South Florida group got IRS scrutiny

 

Tribune Washington Bureau

When the South Florida Tea Party applied last year for tax-exempt status as a nonprofit group, the IRS demands were probing and relentless:

Provide copies of all 7,000 Web pages. All blog posts, newsletters, bulletins, fliers and handbills. Provide copies of the agendas and minutes of board meetings and résumés of each board member. The percentage of time spent on activities, sources of money …

Faced with round after round of such questions, the group abandoned its attempt, disbanded and reinvented itself under the name National Liberty Federation.

“It was a nightmare. We basically just gave up on it,” said Everett Wilkinson, chairman of the group based in Palm Beach Gardens. “Whatever they could do to send you around in circles, they would. A lot of other [tea-party] groups just closed their doors or changed their status to for-profit — or just didn’t file anything.”

This kind of special scrutiny — singling out groups that had words such as “tea party,” “patriot” or “9/12” in their names — was termed “intolerable and inexcusable behavior” by President Barack Obama and has prompted Congress and the Justice Department to launch investigations into Internal Revenue Service practices.

The emerging scandal also has given the tea party, a political movement that lost momentum in the 2012 election and seemed to be fading, a kind of vindication and rallying point. It touched groups in Florida, even those not seeking a special tax status.

“It scared me to death,” said Keith Wilson, founder of DeLand 9/12, which decided not to seek nonprofit tax status.

“I was afraid to do anything after what they were doing to the other groups,” Wilson said. “We wanted to take some donations and put up some billboards and advertising. I decided that wasn’t a good route to go. I just basically paid for everything out of my pocket.

“No one wants problems from the IRS.”

Wilson traveled to Washington on Wednesday to huddle with other tea-party leaders and with U.S. Rep. Michele Bachmann, R-Minn., founder of the congressional Tea Party Caucus. They plan to share their stories, hold a news conference Thursday and assist congressional inquiries.

The disclosures reinforced conspiracy theories that the government encroaches on the liberties of its citizens, a major theme of the tea-party movement.

One of its main allies in Congress, U.S. Sen. Marco Rubio, R-Fla., introduced legislation this week that would impose criminal penalties on IRS workers who violate the constitutional rights of citizens. Rubio also turned the cause into a fundraiser for his Reclaim America Political Action Committee.

“A line has been crossed by our federal government that should send a chill down the spine of every freedom-loving citizen of this nation,” he told prospective donors. “With this issue, the very message of the tea-party movement has been validated.”

Most tea-party groups are small, loosely organized and built around a website, while also holding occasional rallies. Few generate enough donations to warrant seeking special tax status. But even some of the smaller groups felt a chill.

“It’s a hassle, and you feel like you’re being harassed. But then, any interaction with the IRS makes you feel harassed,” said Peter Lee, director the East Side Tea Party in Orlando, who did not file for tax-exempt status but knows others in the movement who did.

“Whether it’s a top-down order or from lower ranks, it doesn’t matter. You give an organization [IRS] this kind of power, and you are going to have political agendas across the board,” Lee said. “There are so many things to be concerned about right now. This is one more log on the fire.”

Like other nonprofit advocacy groups, conservative organizations can apply for tax-exempt status as 501(c)4 “educational” groups if they promote causes and take stands on issues but aren’t “primarily” political in nature. Winning such status means the groups don’t have to pay federal income taxes or identify their donors.

Campaign-watchdog groups and many members of Congress favor tighter rules to restrain the role of money in politics, including limits on tax-exempt groups of all kinds that try to influence elections. All sides agree, however, that groups should not be discriminated against because of a point of view, signaled by certain words in their names.

An inspector general’s review of suspicious IRS practices found that every application for tax-exempt status with “tea party,” “9/12” or “patriot” in the name was flagged for special scrutiny, starting in May 2010. It added, however, that two-thirds of flagged applications did not have those words in the name, and almost 70 percent did raise legitimate concerns about excessive campaign activity.

Flagged applications were often delayed for months, though none of the 298 applications that were scrutinized were actually rejected. And more than half of the organizations that had to provide additional information were asked for material that wasn’t necessary to evaluate their applications, the review found.

“They hit you with questions that practically come down to what you had for dinner the other night,” said Wilkinson, chairman of the former South Florida Tea Party. “We ended up saying, ‘Forget it.’ We closed that organization down because of it.”

He’s thinking of applying next week under his new group, the National Liberty Federation, adding with a rueful chuckle: “I imagine that with all the attention on this issue, we won’t have a problem.”

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