First lawsuit filed against IRS

First lawsuit filed against IRS
Tuesday, May 21, 2013 - 10:44am

(CNN) -- A Northern California tea party group filed the first lawsuit against the U.S. government stemming from the Internal Revenue Service targeting of conservative groups for more scrutiny as they applied for tax-exempt status.

"The IRS and its agents singled out groups like NorCal Tea Party Patriots for intensive and intrusive scrutiny, probing their members' associates, speech, activities and beliefs," the suit claimed on Monday.

"NorCal and its members suffered years of delay and expense while awaiting the exemption and spending valuable time and money answering the IRS' questions. The result was a muffling and muzzling of free expression" the lawsuit claimed.

The group alleged violations under the Privacy Act as well as violations of its constitutional rights guaranteeing free expression and equal protection under the law.

It is asking for unspecified damages and named the IRS, Treasury Department and unnamed current and former IRS employees.

NorCal Tea Party Patriots first applied for the tax-exempt status in March of 2010 but it took more than two years to receive it.

The inspector general for the IRS found this month the agency developed and followed a faulty policy to determine whether applicants for tax-exempt status were engaged in political activities, which would disqualify them from receiving tax-exempt status.

The inspector general confirmed that agents from 2010 through early 2012 used inappropriate words, such as "tea party" and "patriots," and other criteria off and on to single out applications for more examination.

The watchdog who conducted the audit, J. Russell George, found the criteria resulted in substantial delays and the request of unnecessary information from the groups.

The lawsuit alleged that the "IRS engaged in a tactic of suffocating NorCal Tea Party Patriots and other similarly situated groups with requests that were so searching and extensive that they would have presented a serious challenge even for sophisticated businesses."

Group officials said the IRS asked for a wide variety of information. This included a list of all events and activities conducted since July 2010 and information about their website; Internet related activities; materials they distributed; information about their board of directors and the names of donors, contributors and grantors.

They were also asked if they conducted or would conduct rallies or exhibitions for or against public policies, legislation, public officers, political candidates, the officials said.

Mark Meckler, president of a Tea Party-aligned group Citizens for Self-Governance, helped bring the lawsuit and told CNN that he expects other groups to join.

Meckler and the president of the NorCal group will hold a news conference on Tuesday in Washington to talk about the case.

"When the federal government runs amok, it is up to us to reign it in. Neither party in Congress can be relied upon to satisfactorily resolve this issue. They created the IRS, fund the IRS, and oversee the IRS. All of this abuse happened on their watch," Meckler said in a press release.

The IRS did not respond to a request for comment regarding the lawsuit, which was filed in Cincinnati where the IRS office responsible for the tax-exempt determinations is located.

Acting IRS Commissioner Steven Miller answered questions before a House committee on Friday.

"I want to apologize on behalf of the Internal Revenue Service for the mistakes that we made and for the poor service we provided. The affected organizations and the American public deserve better," Miller told the Ways and Means Committee.

"I do not believe that partisanship motivated the people who engaged in the practices" described in the inspector general's report. "I think that what happened here was that foolish mistakes were made by people who were trying to be more efficient in their workload selection," he said.

IRS officials are expected to testify at congressional hearings on Tuesday and Wednesday.

Several other groups have said they plan to sue the IRS. 

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