May 10th, 2013
12:53 PM ET
1 year ago

Following tea party complaints, IRS admits 'mistakes'

(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.


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.


Filed under: IRS • Tea Party
soundoff (312 Responses)
  1. Sniffit

    BTW, the only reason McConnell and Issa are referring to and demanding WH and IG investigations is because that's the first step: they then take whatever those reports say and conclude, claim it was a cover up, start sending out subpoenas, dig dig dig, hold hearings AND THEN when they turn up no evidence to support the accusations they want to make, they scream "cover up." You know, because lack of evidence supporting your claims is proof of the cover up.

    May 10, 2013 02:44 pm at 2:44 pm |
  2. lottie

    repos only interested in political organizations getting tax exempt status DM who cares what you think don't bother coming back to this site if it bothers you so much. McConnell and the tea party are incensed about something all the time anyway. So what's the big deal? Just another way for them to hide money.

    May 10, 2013 02:44 pm at 2:44 pm |
  3. Arch

    Tea Bagging is a terrorist occupation. they should face extra scrutiny.

    May 10, 2013 02:46 pm at 2:46 pm |
  4. Blah blah the wheel's off your trailer

    Ya'l lost the election. Get over it! Hillary by a LANDSLIDE in 2016!

    May 10, 2013 02:47 pm at 2:47 pm |
  5. Blah blah the wheel's off your trailer

    "BAN" IRS filing!

    May 10, 2013 02:48 pm at 2:48 pm |
  6. Finrod

    Arch: Tea Bagging blah blah blah blah

    Why do you hate gays, Arch?

    May 10, 2013 02:49 pm at 2:49 pm |
  7. Liberal Sense (Or lack thereof)

    Arch

    Tea Bagging is a terrorist occupation. they should face extra scrutiny.
    --–
    You libs talk about Tea Bagging so much it must be your favorite pastime.

    May 10, 2013 02:49 pm at 2:49 pm |
  8. @

    Is anyone really surprised about this info?

    May 10, 2013 02:49 pm at 2:49 pm |
  9. John The Electrician

    Must be hard to get one of those 3 cornered hats up there.

    May 10, 2013 02:49 pm at 2:49 pm |
  10. tibs

    The fact that the government taxes our labor, our productivity, is a disgrace.

    If I had a slave and kept everything he produced, then one day decided to let him keep half of what he produced and made him give me the other half, is he still a slave?

    May 10, 2013 02:50 pm at 2:50 pm |
  11. Finrod

    So when are all the leftists that claimed that the Tea Party types just had a persecution complex going to apologize for being completely, utterly, and abjectly wrong?

    Yeah, when Hades freezes over, like usual. Leftists never admit they're wrong.

    May 10, 2013 02:50 pm at 2:50 pm |
  12. duane - st.pete FL

    the tea party and those in it love America and are great American's. you pigs who slam them are the tards.....just like libs to say they accept everyone (what a joke) when they would for sure be more the SS type who would shut down or silence and other veiws that differ from thiers....sick bunch....thanks goddness we have the guns...:)

    May 10, 2013 02:51 pm at 2:51 pm |
  13. WMesser58

    Well I never thought I would of agreed with the "IRS" but it wasn't political it was because they inept and incompetent. When I took money out of a stock that wasn’t performing all that well they took every dime even though I provided evidence that they should not have taken 100% but they did anyway and no one polices or does anything to them so you pay or they punish what a great system they have for not being accountable for anything but, just to admit they were wrong. If you did you would be serving a prison sentence.

    May 10, 2013 02:51 pm at 2:51 pm |
  14. rs

    Anti-American groups shouldn't receive tax-excempt status. The IRS was on the right track.

    May 10, 2013 02:51 pm at 2:51 pm |
  15. Sniffit

    "We don't use the government to silence our political adversaries."

    There's no evidence that was what happened. Maybe there will be, maybe there won't be, but that doesn't change the fact that all we know so far is that a couple of low level employees took it upon themselves to do this.

    May 10, 2013 02:51 pm at 2:51 pm |
  16. buckeye

    Move along people, there's nothing to see here. Just ignore the man behind the green curtain.

    May 10, 2013 02:52 pm at 2:52 pm |
  17. Liberal Sense (Or lack thereof)

    Democrats should be taxed extra just for having ZERO common sense

    May 10, 2013 02:52 pm at 2:52 pm |
  18. sly

    Ho ho ho ... if a racist Republican receives chicken instead of beef at McDonalds, it's the Presidents fault.

    Y'all TeaBillies are hilarious, and there is nothing like a sore LOSER to make winners laugh at you.

    Keep it up! Hey Republicans – I thought y'all seceeded from the United States – what are you still on here blogging on an American website. Now, you little infestations – scatter.

    May 10, 2013 02:52 pm at 2:52 pm |
  19. tom

    Another fiasco brought to you courtesy of the "most transparent administration in US history."

    May 10, 2013 02:52 pm at 2:52 pm |
  20. rob

    "The IRS said it saw the number of applications seeking such status double from 2010-2012. "

    I wonder how many of those were left leaning groups????? How come they have not spoken out about this unfair treatment ?????
    Answer: They were not subjected to this illegal and corrupt handling by the IRS, therefore they have nothing to complain about.

    CNN...your headline on the front page was Opps ????? What the hell is going on witn the Media in this country. If they don't start calling all these scandles for what they trully are, they will eventually be the targets of the Democrats Political Machine and be powerless to stop it.

    May 10, 2013 02:53 pm at 2:53 pm |
  21. Liberal Sense (Or lack thereof)

    And the IRS will be handling the illegal ObamaCare taxes?

    May 10, 2013 02:53 pm at 2:53 pm |
  22. rs

    Wow , what a bunch of evil, small minded comments, just because you "liberals" don't agree with someone else's political beliefs. You ought to change the name of your party to the "me only" party. And the comments about corporate welfare? These are tax exempt organizations. I would bet you bleating sheeple would have your panties in a bunch if a Republican administration went after multiple tax exempt organization. Just evil inking to believe this ok for rither party. Liberals can never just say flat out "This was wrong. I apologize."
    ________________________
    It has nothing to do with the TEA Party's politics and everything to do with their treasonous, anti-American actions.

    May 10, 2013 02:54 pm at 2:54 pm |
  23. jed clampett

    Based upon their eligibility I am assuming the Klan is also a 501(c)(4).

    May 10, 2013 02:54 pm at 2:54 pm |
  24. bob

    If you are involved in politics, you shouldn't get tax exempt status. These tea party groups are obviously all about politics.

    May 10, 2013 02:55 pm at 2:55 pm |
  25. rs

    See America, THIS is what happens when you elect a half black man as POTUS..... The fact that his mother was white is of no consequence. I now know there will NEVER be a POTUS with two black parents.
    ___________
    Well, this is about TEA Partiers, so your racism is expected.

    May 10, 2013 02:56 pm at 2:56 pm |
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