The IRS is still blocking applications for nearly a dozen tea party groups seeking tax-exempt status, Commissioner John Koskinen told Congress on Wednesday — though he bristled at the organizations’ claims of poor treatment.
Close to two years after the tea party targeting was exposed, Mr. Koskinen said he’s offered those groups a path forward if they would agree to limit their overtly political activity to a lower amount, but the groups have rejected that offer. Some of them have instead chosen to sue the agency to demand approval.
“You can do that, but it’s a little hard to argue there wasn’t a path,” he told the House Appropriations subcommittee that oversees his agency.
Mr. Koskinen said there are “less than 10 or 12” groups still awaiting approval, out of the hundreds that were targeted for special scrutiny.
One group, the Albuquerque Tea Party, has been waiting since 2009. It has provided hundreds of pages of evidence to the IRS over the years, and officials say they have no idea why they still have yet to be approved.
The groups have applied for status under section 501(c)(4) of the tax code, which designates them as social welfare organizations. Groups under that designation can shield their donors, but must abide by rules that prohibit them from making political activities a substantial portion of their work.
Mr. Koskinen’s agency offered groups still awaiting approval a deal that they could get immediate approval if they promised to limit political activity to 40 percent of their budgets. Conservative lawyers, however, argue that the law and regulations suggest groups should be able to spend 49.9 percent of their money on political activity, and so agreeing to the 40-percent level would be ceding some of their rights to the government.
Jay Sekulow, chief council at the American Center for Law and Justice, which represents the Albuquerque Tea Party and at least one other group whose approval is still being blocked by the IRS, said the 40 percent deal wasn’t much of a solution.
“The suggested ‘path’ that the IRS Commissioner suggests was available a couple of years ago was nothing more than an arbitrary standard that the agency unilaterally constructed out of thin air to placate Americans who have been unlawfully and unconstitutionally targeted by the IRS because of their political beliefs,” Mr. Sekulow said.
He said they will continue to pursue their lawsuit against the IRS.
“The IRS remains an agency incapable of self-governance or self-correction. Our federal lawsuit is moving forward,” Mr. Sekulow said.