August 6, 2016; CNN
Readers of this newswire should also see today’s feature article to get a fuller picture of the direction of the IRS Exempt Organizations Unit.
The IRS scandal goes on and on and on, with most of the recent events happening in courtrooms and on the websites of conservative nonprofits like Cause of Action and Judicial Watch. True the Vote, a nonprofit organization that has been seeking 501(c)(4) recognition from the IRS since 2010, sued the agency for inaction on its application and asking for information about the approval process.
In a unanimous decision on Friday, the U.S. Court of Appeals for the D.C. Circuit reversed a federal district court’s 2014 ruling dismissing True the Vote’s suit against the IRS, deciding to “vacate and remand for further proceedings with respect to the equitable clams of the plaintiff-appellants.” In short, the IRS will have to defend itself in federal court after all, including participation in depositions and evidence discovery. According to the Wall Street Journal’s Law Blog:
Chapman University law professor John Eastman, a lead attorney for True the Vote, said they intend to conduct a “comprehensive and systematic” discovery search of archived email communications among IRS officials to see if there was “improper communications about tax return inform to other agencies.”
Two key facts are raised in the news reporting on the case. First, the IRS has committed “unconstitutional acts against at least a portion of the plaintiffs,” such as “be on the lookout” (BOLO) lists with guidelines for singling out certain applications for extended delay and special scrutiny. Second, the IRS could not prove that it had ceased the practice, for two reasons cited by the court. Not only did the IRS merely “suspend” use of the BOLO guidelines instead of cease their use, the judges wrote, “It is absurd to suggest that the effect of the IRS’s unlawful conduct, which delayed the processing of appellant-plaintiffs’ applications, has been eradicated when two of the appellant-plaintiffs’ applications remain pending.”
In its ruling, the appeals court sided with the IRS when it said that no action should be taken against individual IRS employees involved in the targeting scandal.
Some believe the scandal was a result of political animus against conservative-sounding nonprofit groups. Others agree with the U.S. Justice Department probe, which concluded there was “substantial evidence of mismanagement, poor judgment and institutional inertia leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime.” Regardless, the investigations, FOIA requests, Congressional action, and lawsuits continue to take up a lot of time and money at the IRS division that oversees nonprofit organizations.—Michael Wyland