(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.
However, approximately 75 of the 300 groups that were filed for further review were simply filed because they had the names "african american" and "black," Lerner said.
Would anyone believe it if the story read like this?
The thing with the irs is that far too manykneegrowswork there. If thekneegrowscan be culled a bit, for their own good of course, they'd be very happy.
Republicans are such whiners. If you want to talk about corruption and abuse of power we can talk about Nixon's enemies list.
Its bad enough that many churchs get non profit status when they are most definitely involved in politics and openly push for one party (mostly GOP) but now even Tea Party organizations which are nothing but the GOP base are allowed non profit status? Wow I would hate to see the organization they actually deny for being political.
You mean the organization that collects taxes mistreated a group of people who are anti-taxation? Impossible!
We need an independent special prosecutor investigation. This is a terrible thing.
The Democrats openly campaign in church pulpits.
SkyTag. We can talk about Nixon but did or did not Obama run on changing actions in Washington? This approach to silence ones political enemies makes Obama look no different than Nixon.
Asdf. Unions and other groups such as Planned Parenthood also have tax-exempt status. You are just admiting to bias if you only want to highlight one side and not the evils on the other side as well. Also, someone posted a bit back, if you want to review and attack one side then you have to review the ones you like and favor as well.
Good reason for the fair tax.
The most transparent administration in history is at it again.
We're sorry we abused the power of the fed govt against honest opposition groups, and we're sorry we've wasted so much of your money, and we're sorry we lied about Fast and Furious and we're sorry we lied about Benghazi, and we're sorry we lied about loans to energy companies but we had to do it to get re-elected. We can assure you it will not happen again until we approach the 2014 elections.
Seems funny not one liberal group received the same treatment!!!
I seem to remember a few years back( oh ya during the 2012 election) when this issue first came to light, the media and D.C. down played the complaints, an now it`s news. i`m guessing BO needs a distractor to divert attention from the Benghazi story. Those in the IRS that were involved in selectively targeting conservative groups and asking for donors lists should not be reassigned but, not fired, but put on trial for violating federal policies. If it were any other party their heads would have rolled all ready. I can harddly wait to see just how transparent the current administration really is.
I have yet to hear a con get angry because the same thing happened with Occupy groups. The only difference is one is advocating a violent attack on the government and the other is not.
The tea bag party was started by corporations and should be investigated before they get tax exempt so they are not used to launder money.
ASDF- : You seem to be over looking the Al Sharpton the so called Rev Jessie Jackson and others withe the political tendencies, and the many churches that the Obama family has attended
Time for a Congressional inquiry.
Government doesn't exists without the private sector making payments. For every dollar the limited pool of actual taxpayers pay the government, the government in turn spends the dollar plus another 30% (debt). Hey, let's keep giving them money.
House Republicans say a hearing will be held on the IRS after the tax-collecting agency acknowledged that it targeted conservative political groups during the 2012 election. Now of course DEMOCRATS are silent. Corruption is perfectly acceptable to them. Now the real question . Why and how is this in the political section and not FRONT PAGE NEWS? CNN always protecting Obama.
Soooo the democrats always accuse republicans of repressive voting legislation but they instead tamper with the IRS. So noble the liberal is,
So who got fired, and what jurisdiction are they going to be prosecuted in? Anything less is an insult to U.S. citizens of all political persuasions.
Just what we needed. Another Obama administration scandal. I'll have to give them credit for consistency. They are once again blaming low level staffers, swearing no high level people knew anything. Fast and Furious-Gate, Benghazi-Gate, now IRS-Gate. I wasn't thrilled with GW, but this is getting to be rather pathetic. And now the media will once again say....no big deal.
Corrupt administration. How much proof do we need?
@skytag,one on top of Nixons list for supposid assasinating was Tedd Kennedy who had talked about running the next year for president..Nixon knew if Ted ran his time was over...
@ ed dugan, 5/10 2:12 pm- if the rich have IQ's less than their Hat size, What IQ does the rest have? I smell Jealousy.
There should be no such thing as tax exempt status. These groups are probably just shell corporations. The money funds corruption not social welfare. The taxpayers are the losers
Mistakes? Yes like other criminals make mistakes.