http://dyn.politico.com/printstory.cfm?uuid=7F0A50CF-2ABA-4C05-8445-3C5F32CC28F9 IRS beats tea party in court
By: Rachael Bade
October 23, 2014 03:23 PM EDT
The IRS notched a major legal victory Thursday after a federal judge dismissed lawsuits brought by more than 40 conservative groups seeking remedies for being singled out in the tea party targeting scandal.
Judge Reggie Walton of the U.S. District Court of the District of Columbia threw out almost all counts brought against the tax-collecting agency in two cases, ruling that both were essentially moot now that the IRS granted the groups their tax-exempt status that had been held up for years.
The decisions have major implications for tea party groups suing the IRS over the issue. It appears they have a tough case to make because the IRS, since the controversy broke in 2013, has approved most tea party groups’ applications, which, according to Walton, keeps the court from hearing their cases.
“After the plaintiff initiated this case, its application to the IRS for tax-exempt status was approved by the IRS. The allegedly unconstitutional governmental conduct, which delayed the processing of the plaintiff’s tax exempt application and brought about this litigation, is no longer impacting the plaintiff,” Walton said in his decision to throw out True the Vote’s lawsuit against the IRS.
His reasoning was similar in the second case, where 41 conservative groups banded together to sue the IRS for similar misconduct: “[T]he allegedly unconstitutional governmental conduct … is no longer impacting the plaintiffs. … Counts … are therefore moot.”
The judge, appointed by Republican President George W. Bush, also said the groups couldn’t receive monetary relief from individual IRS officials, such as ex-IRS official Lois Lerner, because of the chilling effect it would have on tax administration.
The same judge in August rejected True the Vote’s bid for a court-appointed forensics expert to hunt Lerner’s lost emails, another blow to conservatives seeking outside experts to take the lead on the IRS investigation. Two years’ worth of the former head of the tax-exempt division’s emails were erased in a hard drive crash in 2011, the IRS says.
Walton did, however, demand the IRS within 14 days answer for two applications that have not yet been approved nor denied: applications for Patriots Educating Concerned Americans Now and Liberty Township Tea Party. But that footnote was the only part of the ruling that favored the conservative groups.
A furor erupted in May 2013, after a treasury inspector general report blasted the IRS for using discriminatory labels to sort through applicants seeking tax-exempt status using terms like “tea party ” and “patriots.”
Soon after a raft of right-leaning organizations that applied for tax exempt status sued the government. Some had had their applications put on hold for years; others were asked what were later ruled inappropriate questions about donors and political views during the application process.
The groups in their suits alleged that the IRS violated their First and Fifth Amendment rights with the inappropriate “be on the lookout” list that used words like tea party to hold up their applications. They sought monetary relief for their trouble as well as injunctive relief barring the IRS from discriminating against conservative groups again.
The agency has since changed its practices, including scrapping the lists.
When the suit was filed, 22 of the groups had already received their tax-exempt status, five had dropped their applications altogether and just over a dozen were still waiting to hear from the IRS.
Since then, the IRS had approved all but two, rendering much of the arguments moot, the judge said.
True the Vote tried to argue that the IRS could at a later time re-employ its old targeting scheme or audit the group unfairly as retribution for its lawsuit, but the judge didn’t buy that argument.
He said, since the defendant is the government, “there is less concern about the recurrence of objectionable behavior.” He also said the future worries about unfair audits were “speculative.”
“[T]he Court is satisfied that there is no reasonable expectation that the alleged conduct will recur, as the defendants have not only suspended the conduct, but have also taken remedial measures to ensure that the conduct is not repeated,” he said, citing IRS documents on the steps they’ve taken to ensure targeting doesn’t happen again.
In another victory for the IRS officials who have been sued as individuals for their actions, Walton said the groups could not receive monetary damages from them, citing a previous case that found allowing such would “make the collection of taxes chaotic if a taxpayer could bypass the remedies provided by Congress simply by bringing a damage action against [IRS] employees.”
