MADISON, Wis. — If you think the Internal Revenue Service’s persecution of conservative organizations has faded into an “inappropriate” past, the folks from the Rock River Patriots would like to set the record straight.
“We are being totally overrun by an out-of-control government,” said Marvin Munyon, a director of the southern Wisconsin tea party group.
The Rock River Patriots, like so many other limited-government organizations applying for tax-exempt status, was given the administrative runaround for more than a year before Munyon, exasperated and “threatened,” threw up his hands and dropped the group’s pursuit of 501(c)(4) status.
Not only has the revenue agency demanded the small, grassroots organization pay hundreds of dollars in taxes owed while the Rock River Patriots worked through the onerous tax-exempt application process, the IRS is charging nearly as much in late payment fees, penalties and interest.
Munyon said the group has no problem paying the $475 in taxes it owes as a taxable entity, for 2011 and 2012. They don’t mind picking up the $26 and change in interest owed on the back taxes. But the Patriots, which Munyon asserts the IRS originally targeted because of its tea party-sounding name, does take exception to the $300 plus in so-called “failure to file” fees and “failure to pay” penalties the IRS insists on assessing.The Rock River Patriots were caught in an administrative Catch-22, as is so often the case at the IRS. Munyon in April 2012 applied for 501(c)(4) designation for the group, as a pending tax-exempt organization. The IRS cashed the group’s $400 application fee on May 2, 2012, according to documents.
Munyon was informed by letter in January 2013 that the IRS was delayed in reviewing applications for tax-exempt status, all the while the meter was running on the conservative organization’s tab with the IRS.
“It’s a terrible cat-and-mouse game,” Munyon said. “It gets almost overwhelming. It’s hard for me to keep it all straight,” he said of the voluminous correspondence, forms and hours upon hours of phone calls Munyon has dealt with during the past couple of years.
The IRS did offer a deal, Munyon said — an offer the limited-government advocate had to refuse.
An IRS agent in Ogden, Utah, informed Munyon that if he could pledge that the Rock River Patriots never violated an election law in the past, were not violating any such laws at present and would never do so in the future, the IRS would guarantee the group a favorable ruling on its tax-exempt status within two weeks.
“I said, ‘If you have not been able to grant us a favorable status in two years, how could you grant it to us in two weeks?’” Munyon said. “Their comeback was that they ‘didn’t call to argue. We called you to help you.’”
Munyon said he didn’t want that kind of help from an agency now notorious fortargeting conservative groups, flagging and delaying limited government nonprofits applying for tax-exempt status. Munyon, the leader of a small organization with limited resources, didn’t want to sign a document that could unwittingly land him in jail on perjury charges.
He said doesn’t believe the Rock River Patriots have ever done anything outside of the requirements of a tax-exempt status, but he has no idea what activities the government — particularly a federal government led by a liberal president — might deem unacceptable.
More galling, the IRS won’t give the group back its $400 tax-exempt application fee.
“One lady just laughed at me. She said, ‘You ought to know by now we don’t send any money back to anybody,’” Munyon said.
Exhausted, Munyon bowed to the mounting administrative pressure and what he considered to be IRS threats, ending the Rock River Patriot’s pursuit of tax-exempt status.
Conservative critics of the IRS say that is the outcome the agency seeks as it moves to change the rules on 501(c)(4) designations. In the guise of limiting politics in such groups, the IRS has triggered a political firestorm. Small organization leaders like Munyon say they know what it feels like to get burned.
“You can call it what you like but you are at their mercy,” he said of the IRS.
A representative from the Internal Revenue Service declined to comment on Munyon’s claims, saying the agency is strictly prohibited from talking about individual tax cases.
The U.S. Treasury Department’s proposed rule changes target “social welfare” organizations such as Americans for Prosperity on the right and the League of Conservation Voters on the left. The language ostensibly would allow the agency to go after political advocacy and anonymous donations, but critics say it would principally attack free speech.
Gene Policinski, chief operating officer of the Newseum Institute and senior vice president of the First Amendment Center, said the proposal creates more questions than answers. He gets that transparency is critical to an informed electorate, but should it come at the expense of basic First Amendment rights?
“Moving too far in any direction impinges on fundamental rights, like freedom to petition the government and free speech. I hope in all of these discussions we keep those rights in the forefront,” Policinski said.
“Ultimately, as we so often do, we may have to deal with as close as you can get. But the First Amendment’s 45 words don’t say ‘as close as you can get,’” he added.
The proposal is in the public comment phase.
Make no mistake about it, conservatives see a political speech war in the offing.
“We are all going to spend a tremendous amount of time and energy fighting back against this.” Dan Backer, an Alexandria lawyer specializing in election law who represents many nonprofit groups on the right, recently told the Washington Post.
“The IRS is approaching this as, ‘We are giving you the right to speak and you are going to speak within the confines we tell you,’ ” Backer said. “And that’s wrong. This whole effort is simply a way to empower government to regulate speech.”
In Wisconsin, outside of the IRS’ push to change the rules but within what critics see as an overarching assault on the First Amendment, a Democrat-led secret investigation into conservative organizations has been billed as the “Wisconsin political speech raid” by the Wall Street Journal Editorial Board.
In that case, the so-called John Doe investigation has subpoenaed more than 100 conservative and free-market activists in a wide-ranging search for signs of illegal campaign coordination, sources have told Wisconsin Reporter. Though gagged by provisions of the subpoenas, several sources have told Wisconsin Reporter the manifold legal attack on nonprofit political organizations has included pre-dawn raids on homes and offices; confiscated equipment and files; and demands for phone, email and other records.
Munyon said he sees things only getting worse for conservatives if the IRS’ proposals go through.
“A few years back they said the IRS was becoming more friendly. I certainly haven’t found that to be true where I’ve worked with them,” he said. “They are intimidating and threatening.”
Contact M.D. Kittle at email@example.com