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. sly

    I support the harassment of non-Americans with terrorist-leaning tendencies, so all power to the IRS!

    This is an example of what we should do to this neo-terrorist organization. Harrass them, spit on them, arrest them falsely. Put the whole white troll crowd in Gitmo and throw away the key.

    May 10, 2013 03:20 pm at 3:20 pm |
  2. Anonymous

    This is absolutely crooked. It doesn't matter if you like the Tea Party of not, if the IRS can deliberately threaten a group of people, they can threaten anyone they want to. That is extremely wrong and dangerous.

    May 10, 2013 03:21 pm at 3:21 pm |
  3. Andy

    This is absolutely crooked. It doesn't matter if you like the Tea Party of not, if the IRS can deliberately threaten a group of people, they can threaten anyone they want to. That is extremely wrong and dangerous.

    May 10, 2013 03:21 pm at 3:21 pm |
  4. Liberal Sense (Or lack thereof)

    Democrats are literally the party of hate. Proof is all around you.

    May 10, 2013 03:22 pm at 3:22 pm |

    No accountability anymore in our government. Even here on CNN they report the writing on the wall.. Sad sad times for the USA.

    May 10, 2013 03:22 pm at 3:22 pm |
  6. craig

    Well, on one hand if anyone knows about "political thuggery" it would be Mitch. I think he's actually the leader of that group, along with Boehner. "We can't win on an up-down vote so we simply won't ever allow one to happen...about anything!"

    On the other hand, the IRS admitted that they didn't operate perfectly. During W's term the administration never, ever made a single mistake, and W told us that...several times. "Mission Accomplished" would seem to have meant that the WMD's were located and Saddam was facing Justice. Whoops. Oh for two on that, but they never made a mistake.

    Ah, to be the GOP and be perfect. LIkely they don't even have hemorroids.

    May 10, 2013 03:23 pm at 3:23 pm |
  7. CNeder

    O wonder if the IRS will 'Ooops' on the Nation of Islam, the Black Panthers, or any of the democrat leaning groups?

    May 10, 2013 03:23 pm at 3:23 pm |
  8. notaxexampt

    I suggest we do not have any tax exempt groups.

    May 10, 2013 03:23 pm at 3:23 pm |
  9. Walter

    Spin away little libbies, spin away. Between Benghazi and this, you can try to deflect this all you want, you'll still be crying "Wah, Wah, Wah," all the way home!!!

    May 10, 2013 03:23 pm at 3:23 pm |
  10. hypatia

    And they ignore how Shrub went after the Episcopal Chrich in 2008. Lying sons of hobags.

    May 10, 2013 03:23 pm at 3:23 pm |
  11. JASON

    Stupidity should be tax exempt: Tea party

    May 10, 2013 03:25 pm at 3:25 pm |
  12. Hamburger Jones

    "too bad that we've got so many radical right wingers on these blogs" FOX doesn't allow comments for fear of us coming over there are ripping them a new one. FOX reads CNN comments and they fear us.

    May 10, 2013 03:27 pm at 3:27 pm |
  13. lmc11

    Pay close attention to everything that is happening folks. The White House just held a PRIVATE session with members of the press to discuss Benghazi. Now why would that be? The IRS and WH have their enemies lists and they are in overdrive!

    May 10, 2013 03:27 pm at 3:27 pm |
  14. peterz

    Tax N Law, IRS today reminding Justice Department loyalty attempt yesterday.

    May 10, 2013 03:27 pm at 3:27 pm |
  15. Hillary

    At this point..who cares.

    May 10, 2013 03:30 pm at 3:30 pm |
  16. korkea aika

    anything that says 'tea party' on it should be referred to the FBI for treasonous activities. I totally support the IRS taking a closer look at these radical organizations and their agendas. they would likely use the tax savings to fund groups that want to succeed from the union. Signed a true patriot: Pay your taxes! Quit whining!

    May 10, 2013 03:30 pm at 3:30 pm |
  17. Ted

    OOOPS, another Benghazi.

    May 10, 2013 03:30 pm at 3:30 pm |
  18. The Real Tom Paine


    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.
    Correct me if I'm wrong, brother of Finarfin: name one time recently when the Right has admitted they were wrong about anything other than having an affair while hiking the Appalachian Trail, and getting caught? Has there been such an instance in our lifetime?

    May 10, 2013 03:32 pm at 3:32 pm |
  19. chill

    Holding up votes on appointments is thuggery too Mitch. And absolutely on purpose.

    May 10, 2013 03:33 pm at 3:33 pm |
  20. Veeblefester

    Republicans are all up in arms over this, but during the run up to the Iraq war it was perfectly OK for the IRS to threaten churches with the loss of their non-profit status if they dared to preach that Jesus was "The prince of Peace".

    May 10, 2013 03:35 pm at 3:35 pm |
  21. Mark

    Yet another double-standard. If the IRS had done this to any liberal group, the outrage would be screaming from every news organization. The hysteria would last for months. CNN is trying to bury this story fast.

    May 10, 2013 03:35 pm at 3:35 pm |
  22. mouse234

    So lets form another investigation commitee and spend more money instead of working on the budget!!!!

    May 10, 2013 03:36 pm at 3:36 pm |
  23. The Real Tom Paine


    Spin away little libbies, spin away. Between Benghazi and this, you can try to deflect this all you want, you'll still be crying "Wah, Wah, Wah," all the way home!!!
    Hardly. I don't recall any outrage on the Right when they used the IRS to go after individuals and organizations who were on the left. 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.

    May 10, 2013 03:37 pm at 3:37 pm |
  24. The Real Tom Paine

    -Liberal Sense (Or lack thereof)

    Democrats are literally the party of hate. Proof is all around you.
    And the GOP continues to be the party of stupid: the proof is in the mirror. The hate from the Right never stops flowing, nor the ignorance, or the fear mongering. Without it, they would actually have to find a solution to problems facing our country instead of blaming every Democrat from Obama to FDR.

    May 10, 2013 03:40 pm at 3:40 pm |
  25. Blah blah the wheel's off your trailer

    Let's "BAN" IRS filing!

    May 10, 2013 03:41 pm at 3:41 pm |
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