House Republicans are weighing a major expansion of their investigation into the Internal Revenue Service’s targeting of conservatives by looking into the audits of nonprofit groups, potentially opening another front in the scandal.
Several leaders of 501(c)(3) groups find it fishy that they were audited by the IRS about the same time the agency increased scrutiny of applications from tea party and conservative groups seeking tax-exempt status.
Morton C. Blackwell, president of the Virginia-based Leadership Institute, said the audits had a chilling effect as the fear of triggering additional, time-consuming scrutiny prevented groups from participating in otherwise permissible activities during the hotly contested 2012 presidential election cycle.
“I know of many other conservative nonprofit organizations who were audited during this period, but who wish not to reveal their identities for fear of hurting their fundraising while donors lose confidence in the tax deductibility of their donations, or for fear of inviting further, extremely expensive, IRS scrutiny,” said Mr. Blackwell, a Republican National Committee member from Virginia.
The Billy Graham Evangelistic Association, the Clare Boothe Luce Policy Institute and the Family Research Council say they faced IRS audits over the past two years, each of them for the first time.
Rep. Jim Jordan, Ohio Republican and member of the House Committee on Oversight and Government Reform, said Mr. Blackwell’s complaint is compelling.
“When you see the systematic targeting that was done with groups applying for tax-exempt status, it is not too much of a stretch to think maybe we’d better look and see if the IRS was also targeting groups that already had tax-exempt status, via the audit process,” Mr. Jordan said. “We are beginning to look into that — nothing official yet.”
Frederick Hill, spokesman for Rep. Darrell E. Issa, California Republican and chairman of the oversight committee, said the panel is exploring complaints from “numerous conservative nonprofits.”
“Tea party groups were the first to raise the alarm about inappropriate IRS scrutiny of applicants, and the committee is taking these reports about bias against groups that had already received exempt status very seriously,” Mr. Hill told The Washington Times.
The Times also reported that government employees improperly accessed IRS information to look at data on selected political candidates and donors, including former Republican Senate candidate Christine O’Donnell of Delaware.
When the IRS scandal broke in May, Franklin Graham, president of the Billy Graham Evangelical Association, said in a letter to President Obama that “profiling by the IRS was not limited to conservative political organizations; indeed, it extended to religious charities — Jewish and Christian — as well.”
Mr. Graham said his group was audited after it ran full-page ads in 2012 in support of a state constitutional amendment banning same-sex marriage in North Carolina, and pro-Israel candidates. Months later, the IRS notified his organization about an audit for the 2010 tax year.
“I am bringing this to your attention because I believe that someone in the Administration was targeting and attempting to intimidate us,” Mr. Franklin said in his letter to Mr. Obama. “This is morally wrong and unethical — indeed some would call it ‘un-American.’”
Todd Shearer, a spokesman for the Billy Graham Evangelistic Association, said Mr. Obama never responded to the letter.
Michelle Easton, president of the Clare Boothe Luce Policy Institute, said her group was unfairly targeted.
“I can only conclude that our mission of preparing and promoting conservative women leaders must have been seen as a threat to this administration,” Ms. Easton said. “This audit ensured we were occupied by government agents and diverted from our mission of helping young women.”
This time, the IRS focused on the 2008 tax year. The audit began in the summer of 2011 and ended more than a year later.
Mr. Blackwell said his group paid $50,000 in attorney fees and provided more than 23,000 pages of documents in order to comply with the audit.
Last week, an IRS employee told Congress that Lois Lerner, the former head of the Exempt Organizations Division, demanded that he send some of the reviews of tea party groups to the IRS chief counsel’s office in Washington. The chief counsel is one of two political appointees in the IRS.
Mr. George also rejected Democratic efforts to portray his investigation as partisan, saying IRS officials withheld key information about a lookout list for some liberal groups until last week. Mr. George’s numbers indicate that far more of the 298 political groups seeking tax-exempt status during the 2010 and 2012 elections singled out for intrusive scrutiny had “tea party” or other conservative labels in their names. None of the cases used “occupy” in the name, while just seven had “progress” or “progressive.”