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. The Real Tom Paine


    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.
    Where in any post I have ever made have I ever said I wanted something covered up? You don't want truth for the dead, you want your pound of flesh, regardless of whether its the truth or not. If the truth happens to be that nothing short of an evacuation would have saved their lives, that no miliary assets would have made a diference, would you accept that? I doubt it. You are so blinded by your hate that you don't care. Face it, you are loving this, almost as much as 9/11 and every other crisis and disaster that benefits the Right. Disgusting example of the selective morality of the Right.

    May 10, 2013 04:09 pm at 4:09 pm |
  2. Deb in MT

    I suspect that the increasing politicalization of many RW groups–particularly those that felt they had no obligation to pay taxes (Taxed Enough Already)–led those low level staffers in the Cincinnati office to highlight certain key phrases in their selection process, and that led to the concentration on RW groups. It sounds like they eventually got their tax-exempt status approval, but that the procedure took a little longer and required more complete answers from the applicants, exactly what I would expect to prevent fraud.

    If left wing groups decided to become politically active about avoiding taxes, I'd expect the same thing to happen to them.

    Inappropriate? Maybe, but I'm pretty tired of "tax -exempt" groups that try to bend the laws almost to the point of breaking them with their issue advocacy, on both sides.

    May 10, 2013 04:09 pm at 4:09 pm |
  3. cosmok

    For all you people bashing the Tea Party for not paying taxes, did you actually read the article? The IRS admitted that they were wrong and the Tea Party was right. Get over it.

    May 10, 2013 04:11 pm at 4:11 pm |
  4. Angie

    For the IRS to apologize, you better believe the mistakes made were huge and now they are afraid of possible legal actions. The comment that it was not a political-biased decision is just laughable.

    May 10, 2013 04:14 pm at 4:14 pm |
  5. Richard Right

    First spread lies about your opposition, then spy on your opposition, then use administrative powers of govt to harass and harm legal opposition, next arrest members of legal opposition, and finally use force to suppress legal opposition. This doesn't happen with honest news reporting, only when news reporting is supportive of such actions.

    May 10, 2013 04:14 pm at 4:14 pm |
  6. Thinks2010

    I think ALL politicians and party affiliated groups should have their filings carefully examined to see that they are in compliance with tax laws and campaign contribution laws and nothing beyond that. These investigations should not be used to hound or hinder these groups. They should only be used to ensure compliance with the law.

    May 10, 2013 04:18 pm at 4:18 pm |
  7. Liberal Sense (Or lack thereof)

    "I'd feel sorry for democrats if they weren't so stupid" ~JG

    May 10, 2013 04:19 pm at 4:19 pm |
  8. The Real Tom Paine

    Anyone who has been involved with non-profits know the scrutiny they face, whether its the Boy Scouts, the United Way, the Sierra Club, or the Tea party groups. Do you want your donations going to what you beolieve, or into someone's pocket?

    May 10, 2013 04:19 pm at 4:19 pm |
  9. qs

    The problem with conspiracy theories, is that even after proven wrong those who believed them in the first place then start delcaring the proof itself is a conspiracy theory cover-up.

    LIke trying to talk logic to religious's virtually impossible to reason with wholly unreasonable people.

    May 10, 2013 04:20 pm at 4:20 pm |
  10. Mark McKee

    Don't worry Tea Party. When things like this happen, you can always count on the ACLU to defend you. Wait a second...

    May 10, 2013 04:29 pm at 4:29 pm |
  11. Gadsden Gurl

    Wow talk about misinfo and disinfo! The legit tea party is the one who turned in these crooks like Sal Russo.... a fake tea party who stole the movement's name to collect money for RINOs in the GOP. THEY DESERVED THIS.

    May 10, 2013 04:30 pm at 4:30 pm |
  12. Gadsden Gurl

    They got what they deserved. Wow talk about misinfo and disinfo! The legit tea party is the one who turned in these crooks like Sal Russo.... a fake tea party who stole the movement's name to collect money for RINOs in the GOP. THEY DESERVED THIS.

