When CVFC, a conservative veterans group in California, applied for tax-exempt status with the Internal Revenue Service (IRS), its biggest expenditure that year was several thousand dollars in radio ads backing a Republican candidate for Congress.
The Wetumpka Tea Party, from Alabama, sponsored training for a get-out-the-vote initiative dedicated to the “defeat of President Barack Obama” while the IRS was weighing its application.
And the head of the Ohio Liberty Coalition, whose application languished with the IRS for more than two years, sent out emails to members about Mitt Romney campaign events and organized members to distribute Romney’s presidential campaign literature.
Representatives of these organizations have cried foul in recent weeks about their treatment by the IRS, saying they were among dozens of conservative groups unfairly targeted by the agency, harassed with inappropriate questionnaires and put off for months or years over decisions on their applications.
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But a close examination of these groups and others reveals an array of election activities that tax experts and former IRS officials said would provide a legitimate basis for flagging them for closer review.
Such advocacy groups are often favored by strategists and donors not for the tax benefits — they typically do not have significant income subject to tax — but because they do not have to reveal their donors.
The IRS is already separately reviewing roughly 300 tax-exempt groups that may have engaged in improper campaign activity in past years, according to agency planning documents.
A report issued this month by the Treasury Department’s inspector general, J. Russell George, found that inappropriate criteria, including groups’ policy positions, were used to flag some cases.
IRS agents are obligated to determine whether a 501(c)(4) group is primarily promoting “social welfare.” While such groups are permitted some election involvement, it cannot be an organization’s primary activity.
Emerge America, which trained women to run for office, was granted 501(c)(4) recognition in 2006, but its status was revoked in 2012. Training people how to run for office is not in itself partisan activity, but the IRS determined that the group trained only Democratic women and was operated to benefit one party.
When CVFC, the veterans group, first applied for IRS recognition in early 2010, it stated that it did not plan to spend any money on politics. The group, whose full name in its application was CVFC 501(c)(4), listed an address shared with a political organization called Combat Veterans for Congress PAC. CVFC told the IRS that it planned to email veterans about ways in which they “may engage in government” and provide “social welfare programs to assist combat veterans to get involved in government.”
But later in 2010, as it awaited an IRS ruling, the organization spent close to $8,000 on radio ads backing Michael Crimmins, a Republican and a former Marine, for a House seat in San Diego, according to Federal Election Commission records.
The spending is not detailed in the group’s tax return for 2010, raising questions about whether it properly accounted for the expense to the IRS. The group also checked off a box marked “No” when asked if it had engaged in direct or indirect political activities on behalf of a candidate for political office.
The group received two rounds of questions from the IRS in 2012, according to its lawyer, Dan Backer.
They included queries about the group’s donors and its exact relationship with Combat Veterans for Congress PAC.
The agency also asked about CVFC’s activities, but the group neglected to bring up its radio ads in its follow-up responses.
In Alabama, the Wetumpka Tea Party organized a day of training for its members and other Tea Party activists across the region in the run-up to the 2012 election.
The training was held under the auspices of the Adopt-a-State program, a nationwide effort that encouraged Tea Party groups in safely red or blue states to support Tea Party groups in battleground states working to get out the vote for Republicans.
Adopt-a-State was a key component of Code Red USA, a get-out-the-vote initiative organized by a conservative political-action committee.
The goal of Code Red USA was made clear in one of its fundraising videos, which told supporters: “On Nov. 6, 2012, Code Red USA authorizes the defeat of President Barack Obama.”