WASHINGTON—The Albuquerque Tea Party (ATP) filed for tax-exempt status as a 501(c)4 in December 2009. As of July 2014, the group still has no idea when—or if—the Internal Revenue Service will respond.
Rick Harbaugh, the secretary and former president of ATP, said his group has been acting like a 501(c)4 for nearly five years. ATP has never endorsed a candidate, and its activities fall well below the requirement for 49 percent political involvement. The group has even put aside funds in case the IRS doesn’t grant its status and asks it to pay five years of back taxes.
“You get to the point where you are a little paranoid,” Harbaugh said.
Lawyers and government analysts told representatives on the House Oversight Committee Wednesday they need to overhaul the IRS so it won’t target certain groups in the future.
“I think the application process is completely broken,” said Cleta Mitchell, a lawyer who represents a few of the many IRS-targeted tea party groups. “It is Humpty Dumpty, it is off the wall, and it can’t be put back together again.”
While another Wednesday hearing discussed the need for a special counsel to further investigate the IRS, representatives of the Oversight Committee considered how to keep the agency from policing tax-exempt groups based on their agendas. Since at least 2010, the IRS has targeted hundreds of conservative and a handful of progressive groups. The agency required many applicants, including Harbaugh’s ATP, to turn over lists of their every activity—after a long wait.
“We must get politics out of the IRS,” said Rep. Darrell Issa, R-Calif. “Reform will not be accomplished overnight, … but this is a process we must start today.”
While congressional Democrats also denounced IRS policy, they emphasized that the IRS targeted progressive groups, too. Rep. Robin Kelly, D-N.Y., asked Heritage Foundation fellow James Sherk a list of questions about IRS discrimination against progressive groups when Sherk came only to testify about civil service job reform.
Panelists agreed the IRS targeted some progressive groups, but the agency’s approach to conservative groups was markedly strict. While the words “progressive” and “tea party” both went on the agency’s “Be on the Lookout” list, according to a 2013 Inspector General report, the IRS instructed employees to send only conservative applicants to a separate unit of the agency. As a result, many conservative and tea party groups folded up or could not act as they wanted.
“This is not really a conservative or a liberal issue,” said Rep. Rob Woodall, R-Ga. “[It’s] free speech.”
Panelists recommended Congress reform civil service laws, make the IRS independent from the White House, and drop 501(c)4 registration requirements since contributions to these groups are not tax exempt.
Mitchell offered the strongest reform suggestion, calling for the end of the income tax and the IRS: “I believe that the IRS is such a corrupt and rotten and broken agency that it cannot be salvaged.”
Every year on tax day, Harbaugh and his tea party group gather on an Albuquerque sidewalk to protest the IRS. Meanwhile, the group is suing the U.S. attorney general and the IRS, along with more than 20 other tea party groups and the American Center for Law and Justice. Harbaugh told me ATP has not heard about its tax-exempt status since refusing an IRS request to reduce its political activity percentage 10 points below the legally mandated 49 percent.
Harbaugh hopes the government will keep pressing the IRS until the entire truth comes out: “They’re trying to limit us beyond what the law says. … I’d just like to know when they’re going to resolve this.”