A federal court ruled Friday that the Internal Revenue Service has not yet demonstrated that officials stopped targeting Tea Party groups in a decision that excoriated the tax agency for its "discriminatory" treatment of conservative organizations.
"This is a blistering rebuke to the IRS and its defenders," Walter Olson, senior fellow at the Cato Institute Center for Constitutional Studies, said of the court's ruling. "It takes on squarely the defense the IRS had raised in this case which is, 'Whatever happened, we promise not to do it again.'"
"The court goes through and systematically takes that apart in a way that's very damaging to the IRS's overall defense," he added.
The D.C. Circuit Court of Appeals, often considered the second most powerful court in the country, reversed two decisions made by lower courts to dismiss lawsuits against the IRS for the targeting of two conservative groups, Linchpins of Liberty and True the Vote.
In reviewing whether to support the tax agency's claim that the targeting practices had ended, the court noted "it is absurd to suggest that the effect of the IRS's unlawful conduct ... has been eradicated" when the two conservative groups in question still had their delayed applications pending before the IRS.
The IRS had argued before lower courts in two separate lawsuits that the cases should be thrown out because officials had taken steps to end the "unequal" handling of Tea Party groups' applications for tax-exempt status.
But the circuit court stated repeatedly in the 22-page ruling that the IRS's actions "continue to affect" groups that still have not received a decision on their applications to become nonprofits.
The tax agency did succeed in persuading the three-judge panel that no individual IRS employees should be held legally accountable for the conduct that landed the agency before the court. IRS officials did not unlawfully disclose taxpayer information, the panel concluded.
Beyond the politically motivated delays imposed by the tax agency, the court focused on the intrusive questions asked of Tea Party applicants, such as demands that such groups provide "Internet passwords and user names, copies of social media and other Internet postings and even the political and charitable activities of family members."