Nonprofits Question IRS Probes

Nonprofit Groups Question Motive for Federal Actions (NYT | rss)

The National Association for the Advancement of Colored People is locked in a standoff with the Internal Revenue Service, preferring to risk its tax exemption rather than hand over documents for an I.R.S. review that the civil rights group contends is politically motivated. While it is rare for an organization to defy the I.R.S. openly, the N.A.A.C.P. is not the only group that believes it is being made a government target for its positions on issues. Roughly a dozen nonprofit organizations have publicly contended that government agencies and Congressional offices have used reviews, audits, investigations, law enforcement actions and the threat of a loss of federal money to discourage them from activities and advocacy that in any way challenge government policies, and nonprofit leaders say more are complaining quietly. “In previous administrations, there’s been the occasional instance of what might appear to be retaliation, but when it started happening in a serial way, it began to look like a pattern to us,” said Kay Guinane, counsel for the nonprofit advocacy project of OMB Watch, a government watchdog group that has published two reports on the issue.

Government agencies, which are under increasing financial pressure themselves, say they are merely enforcing rules on use of public money and nonprofit assets. Federal law prohibits organizations from using government financing for lobbying purposes, and tax law limits the use of charitable assets in general for lobbying. “In the 1990’s and early 2000’s, some of our grantees hadn’t been reviewed, hadn’t had a site visit in some time,” said Kathy Harben, a spokeswoman for the Centers for Disease Control and Prevention. “In October 2002, the financial management office renewed its commitment to reviewing funded programs through regular site visits.”

Gauging whether liberal groups are being singled out for review more than conservative ones is almost impossible to determine because audits, investigations and threats are rarely made public. Liz Towne, director of advocacy programs for the Alliance for Justice, a group that educates charities about how to avoid running afoul of tax laws that restrict their ability to lobby, said, “When we talked to the brain trust of lawyers who represent nonprofits around the country, they were saying, ‘Well, I don’t know if we see a pattern that goes beyond the usual kinds of complaints and investigations.’ “But, she added, the group sensed a “higher level of attention to nonprofits and their activities and that people are getting more sophisticated in how to get nonprofits to back off their message.”

To the extent that the IRS is targetting groups on a particular side of the ideological spectrum while ignoring those with similar profiles on the opposite side of the spectrum, this is obviously problematic. That said, groups who lobby government, involve themselves in electioneering, and otherwise engage in the political process are clearly not entitled to claim tax exempt status. Why the NAACP (or the NRA or Christian Coalition or similar group on the Right) should enjoy the same status as the Kiwanis Club is unclear. The taxpayer shouldn’t have to subsidize lobbying groups.

James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Fersboo says:

    Mr. Joyner wrote:
    ‘To the extent that the IRS is targetting groups on a particular side of the ideological spectrum while ignoring those with similar profiles on the opposite side of the spectrum, this is obviously problematic. ‘

    I am not sure where you inferred your assumption that the IRS is targetting a particular side. Given that it is the NYT report, I would be willing to wager that groups have been evenly targetted for investigation.
    I have seen the following reported elsewhere; from the article (3 paragraph from bottom of article):

    ‘Last month, the inspector general concluded that political considerations had no role in the I.R.S.’s selection of an organization for review. Of 40 cases studied by the inspector general, 18 were characterized as involving “pro-Republican” organizations, 12 “pro-Democratic” and one “pro-Green.” The inspector general was unable to determine the affiliation of the other nine. The inspector general also looked at 20 cases the I.R.S. declined to review and found 8 were “pro-Republican” and 4 “pro-Democratic.” ‘

    If we give the 9 ‘unknowns’ to the Democrats, their total is 22 (12+1+9) versus 18 Republican; pretty even if you ask me.

  2. James Joyner says:

    That the investigations are ideologically motivated is the charge at the heart of the piece. As the piece and my excerpt make clear, though, it’s rather hard to tell whether that’s the fact. Thus, “to the extent that….”

  3. bryan says:

    It is more than slightly advantageous to the NAACP to make the insinuation that this is politically motivated, given the current resident of the White HOuse and the troubling questions within their own ranks in recent years.

  4. James Joyner says:

    Bryan: No doubt. The question, I guess, is is the IRS going after similar groups on the Right with equal vigor. I don’t know from reading the article.

  5. McGehee says:

    Well, there were certainly a lot of complaints that groups on the right were being targeted disproportionately, back during the last eight years or so of the last millennium…