A Tea Party group that filed a lawsuit against the Internal Revenue Service just six days after the conservative targeting scandal emerged in 2013 won a major victory this week when a federal judge allowed the case to proceed and automatically included hundreds of conservative groups that may have been victims of the tax agency’s discriminatory practices.
NorCal Tea Party Patriots, a California-based conservative group, was the first to file suit against the IRS. Its case is now the only remaining lawsuit pending against the IRS in the targeting scandal that rocked the agency in spring 2013.
Edward Greim, the attorney representing the plaintiffs in the lawsuit, said a judge’s decision Tuesday to grant the lawsuit class action status was a major milestone in the years-long legal battle over the IRS scandal.
“It means that now, every group that meets the class definition is represented in this case unless they opt out,” Greim told the Washington Examiner, noting the case could thus include “every group that was selected by the IRS for additional scrutiny, harassment and delay” when applying for tax-exempt status before May 2013.
Greim said the case focused on whether IRS officials inappropriately used four criteria from a controversial “Be On the Look-Out,” or “BOLO” list, to screen certain groups for extra scrutiny during the application process at the IRS’ tax-exempt office in Cincinnati.
He said those criteria included: “a reference in the case file to ‘Tea Party,’ ‘Patriots,’ or ‘9/12 Project;'” “a reference in the case file to government spending, government debt, or taxes;” “a reference in the case file to education of the public by advocacy or lobbying to ‘make America a better place to live;'” and “a statement in the case file criticizing how the country is being run.”
Nonprofit applications that included those phrases were often delayed and scrutinized, the plaintiffs alleged.
Greim said the lawsuit also focused on whether IRS officials violated a statute known as “Section 6103,” which protects taxpayers’ personal information from unauthorized disclosure.
But Greim noted the IRS, which has resisted the lawsuit at every step, attempted to halt the case by arguing the same statute NorCal Tea Party Patriots was suing under actually kept the agency from disclosing information in the case.
“They have fought us tooth and nail every step of the way so far,” Greim said.
While the initial lawsuit listed individual IRS employees, including Lois Lerner, former head of the tax-exempt unit, as defendants in the case, the IRS itself is now the only defendant in the case.
That means any damages awarded in the case would be paid by the IRS, not by the individuals who allegedly targeted Tea Party groups.
Greim laid out a scenario from several years ago for which, if proven true in court, the IRS could face legal trouble.
“You’re worried that conservative groups are trying to expand their rights under the law and you don’t want to let them use the application process to do that, so you decide to delay their applications,” he said, noting that explanation stops short of outright political bias but would still constitute unlawful behavior.
NorCal Tea Party Patriots brought the suit to U.S. District Court in Cincinnati because the tax agency’s non-profit arm is based in the Ohio city.
The original allegations against the IRS centered on whether officials used inappropriate criteria to delay the process of granting tax-exempt status to Tea Party groups applying to register as nonprofits for the first time.
However, a review in July of last year indicated loopholes in IRS policies could still allow the agency to discriminate against certain tax-exempt groups based on their “religious, educational, political or other views” when selecting nonprofits for audits.
Soon after, the House Ways and Means Committee noted up to a third of cases the IRS selected for audit were dismissed without any documentation, suggesting agency officials could have offered special treatment to certain groups by calling off a planned audit.
Lawmakers and conservative activists expressed disappointment in October of last year when the Department of Justice closed its criminal investigation of the IRS without filing any charges.
