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THOMAS MORE SOCIETY

A National Public Interest Law Firm SUPPLEMENTAL MEMORANDUM TO: FROM: The Honorable Aaron Schock, Member of Congress Committee on Ways and Means Thomas Brejcha, Peter Breen, Sally Wagenmaker, Esqs. Thomas More Society, a national public interest law firm based in Chicago, IL Supplemental Memorandum regarding IRS Harassment of Pro-Life Organizations July 24, 2013, updated August 1, 2013

RE: DATE:

SUMMARY On May 16, 2013, Thomas More Society submitted a legal memorandum reporting salient details of several legal cases handled by Thomas More Society which indicate that the harassment of conservative non-profit organizations by the Internal Revenue Service (IRS) extends well beyond Tea Party and Patriot groups and includes pro-life or anti-abortion groups (i.e., organizations whose primary purpose is to support and defend innocent human life). Since the IRS scandal became public, Thomas More Society has been contacted by numerous other groups seeking legal counsel relating to IRS harassment. This supplemental memorandum addresses three (3) new matters which provide further evidence of illegal, unconstitutional, viewpointbiased IRS harassment of pro-life organizations. These new cases also illustrate that harassment has been continuing through the present date. The Society is even now responding to IRS inquiries addressed to its client, Emerald Coast Coalition for Life, which go far beyond the IRS purview, and which have delayed issuance of its tax exemption. Patterns have emerged in the IRS harassment as shown by the experience of two different clients, Cherish Life Ministries and LIFE Group, which independently contacted Thomas More Society for help in the wake of recent publicity about the IRS scandal. The striking commonalities in the treatment of these two applicants for tax-exempt status are as follows: a. Both clients were harassed by the IRS Cincinnati, Ohio, office. b. Both clients IRS contact agent was a Mrs. R. Medley, Group #7880, ID# 52402. c. Both clients received initial denials of their applications for tax-exempt status on the same day, April 8, 2013. d. Both clients received a denial letter with identical wording.
19 S. LaSalle | Suite 603 | Chicago, IL 60603 | www.thomasmoresociety.org | P: 312.782.1680 | F: 312.782.1887
Injustice anywhere is a threat to justice everywhere. Rev. Dr. Martin Luther King

IRS Supplemental Memo July 24, 2013, updated August 1, 2013 Page 2 e. Both clients were asked by the IRS if their organization would be advocating or providing alternatives to the pro-life viewpoint. IRS made this inquiry to Cherish Life Ministries orally by phone, but the same inquiry was directed to LIFE Group in writing. Emerald Coast Coalition for Life, the Societys most recent client with IRS issues, received its harassment letter from the IRS Cincinnati, Ohio, office. The letter was signed by Tyrone Thomas ID# 1000281724, who is the same agent who dealt with our previously documented client in 2011, Christian Voices for Life. At the time when Christian Voices for Life received its harassment letter from agent Tyrone Thomas, his identification number was 95046 and the letter was sent from the El Monte, California, IRS office. In total, the Thomas More Society has now found no less than six (6) separate instances of compelling evidence of IRS harassment directed against pro-life groups, dating all the way back to 2009 and continuing through the present, originating from a variety of IRS offices, including offices in El Monte, California; in Chicago, Illinois; and in Cincinnati, Ohio. I. Cherish Life Ministries (Virginia) (Exhibits D-1 D-7) On March 14, 2012, Peter Shinn, on behalf of Cherish Life Ministries (CLM), submitted the organizations 1023 application for recognition of exemption under section 501(c)(3) of the Internal Revenue Code. [Exh. D-1] On February 19, 2013, Mrs. R. Medley of the IRS issued a letter to CLM requesting additional information about the organization including a percentage of the organizations time that is spent in front of abortion clinics. [Exh. D-2] On March 9, 2013, CLM submitted a letter responding to the IRS inquiry and providing additional information. [Exh. D-3] On April 8, 2013, Mrs. R. Medley of the IRS issued a letter notifying CLM that the organization did not qualify for tax exemption under section 501(c)(3) of the IRS Code. The letter told CLM that it qualified instead as a social welfare organization under section 501(c)(4) of the Code. [Exh. D-4] On April 22, 2013, CLM sent a letter to the IRS challenging the ruling that CLM did not qualify under the section 501(c)(3) of the Code. [Exh. D-5] On May 1, 2013, CLM called Mrs. Medley to follow up on its written communications. During that conversation she tried to convince the groups leader that Cherish Life Ministries is a political organization and does not qualify for 501(c)(3). She also stated that it needed to educate people about the abortion topic from all sides. On May 15, 2013, CLM contacted Thomas More Society requesting legal counsel and help in obtaining its tax exemption under section 501(c)(3) of the Code.

