The IRS recently filed a motion to dismiss class action claims brought by Tea Party groups.  In NorCal Tea Party Patriots, et. al. v. IRS, et. al., S.D. Ohio, Case No. 1:13-cv-00341, Tea Party groups asserted that the IRS singled out their organizations when those organizations sought exemption from taxation pursuant to Section 501(c)(4) of the Internal Revenue Code, which would allow those groups to avoid paying duplicative tax on contributions made for expressive activities.  The Tea Party groups assert that the IRS targeted their organizations for excessive scrutiny which caused delay and expense, violated the Privacy Act of 1974 and violated the groups’ First and Fifth Amendment rights.  The groups seek damages for the privacy violation, expense of complying with unlawful information requests, loss of donations, membership fees and grants, and increased tax burdens.

The IRS motion to dismiss argues that the case should be dismissed because organizations do not have standing to bring Privacy Act claims, which are only available to individuals.  The IRS also argues that the Tea Party groups’ claims for damages are barred by the Declaratory Judgment Act and the Anti-Injunction Act.  Lastly, the IRS argues that new claims for damages brought  pursuant to Sections 6103 and 7431 of the Internal Revenue Code, which allow damages for unauthorized disclosure or inspection of confidential tax return information, are barred because the inspections occurred as a result of the plaintiffs’ own requests for tax-exempt treatment.