May 10th, 2013
12:53 PM ET
10 years 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.

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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, 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. Keys1

    Arch are you as ignorant as you sound, apparently so.

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

    Why do liberals refer to the tea party folks as tea baggers? I thought liberals were tolerant and respectful of othere opinions. Just goes to show you who the party of hatred is. Everytime you hear that term being spewed by a vile lefty, the liberal community should shun those folks, but i suspect the reason they don't is because they are just as vile and disgusting. Liberals really need to get a life and grow up. No wonder your current president is just as petty and weak minded. what a pathetic party

    May 10, 2013 02:56 pm at 2:56 pm |
  3. child of midian

    I call on old McConnell to remove his head from his anus and say any organization that is not pure charity pay taxes!!!!

    May 10, 2013 02:57 pm at 2:57 pm |
  4. Robert

    This is exactly what needs to happen. We need to leverage the government even more to discourage the neo-cons from getting stronger. We need to make sure that they are stopped, and slowed at every opportunity. I greatly encourage our government doing this. I don't think CNN should be carrying this story. It brings attention to something that needs to be kept a little more quite.

    May 10, 2013 02:58 pm at 2:58 pm |
  5. Canadian John

    And this is the organization you folks are going to trust the administration of your health care too. Wow just Wow

    May 10, 2013 02:59 pm at 2:59 pm |
  6. Larry in Houston

    it's too bad that we've got so many radical right wingers on these blogs – used to be , we only had to put up with people like 4 & the door – + a few others – but unfortunately, they must be coming out from the wood work, or something. Maybe they are coming IN from Fux News or somewhere.

    May 10, 2013 02:59 pm at 2:59 pm |
  7. chachabrown

    I heard it was because of a really mean anti-islamic you-tube video, right CNN?

    May 10, 2013 02:59 pm at 2:59 pm |
  8. brotherjukebox2012

    what else would you expect from this administration

    May 10, 2013 03:00 pm at 3:00 pm |
  9. MG

    The problem with all this noise is that it doesn't matter if these groups have tax exempt status or not. The impact on the organization is only a benefit. These groups should be organized enough to not pay any taxes regardless of their status. If the Obama administration wanted to punish them, there are far more effective ways that draw far less attention than this.

    May 10, 2013 03:03 pm at 3:03 pm |
  10. Sniffit

    " that apologies after an election year are not an sufficient response to..."

    ....election results affected by widespread efforts to grossly attenuate voter turnout from minority and urban demographics.

    Do you really want to go there, Beaker? We can if you'd like.

    May 10, 2013 03:05 pm at 3:05 pm |
  11. qs

    More like – Citizens United was judicial thuggery!

    May 10, 2013 03:06 pm at 3:06 pm |
  12. jccomplib

    I appreciate the irony that the influx of Tea Party groups forced the IRS to expand its budget and hire more employees.

    May 10, 2013 03:06 pm at 3:06 pm |
  13. Green Oak

    I can somehow see Obama's nicotine stained fingers in this.

    May 10, 2013 03:10 pm at 3:10 pm |
  14. ohiopgr

    Tea Party is a smoke screen to undermine our government, and the most the most un-American group since the fall of Communism – it is a failed attempt to replace it.

    May 10, 2013 03:11 pm at 3:11 pm |
  15. Hamburger Jones

    I think the teabaggers are a terrorist group whose goal is to kill the president, and I fully support having them investigated slowly and with great care. They intended to complain about the IRS no matter how it worked out, and the IRS was protecting itself.

    May 10, 2013 03:11 pm at 3:11 pm |
  16. lttlejohn

    I lmao at this one. Even before I got to the McConnell part, I knew the repugs would be crying conspiracy. I will be sad once the neocons drift into obscurity, they have been quite entertaining at times.

    May 10, 2013 03:11 pm at 3:11 pm |
  17. mountainlady

    Tea Party on the wrong side of the IRS? Best news I've heard in years.

    May 10, 2013 03:12 pm at 3:12 pm |
  18. j_lebowski

    under oders of the ofailure administration no doubt

    May 10, 2013 03:12 pm at 3:12 pm |
  19. James and Peg

    Imagine if they did this to the Lib movie stars in Hollywood....especially if Bush was President.

    May 10, 2013 03:13 pm at 3:13 pm |
  20. ohiopgr

    The Tea Party is another failed un-American organization like the McCarthy era politics. The Tea Party warrants scrutiny, along with the political organizations of the evangelical churches that are not suppose to be politicking from their pulpits and church groups. Their tax exempt statuses should be nullified.

    May 10, 2013 03:14 pm at 3:14 pm |

    OMG. They admit abuse of govt power and only offer an apology. WOW,WOW and WOW. hmmmmmmm, whos in charge again? Oh yea, I remember now.

    May 10, 2013 03:15 pm at 3:15 pm |
  22. The Other Bob


    Why are political organizations getting tax exempt status is the real question.
    Precisely. And those who are bleating that this wass a politically-motivated move by the Obama administration, how about some evidence that this was perpetrated by anyone above one local office?

    May 10, 2013 03:17 pm at 3:17 pm |

    Arent you ppl bashing here missing the point? Dont you ppl see the abuse that can be turned in ANY direction??? I really really dont understand how you cant be offended or worried.

    May 10, 2013 03:17 pm at 3:17 pm |
  24. SCBAMA

    Wow..the comments from liberals are mind boggling. How can any American citizen justify this kind of behavior from our government? You can't. No wonder so many are fighting for their 2nd Amendment rights. Considering the justification of the IRS action by liberals they just may need to be armed. You folks are no better than that little dictator in North Korea.

    May 10, 2013 03:18 pm at 3:18 pm |
  25. cedar rapids

    You know Pritch, you kind of shoot yourself in the foot when you make a claim about the liberals being the party of hate and then go on to spout a hate filled post about them.

    May 10, 2013 03:18 pm at 3:18 pm |
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