IRS Chief Says Agency Isn’t Targeting Political Nonprofit Groups

The U.S. Internal Revenue Service hasn’t been “targeting” particular nonprofit groups engaged in political activity, Commissioner Douglas Shulman said today.

Republicans have expressed concern that the IRS was singling out Tea Party-backed groups for extra scrutiny in deciding whether to grant them tax-exempt status.

Shulman said today the groups applied for 501(c)(4) status, a nonprofit status for “social welfare” organizations whose primary activity isn’t political.

“All of these organizations are not being examined,” he told a U.S. House Appropriations subcommittee. “They voluntarily came in and said: I’d like to apply for 501(c)(4) status.”

Shulman said a rotating three-person committee of IRS career appointees reviews political activity and makes decisions about how the agency addresses that issue in audits.

“There’s many safeguards built in so this has nothing to do with election cycles and politics,” he said. “This notion that we’re targeting anyone is off.”

Shulman said the groups could have begun operating with 501(c)(4) status without seeking IRS approval and then been subject to audits only if the agency chose to examine them.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net