IRS bull’s-eye included tax-exempt groups

By Bob Unruh

In a stunning turn of events into the investigation into Internal Revenue Service targeting of conservative groups applying for tax-exempt status, a member of Congress has revealed the IRS also mounted Big Brother-type surveillance over existing groups.

The confirmation from Rep. Dave Camp, R-Mich., chairman of the House Ways and Means committee, comes just days after WND reported the IRS even today sends small exempt organizations to a major progressive think tank to have tax details processed.

In a statement first released in the Wall Street Journal, Camp said his committee’s ongoing investigation discovered the federal government singling out established groups “for audits.”

“We now know that the IRS targeted not only right-leaning applicants, but also right-leaning groups that were already operating as 501(c)4s,” Camp said. “At Washington, D.C.’s direction, dozens of groups operating as 501(c)4s were flagged for IRS surveillance, including monitoring of the groups’ activities, websites and any other publicly available information.

“Of these groups, 83 percent were right-leaning. And of the groups the IRS selected for audit, 100 percent were right-leaning,” he said.

Camp’s committee has been working lately to oppose IRS plans for a raft of new regulations that would target the speech rights of those right-leaning organizations, by determining that efforts such as candidate forums or voter information drives would be designated as “political” speech and therefore banned.

Camp said those rules “are a blatant attempt to legalize and institutionalize targeting by the IRS, and are designed to put conservative groups out of business. It is no wonder the IRS tried to develop this rule behind closed doors and out of the public’s view.”

He continued, “I want to be perfectly clear – this committee will fight any and all efforts to restrict the rights of groups to organize, speak out and educate the public, just as unions are allowed to do so. We will get to the bottom of this, and I expect the IRS to produce – quickly – the outstanding documents the committee has requested.”

WND’s original report noted that those small exempt organizations are directed by the IRS itself to file confidential tax information through the Urban Institute, whose chief is linked to the Center for American Progress, the source for many of Barack Obama’s ultra-progressive agenda items as president.

Cleta Mitchell, a top-flight Washington attorney, told WND, “If true, this is a violation of federal law. And since most of the tea-party groups have annual revenues of [$50,000] or less, this would redirect their filings to a group whose mission is fundamentally at odds with tea-party organizations.”

She continued, “Federal law strictly prohibits the disclosure of confidential taxpayer information to persons outside the IRS. It is a felony to disseminate the information.

“Surely this cannot be happening. Surely,” she said. “This would be well more than a ‘smidgen’ of corruption.”

Mitchell, a partner in the Washington-based law firm Foley & Lardner LLP, is well known for providing expert legal advice to conservative groups seeking tax-exempt status.

She was referring to Obama’s claim on Sunday that there is no IRS scandal, and his insistence there was “not even a smidgen of corruption” in the agency’s targeting of conservative groups applying for tax-exempt status.

In a statement to WND, Stu Kantor of the Urban Institute expounded on the organization’s contracted responsibility to process information from exempt organizations.

He noted that the Pension Protection Act of 2006 requires small nonprofits to file electronically a Form 990-N.

“The Urban Institute’s National Center on Charitable Statistics has been under contract to the IRS since 2007 to develop a web-based application to support this requirement,” he said.

“Under this contract, we forward the e-Postcard filings to the IRS, but we do not evaluate, analyze, or provide recommendations based on the original filed information.

“If required information is missing from the e-Postcard, the automated system will notify the filer that the form is incomplete,” he said.

Rep. Michele Bachmann

According to, the left-leaning Urban Institute has had nearly $400 million in taxpayer funds obligated to its 1,331 “prime award” government contracts and 133 grants from the following agencies:

Upon learning of the massive government contracts, Rep. Michele Bachmann, R-Minn., asked, “Why outsource to Obama’s political enforcers, if not to connect them to unlimited tax money? Awarding contracts to the radical agenda-based Urban League places his radical interlocutors in charge as his political judge and jury overseeing the complete transformation of our government into the lawless regime Obama envisioned in 2008.”

WND also reported on Tuesday on some of the comments about the Urban Institute’s arrangement with the IRS.

“We’re going to be conducting an investigation,” said attorney Kevin Snider of the Pacific Justice Institute. “If there’s something that’s questionable, we’re going to ask for congressional hearings.”

He said the government needs to have a standard “above reproach” and exhibiting “complete neutrality” for its operations, especially in work such as that conducted by the IRS, which already has been facing criticism for its admitted targeting of conservative organizations.

And Bachmann said, “WND did the investigation the IRS refused to do.”

“The IRS fox isn’t guarding the henhouse,” she said, “The IRS fox has set up the deep fryer for immediate carcass processing! Served ‘progressive style’!”

She continued, “The people to Holder: Time to prosecute!”

WND’s report revealed the IRS contracts with the group that is supported by George Soros to process data filed by smaller tax-exempt groups.

