IRS Pausing Tax-Exempt Political Activity Investigations

As the agency reviews its enforcement process it will not conduct audits of tax-exempt organizations’ political activities.

At a House Ways and Means Oversight Subcommittee hearing last week, Acting IRS Commissioner Daniel Werfel revealed that political investigations into exempt organizations are on hold until the agency can review its enforcement process.

Bloomberg BNA reported audits looking into inappropriate political activity by exempt organizations have been halted in order to ensure that appropriate safeguards are in place.

“They are no longer on a path of potential examination at this time. That whole process is on hold,” Werfel testified [PDF].

The purpose of the Ways and Means Oversight hearing was to examine progress the IRS has made since the targeting of certain political tax-exempt groups became public earlier this year. In May, the Treasury Inspector General for Tax Administration audit found that certain groups looking to attain exempt status were inappropriately targeted for name and policy position.

In his opening statement, Oversight Chairman Charles Boustany (R-LA) indicated that the Ways and Means committee is focused on determining the extent of the targeting and who was responsible.

“Four months after [Director of the IRS Exempt Organizations division] Lois Lerner’s apology for the targeting, there are many questions outstanding,” Boustany said. “And frankly, there are not nearly enough answers. What is clear is that the IRS faces a long road to recover its reputation. And the only way to get there is through transparency and accountability.”

Werfel detailed some of the progress the IRS has made in strengthening and clarifying its processes, which include improved methods of screening applications for tax-exempt status, enhanced training for screening agents, reducing the backlog of 501(c)(4) applications, and a comprehensive review of audit-selection criteria.

“We still have a great deal of work to do in setting a course for the IRS, and many challenges remain,” Werfel said. “But I believe that we are moving in the right direction, and will continue making progress in the weeks and months ahead.”


Chris Vest, CAE

By Chris Vest, CAE

Chris Vest, CAE is vice president, corporate communications and public relations at ASAE. MORE

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