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. JP

    I was a Democrat when they really were inclusive and somewhat tolerant. (and I'm only in my thirties so it wasn't that long ago!) Now, we nominate people to the FHA who say that the majority of whites are racist and should not have their votes counted. Now we use the IRS to single out our opponents for special audits to be sure they can't get proper status until after the election, and use voter intimidation tactics like demanding their donor lists and to see who likes them on Facebook. Which draws cheers from some on the left here, apparently. Sorry, but that's not what I stand for, and I know a lot of principled Democrats agree with me. I was a Hillary girl before I was an Obama girl, but no matter how much I still like her and how exceptionally qualified she is to be President, I don't see myself voting to put a party in power that has become so hateful, bigoted, and corrupt. Unless she can convince me that she's going to clean house and tell the Nazi-esque elements in her party to shut up I'll be looking for another candidate in 2016. And no way will I pull the lever for any Democrat anywhere in the meantime.

    May 10, 2013 04:59 pm at 4:59 pm |
  2. DustyOnes

    Yes JP. You are growing up and seeing the character of the New Democrat Party. It is ugly.

    May 11, 2013 12:27 pm at 12:27 pm |
  3. Anonymous

    This should be headline news not buried under top stories. The mainstream media seems to have an agneda similar to thta of the IRS.

    May 11, 2013 12:32 pm at 12:32 pm |
  4. Bitrat

    Ha ha ha ha! IRS making mistakes? Well, no one's perfect. We all have our off days.......personally IMHO no political organization, church, or any but the most nonprofit of the non-profits should have any type of tax exempt status, but that's just me.

    May 11, 2013 12:35 pm at 12:35 pm |
  5. NameTodd A

    Barry Saetoro, is behind this, he's a embarrassment to all Americans that died in war for America, biggest lier in American history, santa clause to all the illegal immigrants, Muslims and all freeloaders

    May 11, 2013 12:36 pm at 12:36 pm |
  6. Eric

    That is what every party in this country has been like since WW2 if not earlier. The fact you didn't see it is what is more astonishing.

    May 11, 2013 12:49 pm at 12:49 pm |
  7. Matthew Kilburn

    Sorry, I don't buy it. There was most certainly political bias. Maybe not a broader conspiracy that runs to the top of the IRS, but definitely among these flunkies who were picking the groups for review. They weren't also keyword-searching "occupy" or "GLBT", were they? No.

    Quite a few people need to tender the resignations here, certainly the heads of any departments and offices where they took place. There's really no secondary approval on who gets audited?

    May 11, 2013 12:59 pm at 12:59 pm |
  8. Ceswho

    This is more Chicago style politics–mis-information, corruption, intimidation, and finally to destruction of your "enemies"
    if we as a country keep allowing this, somewhere down the road even the big government liberals will ask:What happened to MY freedoms? I never thought this would happen to us! The political beast is on a roll and won't stop until they have all
    Given themselves all the power and America becomes just another third world country run by dictators.

    May 11, 2013 01:00 pm at 1:00 pm |
  9. Balls of Steel

    IRS, I forgot to send you the check. Oops....

    May 11, 2013 01:04 pm at 1:04 pm |
  10. Jay jay

    Well stated JP

    May 11, 2013 01:37 pm at 1:37 pm |
  11. rare_earth

    Fighting fire, with fire.
    I don't see anything wrong with that, at all.
    Finally, Democrats are showing some backbone.

    May 11, 2013 01:44 pm at 1:44 pm |
  12. jcvet33

    Now I know how it must have felt to live in the old Soviet Union.

    May 11, 2013 01:48 pm at 1:48 pm |
  13. jOe

    They want to gut government but want services to remain the same.

    Good luck with that....

    May 11, 2013 01:48 pm at 1:48 pm |
  14. stephen douglas

    The major political parties have corrupted the country, virtually ruined the chances of small businesses to make it – especially farmers and ranchers – , lined their pockets by cowtowing to special interest groups, and successfully chased manufacturers from the country causing the widespread unemployment we now see.