    May 10, 2013 04:32 pm at 4:32 pm |
  13. Chris Bourne

    It's wrong what the IRS did....but still funny!! hehe

    May 10, 2013 04:33 pm at 4:33 pm |
  14. ART

    The real TomPaine JUst like you right wing retards I was not happy about the loss of over 2000 people on 9/11 but nobody went crazy and played the blame game like the Rethuglicans. if I remember correctly we all came together, so to the Faux news and those Rethuglicans in congress who just can't seem to get enough of Bengazi get the F over it.

    May 10, 2013 04:33 pm at 4:33 pm |
  15. sly

    Government scrutiny of shady groups applying for Tax Exempt status is a good thing, not a bad thing.

    Ask as many questions as necessary to determine these groups really do work for Social Justice and not for poltiical gain.

    Good for the IRS!

    May 10, 2013 04:38 pm at 4:38 pm |
  16. Mike

    Long story short: IRS targeted tea party groups because they had names like "tea party" or "patriot".

    CNN buries the lede as usual, and first mentions the IRS's contention that this was somehow not based on politics.

    May 10, 2013 04:38 pm at 4:38 pm |
  17. retphxfire

    For crying out loud, the TP's are about as reasonable as a shark smelling blood. I know 'liberal' NGO's who have been put through the ringer. It's the IRS, they have no loyalties other than their own obsession and belief everyone is trying to cheat. At least under Clinton, they had orders to back off on their witch hunts and to stop being such pains in the *ss to in no more guilty, guilty, guilty and have fun trying to prove otherwise and their accusatory tone, refusal to help etc. was tempered. It's past time to dilute their unchecked authority.

    May 10, 2013 04:41 pm at 4:41 pm |
  18. Dawn Kiebals

    Not understanding how paying taxes = suppression of free speech? Amazing, so long as you can figure out how to burn every cent on high salaries and overhead, you don't have to pay taxes. Is there anyone who thinks these groups missions are for the general public welfare? If it smells like dog @#!$ it probably is.

    May 10, 2013 04:50 pm at 4:50 pm |
  19. Jeff E.

    Amazing how many paragraphs it took CNN to get to the real beef of the article... that the names "tea party" and "patriot" were singed out for scrutiny. And the headline? "Oops"??? It is so hard to get unbiased news anymore.

    May 10, 2013 04:51 pm at 4:51 pm |
  20. Laura

    Why give a tax exempt status to any political organization? I think we should just go ahead and tax them all!

    May 10, 2013 04:51 pm at 4:51 pm |
  21. James

    Just one more reason that the entire organization needs to be revamped and the tax code simplified. Also, a sorry wont do, heads should roll but then again, I'm sure this directive came from the Holly King Obama and his minions. This whole administration is shameful.

    May 10, 2013 04:52 pm at 4:52 pm |
  22. Eddy Collins

    I'm definitely against profiling and big government, but we're really being a little too sensitive here. One of the hallmarks of right-wing politics is anti-taxes. The IRS is the taxing authority. It doesn't get much more political than that. And unless you've been under a rock for the past 240 years in the U.S., the term "Tea Party", including the original Boston "Tea Party", is all about being anti-taxes. So if you're the taxing authority isn't it cheaper to and cost less taxes to audit people who are flat out saying by name we don't want to pay taxes because we don't believe in paying them? The only people who really should be offended are the ones wanting to have a non-profit party group where everyone gets together to have a cup of tea.

    May 10, 2013 04:52 pm at 4:52 pm |
  23. WildOmar

    This kind of thing bears out the most paranoid fears of the far right. I hate to say it, but maybe a little more paranoia in regards to the actions of our government is warranted. The Obama administration's 2nd term is shaping up to be vicious, unethical, and vengeful. I was hoping for a term that was just the opposite. (sigh)

    May 10, 2013 04:56 pm at 4:56 pm |
  24. Dude

    "it was done as a "shortcut," not out of "political bias.""

    Fail. By definition, it is biased to think that the words were shortcuts.

    May 10, 2013 04:59 pm at 4:59 pm |
  25. Brhino

    This is what tyranny looks like folks. When branches of a so called representative government can use its power to make life difficult for those it masters disagree with politically. What a shame.

    May 10, 2013 04:59 pm at 4:59 pm |
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