IRS targeted tea party after granting tax status

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.

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.

An investigation by the House Ways and Means Committee has uncovered evidence that IRS agents also subjected conservative groups to special scrutiny after they were granted tax-exempt status, said Rep. Charles Boustany, R-La., who chairs the panel’s oversight subcommittee.

Speaking at a committee hearing Wednesday, Boustany said the vast majority of groups subjected to special monitoring were conservative. The monitoring, known as a review of operations, fell short of a full audit in most cases. Instead, agents monitored the groups to assess whether they were adhering to the activities described in their applications for tax-exempt status.

“The committee has discovered that among the hastily approved applications for exempt status in the early summer of 2012, a large number were flagged for IRS surveillance by Washington,” Boustany said. “Of those flagged, more than 80 percent of the groups were right-leaning.”

Acting IRS head Danny Werfel said all of the orders to more closely monitor tax-exempt groups have been rescinded while the IRS works to develop new guidelines.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

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.”

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 Ways and Means Republican staff, who have access to confidential taxpayer information.

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