CASPER, Wyo. — The director of a Cheyenne nonprofit that is developing educational materials about the U.S. Constitution believes his organization was politically targeted during the 33 months it took the Internal Revenue Service to give it tax-exempt status.
The Spirit of Freedom Institute in Cheyenne applied for — and ultimately received — 501(c)(3) status, which is different from 501(c)(4) status that was the focus of a congressional investigation. Last week, the House Oversight and Government Reform Committee released a report saying the IRS scrutinized conservative groups that were seeking tax-exempt status under 501(c)(4) of the Internal Revenue Code, which caused delays, while most liberal and left-leaning groups won approval.
According to the report, 501(c)(4) designation allows groups to focus on advancing social welfare. The IRS says 501(c)(3) groups are charitable organizations. Both designations allow limited campaigning for political issues or candidates.
Keith Trimels, the co-founder and director of the institute, believes his organization was caught in the IRS’ overall troubles with 501(c) rules. IRS Commissioner John Koskinen's written testimony to the House Appropriations Committee on Feb. 26 said that it's taking a long time for 501(c)(3) applications to get approved.
"We presently have a backlog of 60,000 section 501(c)(3) applications, many of them well over a year old," he said. "Our goal is to be able to report a significant decrease in this number by this time next year."
Karen Connelly, an IRS spokeswoman, said federal law prohibits the IRS from commenting on a specific taxpayer's or organization's case.
The Spirit Freedom Institute is the second organization in Wyoming that believes it was politically targeted. In July, the Wyoming Policy Institute received 501(c)(3) status from the IRS, after waiting 20 months.
When the Spirit of Freedom Institute formed on July 1, 2010, it said its education mission was focused on “the history and founding of the United States and the United States Constitution,” according to a letter the institute’s attorney mailed and emailed to members of the Wyoming congressional delegation. Those words likely convinced IRS agents that the institute was conservative, Trimels said. But Trimels said the group stays out of politics.
“We just identify a constitutional education function as our primary purpose,” he said. “We didn’t define ourselves politically. We’re not affiliated with any party.”
Further arousing Trimels’ suspicions that the IRS was politically targeting the institute was a letter from the IRS more than a year after the application, asking for the statements about education, work and philanthropic backgrounds of the institute’s officers, directors, board members and trustees, he said.
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“They were asking for information on the board of directors that really had no basis on the decision for authorization of a nonprofit,” Trimels said.
The institute’s attorney, Karen Budd-Falen, asked the IRS why the information was necessary. According to her letter to the Wyoming delegation, an IRS agent told her it received a new policy direction to its review of tax-exempt applications. She sent a Freedom of Information Act request, trying to learn about the change in policy. The IRS twice declined to provide her information. On May 23, she wrote to the delegation, asking for action.
“I’ve done quite a few IRS requests for nonprofits," Budd-Falen said. "We’ve never been asked those kind of questions (about workers' backgrounds) in the years I’ve worked on 501(c)(3)s. "
“The bottom line is we got wrapped up in the IRS stuff that is going on in the targeting of conservative groups,” Trimels said.
Tax-exempt status was approved in November. Trimels believes it happened with the help of Sen. John Barrasso and Sen. Mike Enzi.
Laura Mengelkamp, a spokeswoman for Barrasso, said there were too many unanswered questions to say if the institute was politically targeted. Daniel Head, spokesman for Enzi, said the senator’s Cheyenne office worked with the Taxpayer Advocate Service, an independent organization within the IRS that aims to help taxpayers resolve problems.
Joe Spiering, a spokesman for Rep. Cynthia Lummis, R-Wyo., said the congresswoman’s office never responded to the letter because the email was sent to the wrong address. But Trimels said the letter was also sent through the U.S. Postal Service. Lummis’ recent criticisms of the IRS either smacks of “political expediency or sheer hypocrisy,” he wrote in a letter to the Casper Star-Tribune.
Armed now with tax-exempt status, the Spirit of Freedom Institute is regrouping, Trimels said.
“Some of what we wanted to do was technology based — and that was of course three years ago, and technology has changed,” he said. “We intend to go forward. What we’ve been doing for the last three months is trying to figure out how.”