The Internal Revenue Service is in the news because of a growing scandal where it admitted targeting conservative non-profit groups and generally making their lives difficult.

That led me to think about my own experiences trying to start a conservative non-profit in which the IRS delayed approving my application. I was dismayed because I had been given several examples of approved non-profit applications that I used as a template. And yet, I still got a letter with 18 questions that needed to be answered before the IRS would even consider my application.

The IRS questioned how much I had reported for a salary; wanted me to explain how my activities would not be political; and requested assurances that my news site wouldn’t "discredit particular institutions and individuals on the basis of unsupported opinions …"

My initial reaction: Has the IRS ever seen Media Matters of America, a non-profit 501(c)(3), which describes itself as a center "dedicated to comprehensively monitoring, analyzing, and correcting conservative misinformation in the U.S. media." Media Matters is in the news today for its involvement in releasing "talking points" on how to defend the Department of Justice secretly seizing phone records from the Associated Press. 

I've been a newspaper reporter since my senior year in high school. And when my newspaper, the Ann Arbor News, closed, I decided to start a non-profit news site with a conservative news perspective.

I started by going to a place in Ann Arbor that offers free guidance to people starting non-profits. I was given sample applications of approved non-profits and also got the applications of other similar non-profit news agencies. I also got a manual about how to go about doing the paperwork.

I specifically identified my news site on the application as having a conservative news judgment, because I had been advised that it would help explain to the IRS why there was a need for such an organization. There already was the (now former) website, Michigan Messenger, which was a liberal version of what I aspired to create. The void was the conservative alternative.

The letter I received from the IRS had 18 questions, many of which were never addressed in any of the materials I had been given or had seen on other applications that I used as a reference.

The IRS asked:

IRS: "You state the Chairman ... compensation. Indicate the duties to be performed and the number of hours each week that they will devote to such duties. State the basis for arriving at the amounts of such payment. Also, indicate who determined the compensation."

IRS: "Will your activities be limited to the study, research and assembly of materials and the presentation of an objective analysis to those interested in your media content including those who oppose it as well as those who favor it, and to the general public?"

IRS: "Will your media content discredit particular institutions and individuals on the basis of unsupported opinions and incomplete information about their affiliations?"

IRS: "Will you adopt an unbiased position and stick to the reasoned approach and avoid unsupported opinion?"

IRS: "Explain how your materials will substantially help a reader or listener in a learning process."

In the end, I never responded. The IRS wasn't the reason the news site didn't make it through its first year.

But as I look back today at the IRS scrutiny with the understanding that the agency has admitted to targeting conservative non-profits, I can't help but wonder if I was a victim of its admitted abuse of power.

Tom Gantert is the senior capitol correspondent for Michigan Capitol Confidential.

~~~~~

See also:

Michigan Tea Party Groups Says It Is A Victim Of IRS Discrimination

ECORSE — With a healthy balance sheet, a two-year budget and an improved credit rating, Ecorse is back in the hands of local leaders. 

In April, Gov. Rick Snyder announced the city no longer is in a financial emergency.

Former Gov. Jennifer Granholm put the Wayne County city under emergency management in 2009. Joyce Parker, the outgoing emergency manager, told Gov. Snyder recently that a $14.6 million cumulative deficit and a $5 million structural deficit were eliminated.

And to make sure the city stays in good standing financially, there are several safeguards in place.

The city must now work with a transition advisory board. The board was appointed by Gov. Snyder and is composed of three people: a treasury department official, a certified public accountant and Parker. The board will give advice about how the city should operate, but also will serve as a watchdog for the taxpayers. Elected officials must stick with the city's two-year budget and get approval for any long-term moves, like selling assets or negotiating contracts.   

Michigan has had a mixed history with emergency management, in part because of changes to the law. When the law was originally passed, emergency managers had no power to modify contracts. The law's current form changed that, which gave emergency managers the power to address fundamental and structural problems previously unaddressed by cities and school districts in financial distress.

Parker said the communication and open-mindedness she had from residents, staff and elected leaders helped Ecorse get through a difficult situation.

"The key is building a good foundation and team," she said. "They were open to me taking the time to explain the changes and allowing me to move forward with their support."

Parker also was able to put in place several changes to try to ensure financial success.

An administrator now manages the city. Before she arrived, elected leaders had full control of day-to-day operations, which provided a system that made the city vulnerable to mismanagement and corruption (some former city officials have been found guilty of bribery and other corruption charges). Now, elected officials and the city administrator will have specific duties and if the council wants to fire the administrator, it will need approval by the state treasurer. 

Ecorse also has made a change in the way it issues bonds. Parker worked with the Michigan Legislature to push for a law that allows a third party to collect taxes. The option is now available to cities with populations under 15,000. The tax collection agency then makes sure debt service payments can go into a separate lock box, ensuring investors will get paid. 

However, there is some risk. The city gives up financial flexibility when there are downturns in the economy, but Parker said the tradeoff was being able to improve the city's credit rating, which allowed the city to borrow money at better rates.

Another change Ecorse made was consolidating its police and fire departments.

Staff reductions saved the city $1.4 million and by combining staffs into one public safety department, the city can now get more patrols on the roads. The combined departments also will save between $300,000 and $400,000 a year.

So, how do elected officials feel about the three-and-a-half years under emergency management?

"She kept us in the loop. We brainstormed together and she worked with residents," said Mayor Darcel Brown. "I think the residents appreciated that."

Mayor Brown was elected shortly before Parker was appointed. The mayor and all city council members are up for election this year. He said there is renewed consciousness about spending.

"Under my watch, as mayor there will no longer be free will spending," he said. "That is a thing of the past."

Parker is now emergency manager of Allen Park, and thinks Ecorse can serve as a model for the state.

"Ecorse is operating well with limited resources, but certainly it is a baseline for growth for which there is quite a bit of potential now," she said.