19 S. LaSalle | Suite 603 | Chicago, IL 60603 | www.thomasmoresociety.org | P: 312.782.1680 | F: 312.782.1887


Injustice anywhere is a threat to justice everywhere. Rev. Dr. Martin Luther King

IRS Supplemental Memo July 24, 2013, updated August 1, 2013 Page 3 On May 23, 2013, and on June 20, 2013, special counsel Sally Wagenmaker contacted IRS agent Mrs. R. Medley to discuss the delay of the tax determination letter for CLM. On May 23, 2013, special counsel Sally Wagenmaker left Mrs. R. Medley a detailed voice mail message, to accompany the power of attorney form that she faxed to the IRS. On May 29, 2013, Mrs. Wagenmaker first spoke with Mrs. Medley regarding the case status and additional materials sent to the IRS, regarding CLMs pending Form 1023 application. On June 5, 2013, Mrs. Wagenmaker left Mrs. Medley a detailed voice mail message, asking Mrs. Medley to call her regarding the case status. On June 12, 2013, Mrs. Wagenmaker called Mrs. Medley and spoke to her. Mrs. Medley said the physical file on CLM was in transit, from suspension status, and that she would call Mrs. Wagenmaker when the file arrived. On June 20, 2013, Mrs. Medley called regarding the pending Form 1023 application. The follow is a summary of the conversation by Mrs. Wagenmaker: I last spoke with IRS Agent R. Medley on June 20, 2013. She indicated that the physical file had been in transit but that she now had it. This case continues to be disturbing, as follows: First, Mrs. Medley asked more questions about the organization's activities, particularly whether CLM would have a continuous presence in front of abortion mills. I asked her about why, if that were true, that would be a problem given the CLMs participants First Amendment rights of assembly, free speech, and religious liberty. She would not respond. It is quite disturbing to me that she is questioning the continuous prayer presence at the abortion facility language in CLMs materials. There is nothing whatsoever inconsistent with public charity status for an organization to engage in such prayer activity. Second, Mrs. Medley also questioned CLMs qualification for 501(c)(3) given its statement that it would do some grassroots lobbying. I challenged her that (a) CLM already indicated that the activity would be less than 5%, which should be legally sufficient, and (b) CLM obviously satisfies the insubstantial activity test for 501(c)(3) organizations, so there should not be a problem here. Overall, Mrs. Medley seemed more hostile. She had a hard time letting me talk and provide information to her. I am not overly optimistic that she will deal fairly and appropriately with us on CLMs Form 1023 application. This tax exemption application seems stalled for no valid reason.

19 S. LaSalle | Suite 603 | Chicago, IL 60603 | www.thomasmoresociety.org | P: 312.782.1680 | F: 312.782.1887


Injustice anywhere is a threat to justice everywhere. Rev. Dr. Martin Luther King

