A Collaboration with the University of Pittsburgh

Federal appeals court orders IRS to produce information in Tea Party lawsuit

[JURIST] The US Court of Appeals for the Sixth Circuit [official website] ruled Tuesday that the Internal Revenue Service (IRS) [official website] must provide information about potentially discriminatory tax-exempt applications given to tea party members. In its decision [opinion, PDF], the court stated that the claims against the IRS were that they used political criteria to specifically round up tax-exempt status applications of tea-party groups, took four times as long to process these applications, and that "the IRS served tea-party applicants with crushing demands for what the Inspector General called "unnecessary information." In particular, the IRS had allegedly begun to pay more attention to 501(c) applications for tax-exempt status from groups with "Tea Party," "Patriot" and "9/12" in their name. The IRS placed these and other institutions those concerned with "government spending, government debt or taxes" and how the country was being run," on a spreadsheet entitled "'Be on the Lookout' listing' and assigned a 'team of specialists' to handle their applications. Once on this list, these groups "'experienced significant delays and requests for unnecessary information[.]" While the IRS contended that this oversight in filing and the application process was the result of a misunderstanding of the law and not based upon some larger political objective, the court held that the IRS would have to release its secret "Be on the Lookout" listing so the court may more accurately decide upon the matter. This release stands against a claim by the IRS that the names on the list were considered "confidential 'return information'" under Section 6103 [text] of the Internal Revenue Code.

The suit was initiated by the NorCal Tea Party Patriots [advocacy website] in 2013 shortly after the alleged targeting was revealed [TaxProfBlog report]. Following the revelation the US Department of Justice (DOJ) [official website] began a two-year investigation into the claims, ending in October. At the close of the investigation the DOJ announced that although their "investigation uncovered substantial evidence of mismanagement, poor judgment, and institutional inertia leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints," mismanagement is not a crime and chose not to pursue criminal charges [USA Today report].

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.