Skip to comments.GOP-Leaning 503(c)(4) Sues IRS (and Lois Lerner)
Posted on 04/29/2014 6:56:05 AM PDT by smoothsailing
Courthouse News Service
Tuesday, April 29, 2014 Last Update: 8:42 AM PT
DALLAS (CN) - The Internal Revenue Service engaged in "intentional and systematic" targeting of conservative groups seeking tax-exempt status, the Republican-affiliated Freedom Path Inc. claims in court.
Dallas-based Freedom Path sued the IRS and Lois G. Lerner, the former director of the agency's Exempt Organizations Division, in Federal Court.
Freedom Path claims its application for 503 (c)(4) tax-exempt status faced "additional and unconstitutional scrutiny" based on its policy positions.
As a 501 (c)(4) "issue advocacy" group, Freedom Path can raise unlimited amounts of tax-exempt and need not disclose its donors. It has ties to the Republican Senatorial Committee, former Nevada Senator John Ensign and Utah Senator Orrin Hatch and their staff members or former staffers, according to factcheck.org.
The lawsuit states: "Through an illegal scheme hatched and carried out by Internal Revenue Service officials acting under color of federal authority, a group of IRS employees pulled applications from conservative ideological organizations based upon their conservative names or policy positions, delayed processing those applications, and then made probing and unconstitutional requests for additional information.
"The request for additional information received by plaintiff in February 2012, for example, attempted to force plaintiff to disclose the names of its donors and asked multiple other questions that a Treasury Inspector General for Tax Administration [TIGTA] report determined to be unnecessary to plaintiff's determination of tax-exempt status."
As early as February 2010, the IRS began identifying for scrutiny tax-exempt applications from groups with the names including terms such as "Tea Party" and "Patriots," the complaint states.
Freedom Works claims that a year later, the criteria expanded to target organizations with policy positions focused on government spending and constitutional education, among other things.
TIGTA concluded that the IRS' criteria "gives the appearance that the IRS is not impartial in conducting its mission" and that it focuses too narrowly on the names and policy positions of organizations instead of tax-exempt laws and Treasury regulations, according to the lawsuit.
The IRS later acknowledged targeting conservative groups for higher scrutiny, the complaint states, resulting in outrage from some in Congress and the public.
"Following the onslaught of this congressional and media attention, defendant Lerner finally halted the issuance of further letters requesting additional information until new guidelines were developed and provided to those officials processing the applications of these conservative nonprofits," the complaint states. "Defendant Lerner did not, however, take any action at that time to ensure that the letter previously sent to plaintiff, which contained unconstitutional and inappropriately intrusive information, was retracted."
Freedom Path claims that being targeted has dramatically affected it, resulting in lost donor support, use of resources to respond to the IRS' information requests and use of "considerable funds" on legal fees and public relations.
Freedom Path claims the IRS illegally released its application to ProPublica, a New York-based investigative news organization.
It claims that ProPublica published the information with an article "suggesting that plaintiff had engaged in illegal activities and/or misstated its activities on tax documents."
The article was reposted on other media outlets, including The Washington Post and The Salt Lake Tribune, the complaint states.
"Such suggestions are unfounded, but they are also the predictable result of news organizations being provided only a portion of the confidential tax return information that plaintiff provided to the IRS during the application process," the complaint states."
Freedom Path claims the IRS used an unconstitutional "facts and circumstances" test to evaluate its activities. It says the test violates the U.S. Supreme Court's "clear guidelines" on issue advocacy and campaign speech.
"The twenty plus factors that the IRS considers when attempting to apply its 'facts and circumstances' test are grossly indeterminate, and their application grossly imprecise, so that the IRS is more or less free to come to any conclusions it wishes with respect to a particular public communication," the complaint states. "As such, the IRS's 'facts and circumstances' test poses a severe restriction on speech that does not withstand constitutional scrutiny."
IRS spokesman Clay Sanford declined to comment on the lawsuit Monday afternoon.
Freedom Path seeks damages for violations of the First and Fifth Amendment and violations of the Administrative Procedure Act and Internal Revenue Service Code. It also seeks an injunction against use of the "facts and circumstances" test.
It is represented by Orrin Harrison with Gruber Hurst in Dallas and Chris Gober with Gober Hilgers in Austin.
This needs to be a class-action lawsuit.
I wonder how hard it is to change the name of your 503 (c)(4) organization. If it’s not that hard then I suggest that Tea Party type groups should apply with names like “Progressive Marxist Democrat Candidate Support Group (PMDCSG)”. That should work like a charm. They will fly through the approval process.
Discovery ? Could be interesting!
They have to beat her motion to dismiss...if they do that, look out...
to show what a bad candidate Mitt was, he know WHO leaked his irs files to media - yet he has not filed a lawsuit to repair damage or to make government more accountantable.
Mmmmm......thanks for the heads-up——v-e-r-r-r-y interesting.
Newsmax reported: the similarities between questions asked of True the Vote by Rep Cummings staffers and IRS officials at separate junctures strongly suggested inappropriate coordination between Cummings and the IRS.
Engelbrecht demands Cummings and Lerner be held accountable, but said the issue goes far beyond these two. No question---the Cummings/ IRS paper trail of demeaning and subjugating conservatives leads straight to the WH criminals.
CRIMINAL WH PREMEDITATION Giddy w/ success at winning the WH, the malevolent Chicago criminals had big plans---they started making ominous threats from the getgo.
ALL OF THIS NEEDS TO GO VIRAL One of the Articles of Impeachment drawn up against Richard Nixon was merely "threatening" to use the Internal Revenue Service to selectively audit political opponents.
