(CNN) - Responding to a flurry of complaints from conservative groups seeking tax-exempt status, the Internal Revenue Service admitted Friday it made "mistakes" in the last few years while trying to process those requests.
Multiple tea party groups reported significant delays and excessive questioning from IRS officials while trying to obtain 501(c)(4) status.
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While the groups and conservative members of Congress cried foul, the agency strongly contests the notion that groups were targeted out of political bias.
Lois Lerner, director of tax exempt organizations for the IRS, said on a conference call Friday that the IRS office in Cincinnati that handles most applications for 501(c)(4) status had seen a strong uptick in applications of 1,500 to 3,400 between 2010 and 2012.
Any applications that were incomplete, lacked consistent information, or indicated a group would be involved with some type of advocacy, were filed into a certain group for further review.
However, approximately 75 of the 300 groups that were filed for further review were simply filed because they had the names "tea party" and "patriot," Lerner said.
"They did pick the cases by names and that's absolutely inappropriate and not the way we should do things," she said, though stressing it was done as a "shortcut," not out of "political bias."
Lerner did not disclose what the remainder of the 300 groups had in common, or whether they had any political affiliations. She repeated that they ranged across a "broad spectrum" of groups and did not release any names.
"It was an error in judgment and it wasn't appropriate," Lerner said. "But that's what they did."
The AP first reported Friday's IRS admission, when Lerner answered a question about the issue at a conference in Washington. The IRS later held the conference call with reporters.
Groups applying for tax exempt status are allowed to do advocacy, so long as their primary activities are dedicated to "social welfare," according to IRS rules. When an advocacy case is filed for further review, the IRS tries to determine if the group plans on sticking by that calculus.
However, when the IRS employees were seeking to make that determination, Lerner admitted they went too far.
"Some of the letters were far too broad," she said, adding that some asked for donor lists. "When this came to my attention, we took some action to try and undo some of these things."
See a sampling of a questionnaire (provided by The American Center for Law and Justice).
When Eric Wilson, executive director for the Kentucky 9/12 Project, filed for not-for-profit status in December 2010, he was told he'd receive a response within 90 days. What he received instead was an inquiry with a total of 88 questions asking for what he describes as "far reaching information."
They wanted membership lists and detailed information about directors of the group, such as their private activities outside the organization, he said. They also requested copies of pages on their website and social media accounts, such as Facebook and Twitter.
To comply with every request, Wilson said it would have required 5,000 printed pages. "They were trying to bury us in time and money," he said.
Wilson responded with a one-page letter, saying the questionnaire was beyond normal requests and they would not comply. He started noticing posts online and through contact with like-minded conservative groups that they were receiving similar questions from the IRS.
Last month, on April 1, Wilson finally received his approval letter from the agency in a 200-word letter, simply stating they had been designated a 501(c)(4) organization with no explanation for the delay.
While Wilson described the IRS' comments today as a "victory for free speech and liberty," he still wants more questions answered and called for further review.
The issue began getting national attention, with members of Congress weighing in and legal groups fighting on behalf of the conservative groups. In March 2012, a dozen U.S. senators led by Sen. Orrin Hatch, R-Utah, and Sen. Rob Portman, R-Ohio, sent a letter to IRS Commissioner Douglas Shulman asking for more information about this situation.
The American Center for Law and Justice in Washington represented 27 of the groups and lobbied for action to be taken on the matter.
"The IRS admission and apology should have come much sooner," Jay Sekulow, Chief Counsel of the ACLJ, said. "It took the threat of legal action to get the IRS to make this admission. And while many of the organizations we represent have finally been granted tax-exempt status, we demand the IRS to immediately approve the pending applications for the remainder of our clients."
Tom Zawistowski, executive director for the Portage County TEA Party who helped lead the then-Ohio Liberty Council, also experienced difficulty for three years and worked with the ACLJ. He said Friday the apology was "appropriate."
"I think it was without doubt wrong. We knew it was wrong in the beginning," he said. "They had no right, whatsoever,...no right to deny us tax exempt status that 501(c)(4) groups routinely received."
Zawistowski said he has a four-inch thick binder of stuff they were asked to send, including speakers lists and printouts of every page from its website and Facebook page, every tweet.
Click here and here to see the questionnaire sent to Zawistowski.
He also refused to comply. Zawistowski applied for the status in June 2009 and received final confirmation on December 22, 2012.
