Report: One-Third of Tax-Exempt Groups Scrutinized by IRS Were Not Conservative

A substantial minority of groups scrutinized weren’t conservative, finds a prominent tax economist.

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Lois Lerner, head of the IRS unit that decides whether to grant tax-exempt status to groups, listens at the start of a House Oversight Committee hearing.

About one-third of tax-exempt groups scrutinized and approved by the Internal Revenue Service were not conservative, according to a new report by a leading tax economist.

Of the 176 groups granted tax-exempt status whose names were released by the IRS earlier this month, Martin Sullivan, chief economist at Tax Analysts, a non-profit tax news and analysis service, found 46 contained words such as "tea party" or "patriots" in their names, while 76 were other conservative organizations, and 48 were not conservative.

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The report comes on the heels of a high-profile apology from the IRS earlier this month for having inappropriately flagging tea party groups for additional reviews.

Among the non-conservative groups Sullivan found the IRS had scrutinized were Progress Missouri Education Fund, a progressive advocacy group, New York Civic Action Inc., a left-leaning voter education group, and ALICE, a legislative policy group meant to counter the right-leaning group ALEC.

"This [analysis] tells you that there certainly were other groups selected. That is, conservatives were not singled out. And that certainly changes the tenor of a lot of commentary that you hear," Sullivan tells Whispers.

 

In testimony earlier this month before the House Ways and Means Committee, ousted IRS commissioner Steven Miller argued that the agency had not just targeted tea party groups, noting that "organizations from all walks and all persuasions were pulled in."

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Though the study appears to bolster Miller's defense, Sullivan cautions that the IRS's political bias (or lack thereof) could only be firmly established if the agency released the names of all groups that applied for tax-exempt status – not just the groups that won approval.

"There was a surge of political activity from the tea party, so it's not far-fetched to suspect that there was a higher percentage of applications from the right than from the left at that time," says Sullivan. "That could explain why you have a 70-to-30 split."

Because the IRS hasn't released the names of all applicants, Sullivan's analysis excludes any tea party groups who never won IRS approval. Tea Party Nation founder Judson Phillips told Whispers earlier this month that some tea party groups waited years without making it through the approval process.

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