    The only way to get our country back is to vote straight ticket for any alternative to Republican or Democrat. I know I have had it, and right now I would gladly vote for Ron Paul or whoever instead of any Democrat or Republican.

    It is time to stop searching for perfection in any candidate – it does not exist. Any candidate who appears perfect has a lot of garbage hidden. Big toothy smile, quick handshake and a pat on the back...manipulative liar.

    May 11, 2013 01:54 pm at 1:54 pm |
  15. Laughing

    How do we know these groups don't have people working in the IRS to bungle up their 501(c)(4) status just so they would have another reason to complain about Obama? I think that's what is really going on here. It all comes down to racism, and the tea party is plumb full of it.

    May 11, 2013 01:56 pm at 1:56 pm |
  16. stephen douglas

    The major political parties have corrupted the country, virtually ruined the chances of small businesses to make it (especially farmers and ranchers) lined their pockets by cowtowing to special interest groups, and successfully chased manufacturers from the country causing the widespread unemployment we now see.

    The only way to get our country back is to vote for any alternative to Republican or Democrat. I know I have had it, and right now I would gladly vote for Ron Paul or whoever instead of any Democrat or Republican. If a name has a D or an R next to it, won't get my vote.

    It is time to stop searching for perfection in any candidate – it does not exist. Any candidate who appears perfect has a lot of garbage hidden. Big toothy smile, quick handshake and a pat on the back almost surely equals manipulative liar.

    May 11, 2013 01:56 pm at 1:56 pm |
  17. George Dixon

    Obama was refused an honorary doctorate by Arizona State University.

    Obama remarked the ASU “President Crowe and the Board of Regents will soon learn all about being audited by the IRS.”

    Liberals love the fact that conservative groups were unfairly targeted by the IRS.
    Liberals reject law that they dislike, they also use moral equivalence to excuse their intolerance .

    Liberals are also setting precedent that could come back on them.....democrats will not always have offices to abuse.

    May 11, 2013 02:01 pm at 2:01 pm |
  18. Smeagel4T

    I was a Republican when they really were inclusive and somewhat tolerant. Now that they've become so divisive and polarizing, it's very difficult to support Republicans anymore.

    May 11, 2013 02:02 pm at 2:02 pm |
  19. Smeagel4T

    How odd the neocons would complain about this. They keep championing the idea of profiling for efficiency when it suits their whims.

    May 11, 2013 02:03 pm at 2:03 pm |
  20. mark ducharme

    I am pro right but explain to me again why any polictical group shoud have tax exempt status. Oh, that's right we don't have enough money in politics now and we need more.

    May 11, 2013 02:09 pm at 2:09 pm |
  21. tim

    I am no longer a democrat they have become corrupt,hateful,dishonest and a bunch of lier;s. I am now a independent.

    May 11, 2013 02:17 pm at 2:17 pm |
  22. lolwut

    "the agency strongly contests the notion that groups were targeted out of political bias."

    Well gee, that's good enough for me! In other news, Benghazi was the result of a video and Obamacare will never, ever add one dime to the deficit.

    May 11, 2013 02:25 pm at 2:25 pm |
  23. Lord Toronaga

    Interesting.... Think this just happened ? Where is Holder ? Where is the outrage ? I bet this is going to go viral pretty soon.

    May 11, 2013 02:25 pm at 2:25 pm |
  24. Tim

    "Oops"!? How about, "you will be eligible for parole in ten years"? This corrupt Obama administration must be held accountable for their misdeeds. We need to see some prosecutions and stiff prison sentences for this misuse of power.

    May 11, 2013 02:27 pm at 2:27 pm |
  25. John

    And libs are laughing about a government agency who takes advantage of their ultimate power and uses it against regular Americans? I feel sorry for you libs and for America.

    May 11, 2013 02:27 pm at 2:27 pm |
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