WASHINGTON — A federal court dismissed two lawsuits against the Internal Revenue Service Thursday, ruling that the tax agency is no longer targeting conservative tax-exempt groups for greater scrutiny.
“Unless an actual, ongoing controversy exists in this case, this court is without power to decide it,” U.S. District Court Judge Reggie Walton ruled, dismissing one lawsuit brought by True the Vote, a conservative vote-monitoring organization.
True the Vote, an offshoot of the Tea Party-affiliated King Street Patriots, had its application as a social welfare group help up because the IRS suspected it was engaging in direct political election campaigning, which is forbidden under section 501(c)(4) of the tax code. IRS agents found that its web site contained “Democratic attacks and Republican/conservative response,” according to confidential IRS documents obtained by USA TODAY.
Walton said the IRS has assured the public that they’re no longer screening applications for tax exemptions based on its political leanings, a practice that led to the dismissal of several top IRS officials when it was disclosed by Treasury inspectors last year.
“Thus, the allegedly unconstitutional governmental conduct, which had delayed the processing of the plaintiffs’ tax-exempt applications and spawned this litigation, is no longer impacting the plaintiffs,” Walton said in a second opinion dismissing a lawsuit brought by Linchpins of Liberty and 40 other groups in 22 states.
“The decision by the court is disappointing,” said Jay Sekulow, Chief Counsel of the American Center for Law and Justice, which represented the plaintiffs in the Linchpins case. “However, it does not deter our efforts to seek justice for our clients. We are reviewing the decision and plan to appeal.”
Sekulow said many of his clients are still being held up: 28 organizations received tax-exempt status after lengthy delays, seven are pending, and five withdrew their applications out of frustration. He said another group had its tax exemption denied after refusing to answer questions it considered unconstitutional.
In a footnote, the judge did leave open the possibility that two groups — Patriots Educating Concerned Americans Now of Redding, Calif. and the suburban Cincinnati Liberty Township Tea Party — could still sue because the IRS failed to rule on their tax exemption application within 270 days. The judge gave the IRS 14 days to argue why that element of the lawsuit cannot go forward.
Because he dismissed the lawsuits on procedural grounds, Walton did not rule on the merits of the case. He wrote in a footnote: “The court’s opinion should not be interpreted as an assessment of the propriety of the alleged conduct by the defendants.”
True the Vote President Catherine Engelbrecht said in a statement that she was “stunned and disappointed” in the court’s ruling.
Walton was nominated as a federal judge in the U.S. District Court for the District of Columbia, by President George W. Bush in 2001.
The IRS admitted last year that it delayed the approval of tax exemptions for Tea Party groups based solely on the name of the group. Several criminal and congressional investigations into the matter are still ongoing, and the former IRS official responsible for exempt organizations, Lois Lerner, has been found in contempt of Congress for refusing to testify about the targeting.
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