March 3, 2005 | Read Time: 2 minutes
The Internal Revenue Service showed no political bias when it decided last year to audit dozens of charities to see whether they had illegally participated in political campaigns, according to a report by the Treasury Department.
But starting the audits just months before Election Day contributed to a false perception that the investigations were politically motivated, said the report by the department’s inspector general for tax administration.
The inspector general’s report adds to a controversy that arose after the IRS began an audit of the National Association for the Advancement of Colored People last fall (The Chronicle, November 11, 2004).
The IRS told the NAACP in October that it was concerned that a speech by the group’s chairman, Julian Bond, might have violated the government’s ban on politicking by charitable organizations.
The NAACP denied the speech was improper, and said its notification of the audit — which the IRS provided the charity less than a month before Election Day — seemed to be motivated by Mr. Bond’s criticism of President Bush in the speech.
The Treasury Department’s inspector general examined the special “fast track” audit process that the IRS set up last year to investigate whether charities were getting involved in political campaigns.
Under federal law, charities may not support or oppose a candidate for public office, but nonprofit organizations are allowed to take public positions on issues related to their charitable missions.
The revenue service initially looked at accusations against 131 tax-exempt groups, including the NAACP, and eventually decided to audit 80 of them — without regard to the organizations’ political affiliations, the inspector general’s report said.
However, the revenue service was too slow to make referrals to its auditors and failed to follow its own deadlines for expedited reviews, the report found.
A copy of the inspector general’s report is available online from the Internal Revenue Service at http://www.irs.gov/newsroom/article/0,,id=135389,00.html.