OBAMA HAS WEAPONIZED THE IRS AGAINST POLITICAL OPPONENTS ordering multiple covert campaigns of intimidation, threats, and persecution of tea party/conservative organizations, and those daring to criticize Obama's agenda.
<><> Seven lock-stepping Democrats scared-***tless of losing their seats ask the IRS to Investigate political opponents,
<><> Rep Elijah Cummings led the Democrat pack in smearing True the Vote patriot Catherine Englebrecht....
<><> the FBI, ATF, the IRS, and OSHA were sicced on Catherine Englebrecht, as she valiantly tried to improve the US voting system.
<><> Obama said Tea Parties were a "threat to democracy."
<><> The IRS (a tax-funded L/E agency) takes its marching orders from Democrat;
THE LIKELY SUSPECTS----DEMS STOOP TO CONQUEUR
order IRS to act to save their seats by Alexander Bolton, The Hill, 2/13/14
Senate Democrats facing tough elections this year want the IRS to play a more aggressive role in regulating outside groups expected to spend millions of dollars on their races. In the wake of the IRS targeting scandal, the Democrats are publicly prodding the agency instead of lobbying them directly.
Dems are also careful to say the IRS should treat conservative and liberal groups equally, but theyre concerned about an impending tidal wave of attack ads funded by GOP-allied organizations. Much of the funding for those groups is secret, in contrast to the donations lawmakers collect, which must be reported publicly.
One of the most powerful groups is Americans for Prosperity, funded by the billionaire industrialists Charles and David Koch. It has already spent close to $30 million on ads attacking Democrats this election cycle. If theyre claiming the tax relief, the tax benefit to be a nonprofit for social relief or social justice, then thats what they should be doing, said Sen. Mark Begich (D), who faces a competitive race in Alaska. If its to give them cover so they can do political activity, thats abusing the tax code. And either side."
<><><><>Asked if the IRS should play a more active role policing political advocacy by groups that claim to be focused on social welfare, Sen. Jeanne Shaheen (D-N.H.) responded, Absolutely. Both on the left and the right, she said. As taxpayers, we should not be providing a write-off to groups to do political activity, and thats exactly what were doing.
Shaheen called the glut of political spending by self-described social welfare groups that qualify under section 501(c) (4) of the tax code outrageous. Shaheen is in a good position now but could find herself embroiled in a tight campaign if former Sen. Scott Brown (R-Mass) challenges her.<><><><>
Sen. Mark Pryor (Ark.), the most vulnerable Democratic incumbent, said the IRS has jurisdiction over 501(c)(4) groups, as well as charities, which fall under section 5/01(c)(3) of the tax code and sometimes engage in quasi-political activity.
That whole 501(c)(3), 501(c)(4) [issue], those are IRS numbers. It is inherently an internal revenue matter, he said. There are two things you dont want in political money, in the fundraising world and expenditure world. You dont want secret money, and you dont want unlimited money, and thats what we have now. --SNIP-- -
These are all potential defendants. Possession and distribution of IRS documents to unauthorized parties is a serious crime.
Ace lawyer Cleta Mitchell (reps True The Vote) should subpoena every official document filed by Lois Lerner and Elijah Cummings. Every document needs to be scrutinized in conjunction w/ possible connections to IRS terrorism-targeting, orders from Obama, favors from Obama, financial emoluments, govt fraud, etc.
Perjury, forgery, and voter fraud need to be considered. For example: Obama cheerleaders Lerner/Cummings might have coached voters to lie on registration forms, and perhaps falsified candidacy papers.
Falsifying Official Public Documents involves altering, changing, or modifying a document for the purpose of deception.......can also involve forgery and/or passing copies of false documents. Falsifying documents is usually done in connection with broader criminal aims, such as extortion, government fraud, tax evasion, money laundering, financing terrorism........
A person (or persons) can be held criminally liable if they are deliberately acting with the intention of deceiving or defrauding another party.
Falsifying documents is a very serious offense and is generally classified as a felony. This means that a person charged with falsifying documents may be subject to the following legal penalties:
◾Having to pay a monetary fine
◾Incarceration in a prison facility
Depending on the gravity of the offense, as well as individual state laws, falsifying documents can result in a prison sentence of 5-10 years. Also, if government documents or authorities were involved, the legal penalties may be more severe. ..... legal penalties may increase with repeat offenses.
The penalty for falsifying government documents is outlined in the Crimes Act of 1958.
I’m a little confused by the headline. It states 503(c)(4), which I’m not familiar with. Yet in the article they refer to 501(c)(4), which is what these groups are called,IIRC.
Must be sloppy editing.
Not sure a class action is the way to go here.
Better to bankrupt Lerner through having to fight off many smaller suits than one big one.
I’m guessing that, as a senior official, she also had professional liability insurance. That provider’s going to be very interested in settling this quickly ... But I’m guessing there’s a cap on what they’ll be willing to pay.
As well, one might create a group devoted to supporting progressive candidates and name it “American Patriotic Candidates Support League” and throw a few very small donations in for leftists. Not much, but enough to establish a pattern of support for progressives. See if the IRS picks up on the keyword “Patriotic” and sidetracks the application.
The problem is that the various plaintiffs who have been denied their civil rights by the IRS and this regime don’t have the resources individually to take on the federal government. That’s what they count on. A class action is made for such circumstances, to aggregate all the claims in one action to reduce the expense per litigant. It may not be possible, if the individual claims are different enough to have to be litigated separately. But it would be worth looking into.
geez, you seem to miss “a point” in course of legal actions freedom of information requests or discover might open more windows. Take a look at the e-mails that just got released they came from Judical Watch who got what Issa has not gotten.