The IRS's embarrassment creates free advertising for conservative groups

Tea Party protesters demonstrate against the Supreme Court ruling upholding the constitutionality of the Affordable Healthcare Act in Washington, DC, June 28, 2012.

The revelation that groups applying for tax-exempt status with words like “patriot,” “tea party” and “9/12” in their names were singled out for extra scrutiny has been an embarrassment for the IRS. But for the targeted groups themselves, it’s been free advertising.

The conservative Kentucky 9/12 Project applied for so-called 501(c)4 status back in December 2010. It took more than two years and thousands of pages sent to the IRS, but last month, the group won. And donations poured in.

“We had people coming in that were waiting on the sidelines saying, ‘Okay, where do I send my check now?’” says executive director Eric Wilson, who oversees the group’s modest $16,000 annual budget.

Wilson wouldn’t disclose fundraising details, but he says an even bigger tide of money and support rolled in after the IRS admitted it scrutinized groups like his.

“The reaction’s been amazing,” Wilson says.

For groups still waiting for IRS approval, the effect is more mixed. The Albuquerque Tea Party applied for 501(c)4 status in December 2009, but still hasn’t gotten final approval. Rick Harbaugh, president of the state group, says that instead of fielding new donations, he has been fielding calls from past donors who fear that the IRS will go after them next.

“Our donors are very nervous about getting their name before the IRS if we are getting targeted by the IRS,” he says.

One of the prime advantages of organizing as a 501(c)4, after all, is keeping those donors secret.

About the author

Stan Alcorn is a multimedia journalist in New York City. He has reported for NPR and WNYC, where he has focused on business and the New York tech scene.

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