IRS Supplemental Memo July 24, 2013, updated August 1, 2013 Page 4 After we hung up, I refaxed the supplemental materials that I had faxed to Mrs. Medley in late May 2013, because she said that she had not received them. I will follow up with additional phone calls and written communications as appropriate. On July 23, 2013, Mrs. Wagenmaker sent a letter providing additional information in response to Mrs. R. Medleys questions during the June 20, 2013, conversation. The letter addresses Mrs. R. Medleys chilling concerns regarding CLMs continuous prayer presence at the abortion facility, as well as materials CLM provides to churches, and the unsubstantiated concern that CLM will participate in lobbying activities in violation of section 501(c)(3) of the tax exemption code. [Exh. D-6] On July 24, 2013, Mrs. Wagenmaker called IRS agent Mrs. R. Medley and left her a message following up on the July 23, 2013 letter. On July 26, 2013, Cherish Life Ministries received its tax exemption letter, date-stamped June 26, 20131. [Exh. D-7] II. LIFE Group (Missouri) (Exh. E-1 E-6) On March 15, 2012, Patrick Castle of LIFE Group (LG) submitted a 1023 application for recognition of exemption under Section 501(c)(3) of the Internal Revenue Code. [Exh. E-1] On May 3, 2012, the IRS sent LG a letter advising that its tax exemption application would require an Exempt Organization specialist to seek further development of their application. [Exh. E-2] On February 2, 2013, Mrs. R. Medley of the IRS issued a letter to LG requesting additional information including an inquiry whether LG provided information regarding other alternatives to pro life? [Exh. E-3] On February 15, 2013, LG submitted a response to the IRS letter, providing the IRS with additional information. [Exh. E-4] On April 8, 2013, Mrs. R. Medley of the IRS issued a letter notifying LG that the organization did not qualify for tax exemption under section 501(c)(3) of the Code. The letter told LG that it qualified instead as a social welfare organization under section 501(c)(4) of the Code. [Exh. E-5] On April, 17, 2013, LG requested, and received, an extension until May 6, 2013, to reply to the IRS April 8, 2013, denial letter. On May 2, 2013, LG submitted, through its newly retained legal counsel, a response to the IRS challenging the denial of its tax-exempt status. [Exh. E-6] This memorandum was originally submitted to Congressman Aaron Schock on July 24, 2013, prior to receipt of CLMs exemption letter, but has been updated to reflect that Cherish Life Ministry received its tax determination letter from the IRS on July 26, 2013.
19 S. LaSalle | Suite 603 | Chicago, IL 60603 | www.thomasmoresociety.org | P: 312.782.1680 | F: 312.782.1887
Injustice anywhere is a threat to justice everywhere. Rev. Dr. Martin Luther King
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IRS Supplemental Memo July 24, 2013, updated August 1, 2013 Page 5 On May 14, 2013, the IRS issued LG a letter granting its tax-exempt status, which LIFE Group received on May 18, 2013. On May 19, 2013, LG contacted the Thomas More Society requesting that counsel review its one year and three month struggle to get tax-exempt status, which evidenced further harassment on the part of the IRS. III. Emerald Coast Coalition for Life (Florida) (Exh. F-1 F-4) On June 7, 2012, Edward Rouse of Emerald Coast Coalition for Life (ECCL) submitted a 1023 application for recognition of exemption under Section 501(c)(3) of the Internal Revenue Code. [Exh. F1] On September 7, 2012, ECCL received a letter from the IRS, signed by exempt organization director Ms. Lois G. Lerner, advising that its tax exemption application would require an Exempt Organization specialist to seek further development of its application. This letter informed ECCL that it should expect to be contacted within approximately 90 days from the date of this notice. While the cover letter of this notice was dated September 7, 2012, the second and third page was dated June 21, 2012. The IRS initiated no contact within 90 days following ECCLs receipt of that letter. [Exh. F-2] On June 19, 2013, over one year after the 1023 application was submitted by our client, IRS agent Tyrone Thomas sent ECCL a letter requesting additional information about the organization. [Exh. F-3] On July 6, 2013, ECCL contacted the Thomas More Society requesting legal counsel to aid in its twelve-month struggle to obtain its tax-exempt status. On July 9, 2013, Thomas More Society special counsel Sally Wagenmaker issued a letter to IRS agent Tyrone Thomas responding to the IRS letter. In the letter to the IRS, Mrs. Wagenmaker repeatedly calls the IRS interrogation beyond the scope of the IRS and odd, stating multiple times I do not understand why you are asking and demanding an IRS determination letter be issued without further delay. [Exh. F-4] As of today, August 1, 2013, the tax exemption request to the IRS by ECCL is still pending. ###

19 S. LaSalle | Suite 603 | Chicago, IL 60603 | www.thomasmoresociety.org | P: 312.782.1680 | F: 312.782.1887


Injustice anywhere is a threat to justice everywhere. Rev. Dr. Martin Luther King