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IRS scandal swept up Murrysville group

| Wednesday, Sept. 25, 2013, 9:00 p.m.

A group that was founded to promote the preservation of the rural nature of Murrysville was scrutinized by the Internal Revenue Service when it applied for tax-exempt status.

Citizens for the Preservation of Rural Murrysville, or CPRM, was one of 162 groups named on a 2011 political-advocacy list published by national media last week. The list consisted of primarily Tea Party-related groups whose tax-exempt applications were delayed for more than a year.

According to comments in an IRS document, CPRM was tagged because it “engages in candidate election advocacy, specifically endorses certain candidates; engages in some legislative and general advocacy, need to determine if campaign election activities are primary activity.”

Former chairman Brien Palmer — who died in March — spoke with IRS agent Mitch Steele via phone in January about the IRS examination of his group. In an email that the Murrysville Star has obtained, Palmer wrote that he thought the local group was being scrutinized because larger organizations were violating political restrictions placed on tax-exempt groups.

“Because of what Karl Rove's groups and similar ones are doing, CPRM is getting caught up in very close scrutiny,” Palmer wrote.

“It turns out that CPRM is getting caught up with very large organizations that are using 501(c)4 organizational structures to influence elections — an activity that was never intended to be covered by this designation, and that is very clearly getting abused in the elections,” he wrote.

The group initially organized as a political action committee in 2008 in response to the proposal for The Marketplace on Twenty-two, a 550,000-square-foot proposed retail and office development. In the municipal council election that took place in 2009, the group backed three candidates — inaugural chairman Dave Perry, Jeff Kepler and Ron Summerhill — and successfully ousted councilmen Larry Nicolette and Jeff Franke, who had supported the development.

Perry, who resigned from CPRM when he was elected to council in 2009, said the organization followed the law.

“Did they do anything wrong? Absolutely not,” Perry said. “It was a very effected organization that was focused on development issues.”

Perry said that after he resigned, organizers realized the group didn't need to be registered as a political action committee because its mission became education, rather than political action.

“They reregistered as a nonprofit,” Perry said. “That's where, to my understanding, they got hung up.”

Palmer's emails indicate that the organization might have been flagged because it had been issued two federal tax-identification numbers. Palmer told CPRM members that Steele told him that the group might not qualify as a 501(c)3 — which includes exemptions for educational and charitable organizations — because that designation limits the amount of campaigning a group can do.

“I told him that we weren't doing anything different — that we were just one organization and always have been,” Palmer wrote.

However, board members decided several years ago to apply for 501(c)3 status to obtain tax-deductible status for any donations the group received. Judy Evans, secretary for the group, said the organization eventually decided it did not want to pursue tax-exempt status and withdrew its application.

The IRS itself has been under scrutiny since May, when agency officials acknowledged that agents in a Cincinnati office — including Steele — improperly targeted Tea Party groups for extra scrutiny when the groups applied for tax-exempt status during the 2010 and 2012 elections. An internal investigation by IRS Inspector General J. Russell George blamed ineffective management for allowing the practice to continue for more than 18 months.

Critics of the investigation have said the IRS didn't discriminate based on party affiliation; both liberal and conservative groups were targeted.

According to its website, CPRM is a group of residents from “all walks of life,” dedicated to keeping the community informed of issues that will affect the quality of life within the community.

“The majority of us moved to or stayed in Murrysville in order to live in a ‘residential and rural' community. We want to keep it that way,” organizers wrote.

Evans said the group is not a political one these days. She says it has backed both Republican and Democratic candidates for council and considers itself nonpartisan.

“Our goal is to keep Murrysville green, a rural taste of what we moved here for,” Evans said.

A spokesman for the IRS said the agency can't comment on why CPRM was examined or investigated under the disclosure provisions in the federal tax law. However, in an emailed statement, the IRS said the disclosure of such information should not have been published.

“We are troubled by the apparent section 6103 disclosure,” the IRS said in an emailed statement. “We have referred the matter to the Treasury Inspector General for Tax Administration, which is our standard practice for potential disclosure violations. We understand (the inspector general) is reviewing the matter. We cannot comment further.”

The Associated Press contributed to this article. Daveen Rae Kurutz is a staff writer for Trib Total Media.

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