Also, the president of Urban Institute is Sarah Rosen Wartell, who is the co-founder of the Center for American Progress. That widely is considered ground zero for the development of many of the Obama administration’s progressive policies.

At the supposedly “nonpartisan” organization, employees have a record of donating nearly 100 percent of their political contributions to Democrats.

Officially, the Urban Institute advocates for totally socialized medicine, carbon taxes and amnesty for illegal aliens, all in contradiction to the beliefs of many of the groups submitting tax information.

Snider told WND another approach might be to seek a court order staying action on certain IRS procedures “until the Urban Institute is out of the picture.”

And Tom Fitton, chief of Judicial Watch, recalled for WND his own organization’s fights with the IRS.

That followed immediately after Judicial Watch’s criticism of then-President Bill Clinton.

“They essentially audited us for our entire history up to that point,” he said. “We were told, ‘What do you expect when you sue the president? If you’re going to scrutinize the president, the government is going to scrutinize you.'”

The organization has detailed its war with the IRS in “The Corruption Chronicles: Obama’s Big Secrecy, Big Corruption, and Big Government.”

Fitton recalled that it was a memo from the White House to the IRS commissioner that started the audits of his organization.

“No one did anything about it,” he said. “It was as lawless as anything Nixon would have dreamed of.”

Then, he said, “Look what’s happening now.”

David French, senior counsel for the American Center for Law and Justice, which is representing dozens of those targeted tea-party groups, said, “It’s disturbing but hardly surprising that the IRS – which has proven itself to be a highly partisan government agency – has partnered with partisans outside the government. Partnering with politic radicals to perform a basic function of the IRS is no way to run a government.

“This is just the latest in a series of IRS behaviors that are unacceptable. This revelation adds to the decline in trust and confidence that Americans have in the Obama administration. And it’s one more reason that we believe it’s time for a special prosecutor – an independent investigation – to hold those responsible for corruption and abuse accountable.”

WND columnist Christopher Monckton of Brenchley suggested another approach altogether.

“Where a department behaves as corruptly as the IRS, first selectively moving against conservative nonprofits only and then forcing all nonprofits to file their tax returns with a hard-left group only, with the menace that if they did not do so they would lose their nonprofit status, one statute springs to mind.

“The RICO statute,” he wrote.

“The IRS, by its actions, has shown itself to be a racketeer-influenced criminal organization. The nonprofits should band together, now, and mount a RICO action against it.

“Their lawyers will tell them they cannot possibly win. But they will win. And win big. The RICO statute, designed to deal with an earlier generation of Chicago gangsters, pays the successful plaintiffs three times their costs in fighting the action. Once the courts have held the IRS to be corrupt, it can and will be closed down,” he wrote.

He said a foreign company should be contracted for the IRS work.

“An organization that has behaved with such outrageous disregard for the iron obligation of strict political neutrality that is the first and most sacred duty of any tax-gatherer can only have done so because throughout its senior management there is ingrained contempt for the taxpayer and for the law,” he added. “The IRS has put politics above the law. Sack the lot.”

The IRS targeting of tea-party and conservative groups arose in May 2013 when the agency admitted during a news conference that groups with “tea party” or “patriots” in their names were flagged for extra IRS review.

Dozens of organizations ultimately filed lawsuits over the targeting, and members have testified about the questions they faced from the IRS, such as about the content of their prayers, whether they would promise not to protest the Planned Parenthood abortion agenda, and others.

Many still are in court, and Mitchell explained to Congress she knew that as far back as October of 2011 the targeting was being guided by Washington, because when she contacted the Cincinnati IRS agent assigned to one of her clients and offered to try to help smooth the application process, she said she was told, “Oh, there’s a task force in Washington; we can’t do anything until we hear back from Washington.”

The Form 990, which the IRS directs exempt groups to file through the Urban Institute, provides the public with financial information about the group, and it also is used by the government to keep up to date with nonprofits and prevent such organizations from abusing their tax-exempt status.

Failure to complete a Form 990 for three consecutive years automatically results in the loss of tax-exempt status.

The forms can be filed by larger organizations either electronically or by filling out and mailing a complete form manually. Most nonprofits whose annual gross receipts are $50,000 or less are required to electronically submit Form 990, which is also known as the e-Postcard.

In 2007, the IRS modified its Form 990, requiring more significant disclosures on corporate governance and boards of directors.

The Urban Institute’s partnership with the IRS, meanwhile, goes back to 1997, when the nonprofit was contracted to digitize and help make the data associated with Form 990s more accessible to the public.

During Bill Clinton’s term in office, IRS audits were conducted against individuals and groups who caused problems for the administration. Several prominent conservative groups found themselves facing IRS audits following their criticism of the president and his policies. Among the conservative groups targeted for audits were the Heritage Foundation, the National Rifle Association, Concerned Women of America, Citizens Against Government Waste, National Review, American Spectator, David Horowitz’s Center for the Study of Popular Culture and the Western Journalism Center.

Media interested in interviews about this story should email WND.

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