MOBILE, Ala. (AP) — Faced with what seemed to activists like a curious amount of scrutiny from the Internal Revenue Service and mounting expenses, an Alabama tea party group gave up its fight for tax-exempt status rather than answer yet another letter from the federal government.
Now, a leader suspects his group was caught up in what the IRS now says was an improper review of conservative groups.
Pete Riehm, chief executive of the Mobile-based Common Sense Campaign, said in an interview Tuesday that the cost of pursuing tax-exempt status for the organization overcame the benefit of getting the tax break, so his organization quit the effort.
Riehm is worried about the overall effect that disclosures about the IRS' practices nationwide will have on the political system.
"This has a chilling effect regardless of your political stripe," said Riehm, who unsuccessfully ran for Congress last year in the 1st Congressional District along the coast.
The Justice Department announced this week it was opening a criminal investigation into the IRS' targeting of tea party groups for extra scrutiny over whether they qualified for tax-exempt status. Attorney General Eric Holder said the FBI is coordinating with the Department of Justice to see if any laws were broken.
The revenue service apologized and called the additional scrutiny inappropriate.
Alabama Attorney General Luther Strange, a Republican, issued a statement asking groups to contact his office if members believe their organization was targeted.
Riehm said his group began the process of seeking tax-exempt status in late 2009. The application process took two years and the IRS never granted the group tax-exempt status.
"We are neophytes at this," said Riehm. "We are very unsophisticated and unaware of how political hardball is played."
The Common Sense Campaign had to pay an $850 filing fee and $2,000 in attorney fees even though a lawyer who was friendly with the organization gave them a discount.