Koskinen Says IRS Has Eliminated Backlog of Tax-Exempt Applications

Susan Jones | April 1, 2015 | 7:16am EDT
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IRS Commissioner John Koskinen  (AP File Photo)

(CNSNews.com) - The IRS has eliminated the backlog of applications from groups seeking nonprofit status, Commissioner John Koskinen told a gathering in Washington on Tuesday.

But a conservative civil liberties group says "the facts show otherwise."

The American Center for Law and Justice said two of its clients are still awaiting a determination on their applications for tax-exempt status -- and one of those groups (the Albuquerque Tea Party) has been waiting for more than five years.

"The IRS continues to target this group and other Americans to this day," said the ACLJ.

At the National Press Club on Tuesday, IRS Commissioner Koskinen suggested that the backlog of applications for non-profit status was the result of volume, not political bias against conservatives before the 2012 election.

Speaking of various improvements at the IRS under his leadership, Koskinen said, "Another good example of a new initiative is in the tax-exempt area, where 15 months ago we had a backlog of applications from groups seeking status as private, nonprofit organizations.

"Those applications come in at the rate of 70,000 a year, and at one point the backlog exceeded 60,000. This kept groups in limbo for months or years. So our tax-exempt-organization group got to work, trying to come up with ways of tackling the problem before it got further out of hand.

"These efforts led to new processes and the development of a simpler application form for small groups, the 1023EZ. That form debuted last year, and the result is that our inventory of applications is now current.

"That's a huge accomplishment and a change that's helping all applicants, including larger organizations completing the longer and more complicated forms."

Later, in response to a question about whether the political targeting of conservative groups could happen again, Koskinen said he's confident it will not because he's acting on all the inspector-general's recommendations, including "better training" and "better review" of the entire process.

He emphasized that every IRS employee should feel responsible and empowered "to let us know when things are not going the way we thought they should go." And he expressed confidence that employees will come to IRS leaders the next time "anything looks like it's creating a problem or is about to."

"And I think there's been a re-dedication to the longstanding commitment of the IRS to be involved in tax administration, not be involved in politics," Koskinen added.

Koskinen also said the criteria for awarding tax-exempt status needs to be "clarified." "And I've said from the start, we need a process that's clear, fair to everyone -- every organization that applies -- and easy to administer, and we're working on that as well."

ACLJ says IRS 'continues the discrimination'

In a statement on its website, the ACLJ rejected Koskinen's assurances about the group that handles tax-exempt applications.

"This is an agency that has admitted to targeting so-called “conservative-sounding” groups and continues the discrimination despite assurances from IRS Commissioner John Koskinen that all problems have been addressed.

"This is an agency that President Obama assured the American public has not committed a 'smidgen of corruption.” But facts are stubborn things, and the facts are that the IRS actively hid evidence of its targeting practices until after the 2012 presidential elections in order to shield the president from any controversy...

"The Obama Administration may think that it can successfully stall and ultimately kill the IRS scandal, but here at the ACLJ, we continue to pursue our federal lawsuit against the IRS for its unlawful practices."

In testimony before a House Appropriations subcommittee on March 18, Koskinen said that "virtually all of the conservative organizations" who had their applications delayed because of extra scrutiny have been cleared.

"We did an expedited process," he explained. "If anybody would simply say they weren't going to spend more than 40 percent of their money on politics they would be immediately be cleared."

Koskinen said that just a "handful" -- fewer than "10 or 12" groups -- are still waiting, "and a number of them had chosen litigation, which is their perfect right and they can do that. But it just struck me a little ironic that people have said, 'Well, we didn't want to sign the 40 percent, we have the right to litigate.' And my sense was, well, you can do that. But it's little hard to argue that there wasn't a path forward that will get you through it."

The ACLJ said the standard offered by the IRS -- that groups agree to spend no more than 40 percent of their resources on political activity -- "is arbitrary and continues to infringe upon fundamental freedoms."

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