Republicans Push Back Against Requests to Investigate Nonprofit Groups

Created: October 07, 2010 18:17 | Last updated: July 31, 2020 00:00

After a spate of requests by Democrats and campaign finance groups for an IRS investigation of a number of section 501(c) organizations accused of abusing their status by engaging primarily in political advocacy, some Senate Republicans are pushing back:

Such a review threatens to “chill the legitimate exercise of First Amendment rights,” wrote two Republican senators, Orrin G. Hatch of Utah and Jon Kyl of Arizona, in a letter sent to the I.R.S. on Wednesday.

Republicans were quick to point out that the I.R.S. was put under tight restrictions about access to Americans’ tax returns as a result of political shenanigans by the Nixon administration involving tax audits.

Kyl and Hatch’s request also comes on the heels of an allegation by Sen. Charles Grassley (R-Iowa) that the Obama administration improperly disclosed the confidential taxpayer information of Koch Industries during a background call with journalists:

Mr. Grassley called the matter “a very serious allegation.” The White House said it was a simple misunderstanding.

It grew out of a briefing that officials held for reporters in August in discussing possible changes in the tax code for corporations.

A administration official, speaking on the condition of anonymity in the background briefing, pointed to Koch Industries as an example of “multibillion-dollar businesses that are structured as partnerships in ways that allow them to avoid paying sizable corporate taxes.”

Mr. Grassley, in requesting an investigation, said that the official’s statement implied “direct knowledge of Koch’s legal and tax status,” in possible violation of taxpayers’ privacy laws, and may have been “politically motivated.” The White House, in a statement, denied any improper accessing of confidential taxpayer information. “The official’s statement was not based on any review of tax filings and we will not use this example in the future,” the White House said.

The White House, in other words, claims it was simply pointing to Koch Industries as an example of a broad phenomenon, much like the president did when he discussed Koch’s brainchild, Americans for Prosperity, and the possibility that it could be receiving foreign funding. It wasn’t actually sifting through Koch’s taxpayer information. But Grassley’s accusation has been sufficient to prompt an investigation by the Treasury Department’s Inspector General into the issue.

Sens. Hatch and Kyl, for their part, are apparently afraid that Senate Finance Committee Chairman Max Baucus’s request for the IRS to investigate will be a partisan process. In response, they wrote in their own letter to the IRS on Wednesday that, ”I.R.S. audits and investigations are specifically intended to be separated from the political process. We expect the I.R.S. will adhere to those standards despite requests to the contrary from high-level political officials.”