principles and the founding documents, said the IRS delayed for more than two years before granting his organization tax-exempt status, which, he added, cost them a $30,000 grant.

"Because I could not get status, everything effectively stopped," Kookogey said. "Since May 2011, I have been dormant, not only out of the inability to raise money but out of abject fear that the government had a target on my back."

Tuesday's hearing was the fifth public examination of the IRS' practices by a congressional panel since a Treasury inspector general released a report detailing how the agency screened tax-exempt applications from 2010 to 2012. In previous hearings, former IRS officials conceded that "mistakes were made" and that the IRS actions were "inappropriate," but that no laws were broken. Lois Lerner, the IRS employee in charge of the office that grants tax-exempt status to applicants, last month refused to take questions from lawmakers about the agency's controversial practices. Lerner also refused to step down, prompting Daniel Werfel, the new acting head of the IRS, to put her on paid administrative leave. At a hearing on Monday, Werfel vowed to seek more information about his agency's behavior.

While much of the hearing on Tuesday was filled by testimony from local conservative leaders who detailed their personal experience, some Democrats on the committee took issue with accusations that the IRS had treated them unfairly. Washington Democratic Rep. Jim McDermott, who chalked up the IRS' actions to "foolish account management and dangerously chosen shortcuts," said the IRS was justifiable in screening groups to ensure they aren't engaged in political activity.

"None of your organizations were kept from organizing or silenced," McDermott said. "We're talking about whether or not the American taxpayers will subsidize your work. We're talking about a tax break. If you didn’t come in and ask for this tax break, you would have never have had a question asked of you."

The next lawmaker to speak, Wisconsin Republican Rep. Paul Ryan, repudiated McDermott's remarks.

"We had the former IRS Commissioner [Douglas] Schulman who knew about the political targeting long before Congress was told, and has since implied that they were responsible for the targeting because they chose to apply for tax-exempt status," Ryan said, before pointing to the witnesses below him. "So you are to blame, I guess, is the message here? Do you think you were targeted based upon your political beliefs, your religious beliefs or just because you chose to apply?"

"Our beliefs," responded Becky Gerritson of the Wetumpka Tea Party. "Our views."

"We have not heard that this is happening to any groups that have the opposing views," Ryan said later. "So to suggest that these citizens are to blame for applying, I don't understand how anyone can make that conclusion."

Tuesday's hearing won't be the last for the embattled agency. Later this week, the Treasury inspector general will appear before the House Committee on Oversight to discuss another audit of the IRS into its spending on high-dollar conferences over the past few years.