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Conservative group linked to Orrin Hatch sues IRS

Published April 30, 2014 3:40 pm

Politics • Freedom Path says agency leaked tax documents to investigative reporting website.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A secretive conservative group that helped Sen. Orrin Hatch win re-election in 2012 is suing the Internal Revenue Service, claiming government bureaucrats targeted it based on its political views.

Freedom Path wants the IRS to pay for any damages. It also wants a federal judge to strike down rules the agency uses to decide if an advertisement is advocating a public policy goal or helping a political candidate.

The lawsuit, filed Monday in Dallas, focuses on tax documents that Freedom Path believes the IRS leaked to the online investigative reporting website ProPublica. Those documents were used in a series of stories, including in The Salt Lake Tribune, that explored how social welfare groups, such as Freedom Path, use their tax-exempt status to hide their donors as they seek to help candidates. Freedom Path said those articles resulted in bad publicity.

During the 2012 campaign, Freedom Path spent at least $570,000 to support Hatch's bid for a seventh term or to challenge his Republican opponent, former state Sen. Dan Liljenquist. It was the largest outside group supporting Hatch, R-Utah.

The group, led by Scott Bensing, who worked with Hatch at the National Republican Senatorial Committee, argued that it did not need to disclose its donors because it spent more than half its money on advocacy ads not tied to a specific campaign. That included one promoting a balanced-budget amendment, which encouraged viewers to contact Hatch and Sen. Mike Lee, R-Utah.

The IRS determined the ad was political, using an internal review known as the "facts and circumstances" test. Freedom Path rejects the agency's analysis and seeks to overturn it.

Hatch has criticized the leak to ProPublica in Senate hearings and called for a federal probe. That leak is just part of a wider scandal involving the way the IRS examined the nonprofit status of tea party-affiliated groups and other politically involved organizations.

Freedom Path specifically names Lois Lerner and the IRS as defendants in the case. Lerner led the IRS team that inappropriately targeted conservative organizations, as disclosed in an 2013 inspector general's report. She apologized and subsequently retired. In the middle of the political scandal, President Barack Obama fired the IRS commissioner, calling the targeting "inexcusable." The Republican-led House isn't satisfied with federal action and may hold Lerner in contempt for refusing to testify.

mcanham@sltrib.com