Tea Party Groups Settle Class Action Lawsuit targeting IRS

After years of controversy and litigation before a federal judge, the IRS has reached a settlement agreement with a class of non-profit groups associated with the Tea Party movement who were wrongly discriminated against when applying for non-profit status.

The controversy began in 2010. Tea Party groups and other politically-conservative nonprofits had noticed that their applications for non-profit status were being held up by unreasonable delays and requests for additional information by IRS employees. When these delays came to light, the Justice Department, an inspector general from the Treasury Department, and several congressional committees opened investigations into the IRS staffers’ conduct. Ultimately, a number of IRS staff members resigned or retired, including the head of the division that considered tax-exempt status applications, but no criminal charges were brought.

Settlement includes apology from agency


A number of Tea Party groups in both Cincinnati, Ohio and Washington, D.C. banded together to file class action lawsuits based on the discrimination they faced. The Washington D.C.-based lawsuit was resolved without a monetary award, but the Cleveland-based lawsuit appears ready to settle for approximately $3.5 million. The settlement, now awaiting approval by the court, includes an apology from the IRS, which states:

The IRS admits that its treatment of Plaintiffs during the tax‐exempt determinations process, including screening their applications based on their names or policy positions, subjecting those applications to heightened scrutiny and inordinate delays, and demanding of some Plaintiffs information that (the inspector general) determined was unnecessary to the agency’s determination of their tax‐ exempt status, was wrong. For such treatment, the IRS expresses its sincere apology.

The class action lawsuit was spearheaded by the nonprofit Citizens for Self-Governance. Mark Meckler, the president of Citizens for Self-Governance, explained, “This is not a Republican or Democrat thing, no administration should be able to do this, and I don’t only fear Democratic administrations doing this, I fear Republican administrations doing this as well.”


Help with unfair treatment by IRS agents


IRS agents are tasked with making unbiased decisions when executing their responsibilities as federal employees. These individuals wield a great deal of power, capable of demanding high fines, subjecting individuals to audits, or forcing people into court. When contesting a decision made by the IRS, it’s important to have a seasoned Texas tax attorney on your side, prepared to fight on your behalf for a just outcome.

If you are in search of professional, experienced legal help with a tax issue in Texas, contact the skilled tax attorneys at the Tyler offices of Scammahorn Law Firm, P.C. for a consultation on your case, at 903-595-1000.