December 29, 2012
IRS Releases Pending Crossroads GPS Exemption Application to ProPublica (UPDATED)
Earlier this month, ProPublica announced that it had received a copy from the IRS of the Form 1024 (Application for Recognition of Exemption) for claimed 501(c)(4) Crossroads GPS in response to a public-records request. While ProPublica focused primarily on the apparent disconnect between the planned activities listed on the application and the actual activities of Crossroads GPS, it also acknowledged that the IRS released the application despite the fact it is still pending. While the IRS on discovering this apparent error warned ProPublica that publishing unauthorized returns or return information was a felony, ProPublica decided to proceed with its story after concluding that its actions were not covered by the relevant statute and also furthered strong First Amendment interests. The ProPublica story is part of a series on the activities of Crossroads GPS and other nonprofit organizations during the 2012 election, with the most recent story focusing on the role of such groups in the Montana U.S. Senate race.
While not yet reported publicly, I have reliable information that attorneys for several other, conservative nonprofit organizations with pending applications have been contacted by the IRS and informed that the IRS released those applications as well. If correct, their release indicates a serious breakdown in the IRS Exempt Organizations Division's procedures for keeping pending applications confidential. There is nothing at this point, however, to indicate that the release or releases here were anything but accidental, especially since the applications will be publicly disclosable if and when the applications are granted. This situation therefore appears to be different on that score from the earlier reported release of the always confidential Schedule B to the Form 990, involving the National Organization for Marriage.
UPDATE: ProPublica has now reported on the IRS applications of five other "conservative dark money groups", including providing links in the article to copies of the applications (with certain financial information redacted).
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Lloyd, is it so clear that releasing the forms prior to their completion is improper? 6104 says that a application that's been ruled on must be disclosed, but what's the authority for the proposition that a pending application can't be? Is it just 6103? Considering that the D.C. Circuit has already read 6104 pretty broadly (e.g., in requiring disclosure of denied applications for exemption), is it unreasonable to read 6103/6104 as authorizing release of a pending application? Given that the application is disclosable no matter its outcome, what's the harm in early release -- other than, you know, exposing "dark money" efforts to the public while an election is still ongoing and that information might actually matter to voters?
Posted by: BDG | Jan 3, 2013 8:44:55 AM
Good point, which Marc Owens also recently raised. I have not run this issue down, but the IRS appears to think such disclosure was problematic given its reported contact with ProPublica post-disclosure and its reaching out to attorneys for the affected groups. Plus even if both applications that are granted and ones that are denied are disclosable, what about the many applications that are withdrawn before a final determination?
Posted by: Lloyd H. Mayer | Jan 3, 2013 9:30:08 AM