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Court: IRS dragging its feet on tea party case

Posted: 10:05 PM, Mar 24, 2016
Updated: 2016-03-25 07:32:55Z

CINCINNATI -- The Internal Revenue Service has been dragging its feet and making excuses on why the agency shouldn't have to turn over records related to its targeting of conservative-leaning organizations, the U.S. Sixth Circuit Court of Appeals found this week.

Tea party groups and the IRS have been in a years-long battle over their applications for tax-exempt status. A Treasury Department Inspector General's probe concluded that, starting in 2010, lax management enabled Cincinnati agents to improperly target the groups for extra scrutiny; because of that, their applications took as much as four times longer than other, similar applications, and the groups were served with "crushing demands for what the Inspector General called 'unnecessary information,'" U.S. Circuit Judge Raymond Kethledge wrote Tuesday.

At question in this week's opinion from the Sixth Circuit was an effort by NorCal Tea Party Patriots, lead plaintiff in a lawsuit against the IRS, to find other groups who also might've been unfairly targeted, so that their lawsuit against the agency can be certified for class-action status.

But that's been challenging, their attorneys and the court found, because the IRS won't hand over its "Be On the Lookout" lists of organizations allegedly scrutinized for their political beliefs, or two spreadsheets the agency turned over to the Inspector General for his report.

The U.S. District Court ordered the IRS to turn over the lists, even rejecting a motion from the IRS to reconsider; but, more than a year later, the IRS still hasn't complied, Kethledge wrote.

The agency appealed to the Sixth Circuit, essentially arguing the district court hadn't done its job.

Kethledge and two other judges disagreed.

IRS officials tried to argue the lists shouldn't be turned over because they have confidential taxpayer information; the appeals court found applications for nonprofit status explicitly state that, if the application is approved, it becomes publicly available.

As for the names of people whose applications the IRS denied -- or ones from people who withdrew them because of the lengthy delays -- the Sixth Circuit found they shouldn't be considered confidential "return information" because the names were including in an application for nonprofit status, not on a tax return.

In his opinion, Kethledge blasted the U.S. Justice Department, whose attorneys represent the IRS in the case.

"The lawyers in the Department of Justice have a long and storied tradition of defending the nation's interests and enforcing its laws... The conduct of the IRS's attorneys in the district court falls outside that tradition," Kethledge wrote.