Conservative groups targeted by the IRS reject the agency’s new expedited review process
The law firm representing dozens of conservative groups targeted by the Internal Revenue Service announced Wednesday that its clients are rejecting the IRS’s new expedited review process for 501(c)(4) applications.
The American Center for Law and Justice (ACLJ) — which has filed a federal lawsuit on behalf of 41 conservative groups targeted by the IRS — said its clients are rejecting the new process because it applies a standard that would require that groups spend at least 60 percent of their time and resources on social welfare promotion and no more than 40 percent on political activities.
Seven of ACLJ’s clients rejected the process even though they would have qualified for expedited review and already have had applications pending for more than 645 days. One group has an application pending for 1,297 days.
According to ACLJ chief counsel Jay Sekulow, the 60/40 standard the IRS would apply to expedite the applications is “deeply flawed” and not rooted in statutes or regulations.
In a letter to the Department of Justice in response to a notice about the “expedited process for recognition of exemption” Wednesday, Sekulow called the 60/40 standard “merely safe harbor provisions the IRS has crafted in response to the problems that have been created by its own admitted misconduct.”
“We have been instructed by our clients to reject the IRS’s offer for expedited review on the basis you have proposed,” Sekulow wrote. “Respectfully, because these seven clients have been awaiting determination for years and have complied with all legitimate requests for additional information, we request that the IRS complete its review of their application and make a final determination immediately.”
The IRS announced last month that it would offer an optional, faster option for the 501(c)(4) process with the 60/40 standard, as a way to reduce the application backlog.
“The IRS is committed to improving our tax-exempt review process,” IRS Principal Deputy Commissioner Danny Werfel said in a statement. “This new streamlined option gives certain groups that have waited far too long a quick and clear path to get their status resolved.”
The seven organizations that rejected the expedited process are the Greater Phoenix Tea Party Patriots in Arizona, the Allen Area Patriots in Texas, the Laurens County Tea Party in South Carolina, the North East Tarrant Tea Party in Texas, the Myrtle Beach Tea Party in South Carolina, the Albuquerque Tea Party in New Mexico, and the Acadiana Patriots in Louisiana.
Of the 41 groups the ACLJ represents, 19 received tax-exempt status after long delays, 17 are still pending, and 5 withdrew their applications out of frustration. According to an ACLJ spokesman the IRS’ criteria for expedited review of 501 (c)(4) applications only applied to the seven groups that rejected the offer.