Why Did IRS Ignore Karl Rove’s Tax-Exempt Organizations while Targeting Small Conservative Groups?

Thursday, May 16, 2013
Karl Rove, tax-exempt

While Republicans have railed against the Internal Revenue Service’s (IRS) targeting of small conservative groups with tax-exempt status, liberal critics have wondered why the IRS ignored big-money organizations linked to GOP consultant Karl Rove.


Government watchdog groups spent the past two years filing more than a dozen complaints asking the IRS to investigate large nonprofits like those founded by Rove. They also inquired about pro-Obama groups as well, but in both cases, the IRS never responded to the requests.


Instead, IRS officials focused on local Tea Party organizations that spent little or no money on the 2012 election.


Contrast that with the $250 million spent by 501(c)(4) “social welfare” groups like Rove’s Crossroads GPS, the Koch brothers’ Americans for Prosperity and Grover Norquist’s Americans for Tax Reform, all of which don’t have to disclose their donors under federal law.


“We’ve complained about a few big fish and we’ve heard nothing from the IRS.,” Paul S. Ryan, senior counsel at the Campaign Legal Center, which filed many of the complaints with the IRS, told The New York Times. “We would far rather see scrutiny of these big fish—the groups that spent hundreds of millions of dollars to influence elections—than to see the resources spent on hundreds of small groups that appeared to spend very little on elections.”


The reason that the IRS has instead pursued the small outfits is because many don’t have legal counsel and therefore make for an easier target, Chris Ashby, a lawyer to conservative groups, told the Times. “The big groups are generally well-advised, lawyered up,” he said. “Their tax forms are artfully drawn.”


Compounding problems at the IRS is that the agency is understaffed (dropping from 910 employees in 2009 to 876 in 2012) and is overwhelmed by a greater number of tax-exempt applications to process (increasing from 1,741 in 2010 to 2,774 in 2012).

-Noel Brinkerhoff, Danny Biederman


To Learn More:

Inappropriate Criteria were used to Identify Tax-Exempt Applications for Review (Treasury Inspector General for Tax Administration) (pdf)

Uneven I.R.S. Scrutiny Seen in Political Spending by Big Tax-Exempt Groups (by Nicholas Confessore, New York Times)

IRS Fallout: The Real Scandal Is Secret Money Influencing US Elections (by Ari Berman, The Nation)

IRS Nonprofit Division Overloaded, Understaffed (by Dave Levinthal, Center for Public Integrity)

The Real Scandal: Official Washington Goes Nuts Over IRS Doing Its Job (by Steven Rosenfeld, AlterNet)

IRS Clashes with Conservative Campaign Groups Claiming Non-Profit Status (by David Wallechinsky, AllGov)

Two Campaign Groups with Anonymous Donors Outspend all Super PACs Combined (by Noel Brinkerhoff, AllGov)

IRS Balks at Investigating Tax-Exempt Organizations Accused of Violating Tax Laws (by Noel Brinkerhoff, AllGov)


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