IRS targeted tea party after granting tax status

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By STEPHEN OHLEMACHER, Associated Press

WASHINGTON (AP) — The Internal Revenue Service continued to target conservative political groups even after approving their applications for tax-exempt status, a key Republican lawmaker said Wednesday.

A May report by the IRS inspector general said the agency gave extra scrutiny to 298 groups when they applied for tax exempt status from the spring of 2010 to the spring of 2012. The vast majority of the groups — 248 — were conservative, while 29 were liberal and 21 were neither, according to an analysis by the Republican staff of the House Ways and Means Committee.

Of the 111 conservative groups that had their applications approved, 38 were flagged for additional monitoring, according to the staff review. Of the 20 liberal groups that had their applications approved, seven were flagged for additional monitoring.

The IRS acknowledged in May that agents had improperly targeted tea party and other conservative groups for additional, sometimes burdensome scrutiny when they applied for tax-exempt status. But the revelation that groups were singled out for even more scrutiny after receiving tax-exempt status will broaden the committee's investigation, said Rep. Charles Boustany, R-La., who chairs the panel's oversight subcommittee.

"That's a whole new line of investigation that we now have embarked on," Boustany said at a committee hearing Wednesday. "There could have been potential meddling in that examinations process."

After the hearing, the IRS issued a statement saying that while some groups had been flagged for additional scrutiny in the future, that monitoring never took place because the program was put on hold this summer.

"This means that none of them received special scrutiny," the IRS said. "This precautionary step was done out of an abundance of caution and to ensure a fresh, independent evaluation to determine if these groups needed review at a future point in time. We are continuing to assess the situation going forward."

The monitoring, known as a review of operations, would have fallen short of a full audit in most cases. Under the program, agents monitor groups to assess whether they are adhering to the activities described in their applications for tax-exempt status.

Acting IRS head Danny Werfel said all of the orders to more closely monitor tax-exempt groups have been rescinded while the IRS works to develop new guidelines.

"They are no longer on a path of potential examination at this time," Werfel said at the hearing. "That whole process is on hold."

The IRS has been under siege since May when agency officials acknowledged that agents working in a Cincinnati office had improperly targeted tea party groups for extra scrutiny when they applied for tax-exempt status. Shortly after the revelation, President Barack Obama forced the acting IRS commissioner to resign and appointed Werfel to run the agency temporarily.

In August, Obama nominated John Koskinen, a retired corporate and government turnaround specialist, to a five-year term as commissioner. Werfel continues to run the agency while Koskinen awaits Senate confirmation.

Three congressional committees and the Justice Department have launched investigations, and much of the leadership at the IRS has been replaced.

So far, congressional investigators have shown that IRS supervisors in Washington knew that applications by tea party groups were being delayed for months and even years. However, investigators have not publicly produced evidence that anyone outside the IRS ordered the targeting or knew it was happening.

The IRS has also released documents suggesting that progressive groups may have been targeted, too. House Republican investigators have been working to show that while some liberal groups were treated poorly, conservative groups were treated worse.

"Unfortunately, my friends on the other side of the aisle continue to frame this issue as a partisan one — as only affecting conservative groups," said Rep. John Lewis of Georgia, the top Democrat on the Ways and Means subcommittee. "Time and time again the facts have shown that both Republican-leaning and Democratic-leaning groups were singled out during the application process."

As part of their investigation, Ways and Means Committee staff have interviewed 25 IRS officials and are reviewing about 300,000 internal IRS documents, Boustany said.

Also Wednesday, the Republican staff of the House Oversight and Government Reform Committee issued a 19-page update of its investigation. Much of the memo detailed how Democratic politicians, including Obama, were publicly vilifying conservative political groups at the same time that IRS agents were targeting them.

The memo included excerpts of interviews with IRS workers who said they were aware of the publicity surrounding some of the groups.

Rep. Elijah Cummings of Maryland, the top Democrat on the Oversight committee, dismissed the memo.

"Unable to prove a link between the White House and the IRS conduct, Republicans now allege that President Obama and other Democrats sent subliminal messages through the media directing the IRS to target tea party organizations," Cummings said in a statement. "This latest partisan staff memo demonstrates that Republicans are grasping at straws. It's time for the committee to stop the political games and start working to restore the public's confidence in the IRS."

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