The IRS inspector general said this week that while some liberal groups were given extra scrutiny by the tax agency, they were not subjected to the same invasive queries as tea party groups — a finding that seems to confirm a political bias was at play.
In a letter sent late Wednesday and released Thursday, Treasury Inspector General for Tax Administration J. Russell George said that just 30 percent of groups with the word "progressive" in their name were put through special scrutiny for tax-exempt applications, but 100 percent of groups with "tea party," "patriot" or "9/12" in their name were subjected to invasive questioning.
"TIGTA concluded that inappropriate criteria were used to identify potential political cases for extra scrutiny — specifically, the criteria listed in our audit report. From our audit work, we did not find evidence that the criteria you identified, labeled "Progressives," were used by the IRS to select potential political cases during the 2010 to 2012 time frame we audited," Mr. George said.
That finding contradicts claims by congressional Democrats who said liberal groups were targeted too — and, they argue, that suggests the scrutiny by the Internal Revenue Service didn't have a political bias.
Hours after the letter was released, acting IRS chief Daniel Werfel said that while an initial investigation has found no evidence of bias or political motivation, he didn't disagree with the auditor's conclusions.
The findings served to reinvigorate the controversy over the IRS, which has raged since revelations last month that the tax agency probed conservative groups in the run-up to the 2010 and 2012 elections, and was delaying approval of many of the groups, in some cases by three years.
Rep. Dave Camp, Michigan Republican and chairman of the House and Ways Committee, said the evidence shows conservatives were being systematically targeted — not just flagged.
"Americans deserve better than to fear whether the IRS will unfairly target them," Mr. Camp said. "One thing is clear: Congress has a lot more work to do to bring this out-of-control agency in check and hold them accountable to the American people."
Mr. Werfel vowed Thursday to do just that.
"I want the IRS to be in the business of just detecting — because we have to under the law and regulation — the extent of political activity, not knowing the type of politics," he told the committee. "What I'm suggesting is more analysis. Significant more analysis is needed before we reach conclusions about what that means in terms of an IRS failure or an IRS issue."
But many committee members were not assuaged by the pledge.
"Back in my district, it appears the Allen Area Patriots have also been a target of the IRS," said Rep. Sam Johnson, Texas Republican. "The bottom line is that the IRS has been used as a political weapon, and that's just outrageous."
Democrats, who have argued that the problem at the IRS stems from campaign finance rules more than political bias, questioned Mr. George's latest letter, after he said earlier this week that his audit wasn't tasked with looking at how the IRS handled progressive groups.
"Congress deserved to know that 'progressives' were on the IRS screening list during the time of the audit and progressive organizations were in the review group," said Rep. Sander M. Levin of Michigan, the ranking Democrat on the committee. "These omissions changed the nature of the investigation, and the IG's testimony is not consistent with his written response."
Democrats on the committee have sent a letter to Mr. Camp criticizing Mr. George's audit report as "fundamentally flawed," and requesting that Mr. George return to the committee to address the fact that the audit fails to mention that "progressives" was used as a screening term and that it does not mention liberal groups were among the 298 applications reviewed.
Mr. Werfel said his investigation is continuing, but there is no evidence of intentional wrongdoing by anyone at the IRS or involvement from anyone outside the agency, nor was there evidence of inappropriate "screeners" beyond those outlined in the IG report.
"We recognize, however, that there is public concern regarding the criteria used for applications or tax-exempt status, and more needs to be done to evaluate our screening criteria and procedures," he said.
Mr. Werfel said the agency has established new leadership at all chains of command involved in the inappropriate activities, suspended the "be-on-the-lookout" (BOLO) lists, and established a new process for certain applicants who have been in the backlog for more than four months to win expedited tax-exempt approval.
Rep. Darrell E. Issa, California Republican and chairman of the House Oversight and Government Reform Committee, issued a strongly worded statement after Mr. George's letter surfaced, saying Democrats "should stop trying to derail the investigation by defending IRS officials with distorted claims equating the systematic scrutiny of tea party groups with the more routine screening progressive groups received. As [the auditor] notes, tea party groups and progressive groups were treated very differently by the IRS."
Rep. Linda T. Sanchez, California Democrat, implied that a rushed investigation wouldn't benefit anybody.
"Wild West vigilante justice was often swift, but it was not always correct, nor was it always fair," she said. "I think that probably compounding some of the potential failures of the IRS would be mistakes in how the investigation is handled. And if it were to be done hastily and not thoroughly, I don't think that that serves the American public."
Mr. Werfel responded to her by saying he would be right back before the committee answering questions about conducting the investigation fairly.
"We're going to do things by the rule of law," he said.
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