POLITICS
05/20/2013 03:52 pm ET Updated May 20, 2013

Crossroads GPS Claims IRS Target Status

Crossroads GPS, the conservative nonprofit that directly spent more than $70 million on federal political campaigns in the 2012 election, believes that it is one of the organizations targeted for further review by the Internal Revenue Service, according to a Los Angeles Times report.

The organization, co-founded by Karl Rove after the Supreme Court's 2010 Citizens United ruling opened the door to new political spending, has been held up by campaign finance watchdogs as the primary example of a political group using the tax code to evade disclosure of its donors. Nonprofits organized under section 501(c)(4) of the tax code, as Crossroads GPS is, are not required to name their donors, while political organizations like 527s and super PACs must disclose who funds them.

Crossroads GPS formally filed for tax-exempt status in 2010, a process that is not required. It has still not been approved, and its application was inadvertently leaked to the investigative news site ProPublica in 2012.

"From everything we know -- the criteria used by the IRS to target conservative groups, the timing, the still outstanding application after nearly three years, the leaking of the application from the Cincinnati office, and other factors -- Crossroads was one of the targeted groups," Crossroads spokesman Jonathan Collegio told the Los Angeles Times in an email.

Collegio declined, however, to provide the Times with any evidence that Crossroads did or did not receive requests for information of the kind that were deemed inappropriate by the Department of the Treasury's inspector general (IG) in his report on the IRS' targeting of conservative groups seeking tax-exempt status. Those inappropriate requests included donor lists and expansive questionnaires seeking details about a group's relationship with elected officials past, present and future.

The targeting of conservative groups was inappropriate, according to the IG report, because of the biased criteria used to choose which groups would receive greater scrutiny. The improper "be on the lookout" criteria included words like "tea party" and "patriot" and, later, broader but still biased advocacy areas like "limiting/expanding government" and "educating on the Constitution and Bill of Rights."

The IG report stated, "Criteria for selecting applications for the team of specialists should focus on the activities of the organizations and whether they fulfill the requirements of the law. Using the names or policy positions of organizations is not an appropriate basis for identifying applications for review."

Crossroads GPS spent $16 million on political campaign ads in 2010, its first year of existence, and another $70 million during the 2012 electoral cycle, according to the Center for Responsive Politics. The group also spent tens of millions on issue ads aimed at specific candidates up for election. Moreover, Crossroads GPS is staffed largely by former Republican Party functionaries, something that has raised IRS eyebrows when it looked at other groups.

Without any inappropriate targeting, all these factors, reported both in the media and to the Federal Election Commission, could have led to a further review of Crossroads GPS' tax-exempt application.

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