The IRS has admitted that the office responsible for reviewing the tax-exempt status of political organizations unfairly targeted and blacklisted conservative groups for additional scrutiny during the 2012 election season. The office singled out organizations that had the words "Tea Party" and / or "patriot" in their name.
The disclosure of the malpractice was made by Lois Lerner, who heads the IRS division that oversees tax-exempt groups. "That was wrong. That was absolutely incorrect, it was insensitive and it was inappropriate," said Lerner at a conference sponsored by the American Bar Association.
Out of 300 applications singled out for review, 75 of them appear to have been conservative organizations and although none have had their tax exempt status revoked some withdrew their applications.
Since 2010 the number of organizations applying for tax exempt status under section 501 (c) 4 of the federal tax code has doubled. This led the IRS to centralize the review process in the Cincinnati office presumably to build expertise on the application process. Instead, low-level employees in the office developed a biased process which sought to make it more difficult for what they assumed to be conservative organizations.
The National Journal reported that Republicans reacted with outrage at the disclosure. "How were 'low-level workers in Cincinnati' able to initiate practices that completely undermine the IRS’s promise to treat all groups with an even hand?" said Senator Rob Portman (R-Ohio). "There can be no tolerance for the IRS being turned into a political weapon," asserted Senator Orrin Hatch (R-Utah).
The announcement of the improper handling of the applications supports the allegations made by many conservative organizations and flies in the face of IRS officials' prior denials. According to Talking Points Memo, in March 2012 former IRS Commissioner Douglas Shulman told a House Ways and Means subcommittee "There’s absolutely no targeting. This is the kind of back and forth that happens to people" who apply for tax-exempt status.
The screening process trains IRS agents to look for political activity that would make organizations ineligible for the tax exempt status. The process includes reviewing forms that requested information about family members, political activity, and social networking activity of members of the organization. It has also been alleged that the workers in the office asked the organizations to provide the names of their donors which may be illegal.
Portman has raised concerns about the collection of the information. "What were they hoping to do with the copious personal information they obtained from these groups?" proclaimed Portman. "The American people deserve to know who at the IRS learned about this unlawful activity, when they learned about it, and what they did, or did not, do when they did learned about it" exhorted Hatch.
The story couldn't end without laying the blame at the doorstep of President Obama. Jenny Beth Martin, national coordinator for Tea Party Patriots, declared "President Obama must also apologize for his administration ignoring repeated complaints by these broad grassroots organizations." In the Huffington Post, Sen. Mitch McConnell (R-Ky.) said "I call on the White House to conduct a transparent, government-wide review aimed at assuring the American people that these thuggish practices are not underway at the IRS or elsewhere in the administration against anyone, regardless of their political views."
White House Press Secretary Jay Carney has promised a full investigation. The Huffington Post reported House Majority Leader Eric Cantor (R-Va.), and the House Oversight and Government Reform Committee have also promised investigations.
No disciplinary action has been announced by the IRS. Fox News reports that the IRS feels the mistakes were a result of poor judgment but were not politically motivated.