In an appearance before the House Ways and Means Subcommittee on Oversight in March 2012, Shulman was asked about the controversy. Rep. Charles Boustany, R-Louisiana, asked if it was true the IRS was politically targeting conservative groups.
"Yes, I can give you assurances. We pride ourselves in being a non-political, non-partisan organization," he said. "There is absolutely no targeting. This is the kind of back and forth that happens when people apply for 501(c)(4) status."
Reaction to the IRS' admission was swift. House Majority Leader Eric Cantor announced Friday the House would investigate the matter, saying in a statement "the IRS cannot target or intimidate any individual or organization based on their political beliefs."
Senate Republican Leader Mitch McConnell called on the White House to conduct "a transparent, government-wide review" to ensure similar practices weren't being carried out at other agencies.
McConnell, who called an apology from the IRS insufficient, deemed the IRS tactics "political thuggery" with no place in American politics.
"Now more than ever we need to send a clear message to the Obama Administration that the First Amendment is non-negotiable, and that apologies after an election year are not an sufficient response to what we now know took place at the IRS," McConnell wrote in a statement.
The left-leaning American Civil Liberties Union also called out the IRS.
"Even the appearance of playing partisan politics with the tax code is about as constitutionally troubling as it gets," Michael Macleod-Ball, chief of staff at the ACLU's Washington legislative office, said in a statement. "With the recent push to grant federal agencies broad new powers to mandate donor disclosure for advocacy groups on both the left and the right, there must be clear checks in place to prevent this from ever happening again."
Tea Party groups were similarly incensed. The Tea Party Patriots, one of the nation's largest, rejected an IRS apology and insisted on resignation from the officials involved in the targeting.
"The IRS has demonstrated the most disturbing, illegal and outrageous abuse of government power," wrote Jenny Beth Martin, national coordinator for Tea Party Patriots, in a statement. "This deliberate targeting and harassment of tea party groups reaches a new low in illegal government activity and overreach."
Meanwhile, two Republicans on the House Oversight Committee, Chairman Darrell Issa and Rep. Jim Jordan, wrote in a joint statement, "The fact that Americans were targeted by the IRS because of their political beliefs is unconscionable. The Committee will aggressively follow up on the IG report and hold responsible officials accountable for this political retaliation."
The Democratic chairman of the Senate Permanent Subcommittee on Investigations, Sen. Carl Levin, also said an investigation into the matter was required.
Treasury Spokesman Anthony Coley said his department would "fully support the IRS Inspector General's review of this matter."
"The Treasury Department expects all individuals and organizations to be treated fairly by the IRS. Anything less is inappropriate and unacceptable," Coley said.
Jay Carney, President Barack Obama's press secretary, said Friday the IRS' actions were "inappropriate."
"We would fully expect the investigation to be thorough and for corrections to be made in a case like this," Carney continued. "And I believe the IRS has addressed that and has taken some action, and there's an investigation ongoing."
Of the 300 groups that were filed for further review, 130 have been approved, 180 are still in process and about 25 are under review, Lerner said.
Asked when the IRS began looking into complaints, Lerner said she could not give a time frame. Pressed further on when senior IRS officials became aware of the situation, Lerner said she "did not feel comfortable answering."
Lerner said they have implemented changes to prevent similar mistakes in the future. When asked if there has been disciplinary action, Lerner said "No." Attempting to clarify later, she said she meant to say she wouldn't comment on personnel issues.
Tea party groups want tax exemptions. Why don't they pay their fair share of taxes before complaining. Kinda like Romney giving to the Mormon church for tax exemptions who then turned around and donated money to him.
Corporate welfare for the rich..... But the 47% are the leeches. What a pathetic group of wackos.
Oh, dear. The ficitious Tea Party whines and all America (including our MSM) stand at attention and salute.
This TP tribute (and salute) is getting to be a real problem in America. Don't believe me? Just look at how disfunctional our media and our Congress have become kowtowing to these grassroot millionaire lobbying TP manipulators.
Nice Friday stealth news dump, IRS.
The MSM will run a handful of tiny perfunctory articles and that will be it.
If this had happened during the Bush years versus liberal groups we'd never heard the end of it.
Bwahahahaha...someone needs to tell the Teatrolls that being predictable is actually a weakness. They're now demanding a personal apology from Obama himself...despite the fact that this was a few low-level workers acting like idiots...and McConnell is demanding a government-wide investigation and hearings, conflating the incidents into a widespread attempt by Obama to intimidate political opponents/opposition and destroy the 1st Amendment.
