Lawmakers: IRS Targeting Scandal Went Both Ways

Editor’s note: Please see bottom of story for an update.

It’s a wrench in an already-complicated situation, but a wrench all the same.

More than a month after the firestorm began over the Internal Revenue Service’s admission that it had targeted conservative groups seeking tax-exempt status for greater scrutiny based on their names, information has surfaced suggesting that “tea party” groups were far from the only aspiring 501(c)(4) organizations being eyed. According to information released by congressional Democrats, IRS screeners also targeted liberal and progressive groups.

The information came to light on Monday in the form of an IRS status report  (opens in a new tab) [PDF] that blamed “both organizational and individual failures within the Internal Revenue Service” for the use of inappropriate review criteria and processing delays for applications from certain conservative groups. The report listed a number of solutions to the issues raised in the report.

Acting IRS Commissioner Danny Werfel, discussing the report, noted that there were additional “be on the lookout” (BOLO) lists in use when he took  over the IRS last month. The agency suspended the practice on June 12 and formally ended it on June 20  with an official written order.

“There was a wide-ranging set of categories and cases that spanned a broad spectrum,” said Werfel, the Cincinnati Enquirer reported on June 24.  (opens in a new tab) The lists, which were much broader than first reported, evolved over time to cover different types of political issues. Werfel noted that the criteria for the BOLO system was  “inappropriate,” but he declined to disclose other  target words.

However,  Democrats on the House Ways and Means Committee on Monday released lists of some of the BOLO phrases used. The list reportedly included words targeting liberal and pro-Democratic groups, such as “occupy,” “Israel,” “progressive,” and “medical marijuana.”

House Republicans on the committee released a statement suggesting that the targeting of tea party groups is more significant. “It is one thing to flag a group, it is quite another to repeatedly target and abuse conservative groups,” according to the statement  (opens in a new tab)  acquired by the Associated Press.

The scandal is far from the only issue on the agency’s plate. Earlier this month, Werfel faced congressional scrutiny over conference spending.

Update (June 28): Since this story was first published, Treasury Inspector General J. Russell George sent a letter  (opens in a new tab) [PDF] to Rep. Sander Levin (D-MI), saying that applications for tax-exempt status from progressive groups were targeted for scrutiny to a significantly lesser degree than applications from conservative groups. While groups with terms such as “progressive” or “occupy” in their name received extra scrutiny for their applications 30 percent of the time, George states that “tea party” groups received this scrutiny 100 percent of the time. “From our audit work, we did not find evidence that the criteria you identified, labeled ‘Progressives,’ were used by the IRS to select potential political cases during the 2010 to 2012 timeframe we audited,” George wrote. NPR’s Tamara Keith, however, notes that the letter  (opens in a new tab) “directly contradicts statements made Tuesday to NPR and a number of other media outlets by a spokeswoman for the inspector general.”

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