(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.
Anyone believe these right wing tea party groups are organized for social welfare purposes which is a requirement for tax exempt status? They are just about the polar opposite of social welfare, and they should all be audited.
This kind of garbage has gone on since Washington was president. The party in power abuses their authority until the party in charge changes and then it switches to the other side. The real problem is with the idiotic 2 party system. With an unlimited "official party" pool, people would be better able to find a political party that actually represents them. I know far too many people that are blindly loyal to one party or the other without regard to what their party of choice is actually doing. Thomas Jefferson was right – every 20 years round them up and get rid of them.
I'm a liberal, but if the IRS targeted conservatives, that's wrong. The article did not go into whether liberal organizations got the same massive paperwork and backlogs. Would be interesting to find out.
The Real Tom Paine
As far as Benghazi is concerned, i've never see a portion of this country get so much joy out of the deaths of 4 people as the FOX followers have over this. Its a sad state of affairs when you regard this as the high point of your day.
We are not happy, in fact very unhappy about it. THATS why we want to find out the TRUTH about what we knew and why we didn't try to stop it. And all the lies about it after the fact, WOW. We want the truth for the victims, you want to keep it covered for the sake of the current admin.
I'm so sick and tired of the right wing childish garbage, I'm going to ask my local representatives to work towards hearing on the illegitimate Iraqi war and the missing WMDs, on why the Afghhan war was abandoned and prolonged for the invasion of Iraq and on Bush/cheyney's failures to protect our mainland and the American people from the 9/11 attacks! I believe the American people and the families of the deceased and wounded are still awaiting answers after a decade!
Why should radical right-wing hate groups receive tax-exempt status anyway?
I would agree that what the IRS did was wrong, regardless of how loathsome I find the Tea Party. You can't argue for equal rights and support state-sponsored harassment and discrimination. The law applies to everyone equally or we're all in trouble. Personally, I don't think political groups should be tax exempt AT ALL, be they liberal or conservative. But as long as the law permits it, all applications for tax exempt status should be handled the same way.
Smaller government means fewer IRS workers means longer processing times. Careful what you ask for, Tea Party.
I have an idea, lets fire some of these government employeees that want to play politics instead of serve the people. Top notch pay and benefits, but that's not good enough? Got to grind a political axe during working hours? Get a different job.
Who'da thunk it? There's dozens, maybe hundreds or even thousands, of separate Tea Parties.
Obama is taking after Richard "Tricky Dick" Nixon who also used the IRS (U.S. Gestapo?) as his personal goon squad.
Can you be against big goverment and for a balanced budget with out being a Neo-Nazi?
Reading these boards makes one wonder if there are any rational thinking moderates left in the US.
Tea Party are busy little bees trying to figure out ways to NOT pay their fair share.
Nice. Real nice.
You libs are tearing this once great nation down to the gutter. Shame on you and your Un-American ideology.
If there were liberal groups targeted as well, you can be sure CNN would bring that out. And why is she "not comfortable" speaking about the timing of whom knew what? Because the timing is so coincidental with regard to last year's election. Somebody needs to be made real uncomfortable over these shenanigans. The people who did this are the same people who come on here and comment about the "retarded Teabaggers should not be allowed to exist".
To many people, there is nothing more important than their own opinion. You know, its all about "me" kind of folks. You know what they say about opinions. we do not need opinions FROM GOVERNMENT EMPLOYEES, we need honest hard work, or we need different employees.
The people posting on here can't be as dumb as they seem. Whatever side you are on, it IS a big deal if the power of the IRS is harnessed to harass groups because of their political preferences. The questions were not only harassing. They were meant to silence potential critics and collect intel on them (questions inlcuded how members were recruited donor lists, names of other family members, etc.).
Obama defenders: stop pretending that you just can't possibly imagine a world where low level employees were directed by higher ups. Additional news flash for you: the false narrative of the Benghazi attack being due to a youtube video was also not orchestrated solely by low level WH and State Department employees.
So you are telling me that every group of whitless populists wanting to 'band together' deserves to be handed tax exempt status or it isnt fair? Isnt that the same kind of excessive political correctness that conservatives rag on liberals for? Its called standards....meet them or prepare for reality to give you an uppercut
501(c)(4) tax exempt status should be done away with. Remove it from the IRS Regulations.
Once again Liberal Progressives once again prove they are more likely to infringe on an individual/groups rights when that individual/group doesn't share their view of the world. Like many past Dictators/Fascists Liberals can be awful high and mighty has they crush the rights of those they don't agree with.
Big shock. Tea partiers trying to get out of paying taxes, but call themselves "Patriots" I doubt their organizations are doing anything to help their communities. Big pile of BS.
It seems lately that this Administration doesn't feel people need to know the truth or have rights if they aren't a Liberal Progressive.
yeah...BP was low lecel workers making decisions too- what happened to the CEO. We hold CEO's responsible for 'low level' decsisions. SOooooooooooo...who is running the country and making decisions.....hmmmmm.....low level employees. Funny how that works out for the fat fellas at the top. Welllllllll...why do we vote Harvard and Ivy League school grads into office when the guys making decisions, somehow united, are public school employees. Too confusing.
Benghazi...low level guys DID make it to Benghazi to attempt to save their fellow Americans and gave their lives while the top level guys could not figure out how to get people there and decided to just do nothing. Looking like the 'can do' guys are underpaid- on the backs of the common man. That is why it 'isn't a big deal' when the low level guy gets popped. Low level guys are a dime a dozen...a bakers dozen at that I suppose.
@ Donkey Party – Why should radical left-wing hate groups like MoveOn.org receive tax exempt status?
The IRS will soon have everyone's health records, they have everyone's financial records. They are accountable to no one. They already do what they want when they want. American citizens have lost their process off justice. With the IRS you are guilty until you prove your innocence. There is a better way of taxation! Many companies in other countries will not do business in the US because of fearing the IRS. Why don't they have to abide by the same laws as all US citizens? The people who abused their power should be fired and the people who were targeted unfairly should get the best civil rights lawyers they can find and file lawsuits against those IRS employees – personally! USA should be embarrassed of such pathetic behavior by public officials.
In what way are these groups organized for social wellfare?