And yes, of course McConnell used the word "thug"...how could he not throw in the dogwhistles when he knows his base so well?
The conservtive gop clowns like romney the tax cheat are always looking for the free ride , no taxes no regulations no health care for Americans less fortunit the themselves , if you don't like our goverment , get the hell out because we don't like you . Go to somila where you have the same values , and I heard they give you free guns,gop teaparty morons , by the way ,the gop is going to lose the house and senate in 2014 mid terms ,you heard it here first , 90% of Americans dispise you and what you representlosers!!!!
Excessive questioning? Does that mean more than one question? Since the Tea Party groups seem to have been absorbed by these shadowy organizations, the IRS has every right to examine them, the same way they look at unions or any left-leaning non-profit. Talk about playing the victim card....
Add a little more of what was said by the IRS.
The Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status, a top IRS official said Friday.
Organizations were singled out because they included the words "tea party" or "patriot" in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups.
In some cases, groups were asked for their list of donors, which violates IRS policy in most cases, she said.
So the tea party is trying to get something free from the government?
That can't be true.
Say it's not true!
more sequester for the irs...
Oh the faux outrage over nothing again.
Regardless of political affiliation, Democrat, Republican, other, when the IRS is being used as political weapon we are ALL in trouble.
Hate to see what is going to happen when they start being ObamaCare enforcers.
"So this is how liberty dies... with thunderous applause."
They should thank the IRS. It provided yet another opportunity for them to feed their ridiculous persecution complex. Great bumper sticker. "Freedom isn't free, so stop whining and pay your taxes!"
They manage to downplay their political activities, by blaming it on the volume? What does that say, if the volume was really that great??????
"Organizations were singled out because they included the words "tea party" or "patriot" in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups.
In some cases, groups were asked for their list of donors, which violates IRS policy in most cases, she said."
Except you cherry-picked and left out that it wasn't the written policy or the rules to be doing that, wasn't somehow "ordered by mysterious Obama conspiracy agents higher up in the chain of command" and it wasn't how the process was designed or intended to work. It was low-level employees doing something they shouldn't have been doing. They centralized the processing of the 501(c)(4) groups in Cincinatti, hoping to make it cost less and be more efficient, so the couple of goons who thought they'd flag everything like that managed to get their hands of a lot of them and screw up the process.
"The MSM will run a handful of tiny perfunctory articles and that will be it."
Not even close. The GOP/Teatrolls will conflate this into a pervasive dictatorial conspiracy by the Kenyan muslim socialist Marxist communist political agitator in the WH and the MSM will run with it, failing at every turn to do thorough research or question any accusations thrown at Obama and the administration so that the controversy can be perpetually sensationalized as Issa and the House GOPers/Teatrolls demand show-trial hearings over it. Watch.
Don't you fools in Washington have some jobs to create??? All this political finger pointing is really getting old. Get your act together and do you jobs!!
Yet another example of the Obama administration using the federal government to harass and attack political opponents. Or is it just more incompetence? That also is very abundant in this administration. Wake up America. Leftists have taken over the government. It won't belong before we are Cuba.
Sympathy is lost on me.
People claiming Obama is a "leftist" or "socialist" have absolutely no idea about which they speak. Go take some civics courses and learn the terminology before attempting to engage in grown-up discussions. Obama is the right of Ronald Reagan.
No surprise here! ACORN and Chi-town politics!
Look where this article is stashed away.
And on top of that look at what was left out.
The IRS actually admitted to singling out specific conservative groups. A quote from a "reliable news source was":
"...Lois Lerner, who heads the IRS unit that oversees tax-exempt groups, said organizations that included the words "tea party" or "patriot" in their applications for tax-exempt status were singled out for additional reviews."
Not going to see that "little detail" covered on this network.
Good to see that media bias is alive and well...
No taxation without representation would also mean no representation without taxation. Why are these groups exempt? Pay your taxes, freedom isn't free!
Whatever we can do to eradicate the Tea Party is a good thing. I wish it was intentional, but alas, just the IRS doing their normal business.
I thought the Tea Partier's all seceeded from the United States – does this mean we're still infested with them?
Oops... that's it? This is a 1st amendment violation. Imaging if the Bush administration would have done the same for "liberal" or "OWS" the outcry would be nonstop. Just another example of media giving a pass to the Obama admin on a very serious matter.