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IRS probing tax-exempt groups

Political activities seen as illegal prompt concerns

WASHINGTON -- About 60 charities, churches, and other tax-exempt groups are being investigated for potentially breaking federal rules that bar them from participating in political activity, the Internal Revenue Service said yesterday.

Such violations would threaten their tax-exempt status, the IRS said.

The investigations involve guidelines for 501(c)(3) groups, which grant tax-exempt status so long as organizations do not participate in political activities such as endorsing candidates or making campaign donations.

By law, the IRS cannot disclose names or details of investigations. But it said about 20 of the groups under investigation are churches.

Heightened concerns about improper political activities this election season warranted the creation of a committee of career civil servants to examine potential political violations by tax-exempt groups, according to the agency. Of more than 100 reports received in the past couple months, that committee found 60 cases that merited further scrutiny, the IRS said.

''Our obligation is to enforce the law, which prohibits all charities from engaging in political activities," IRS commissioner Mark Everson said in a statement yesterday.

The IRS made the disclosure a day after NAACP chairman Julian Bond said the IRS was investigating his group following his criticism of President Bush.

Documents released Thursday by the Baltimore-based NAACP said IRS agents were investigating Bond's keynote address July 11 at the NAACP's annual convention in Philadelphia.

An ''Information Document Request" from the IRS said Bond in his remarks ''condemned the administration policies of George W. Bush on education, the economy, and the war in Iraq."

Bond says the timing of the probe gave the appearance that it was politically motivated, a charge the IRS denied.

''What seems enormously outrageous to us are the facts that condemnation and criticism are reasons that we should lose our tax exemption," Bond said in a conference call yesterday.

He maintained that the speech was nonpartisan although it was critical of Bush.

Democratic presidential candidate John Kerry asked the Justice Department's civil rights division to conduct its own investigation into the IRS actions.

''If the timing of this process leads some to believe politics is at play, it could have a chilling impact on African-Americans' participation in the American political process," Kerry said in a letter that was sent yesterday to assistant attorney general R. Alexander Acosta.

An IRS ''fact sheet" provided by the agency yesterday noted, ''Even activities that encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria violate the political campaign prohibition."

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