- The Washington Times - Thursday, April 30, 2015

Nine tea party groups were still awaiting IRS approval for nonprofit status nearly two years after the political targeting program was exposed, the inspector general said in a report Thursday that, despite hiccups, claimed the tax agency has generally done a good job of cleaning up its act.

IRS employees no longer judge groups based on political leanings of their names, and has come up with an approved set of questions that means its agents can no longer ask the types of intrusive questions that landed the agency in trouble, the investigators said in their report, which updates their initial May 2013 finding.

But the IRS still doesn’t have a definition for deciding how much politicking crosses the line for nonprofit groups. That means applicants who don’t agree with the agency’s optional expedited processing — which imposes a 40 percent politics limit — will still face the same sort of subjective decision-making that plagued tea party and conservative groups from 2010 to 2013.

“Until this guidance is finalized, the IRS does not have a clearly defined test for determining whether an organization’s request for exemption as a social welfare organization should be approved,” the investigators said.

The IRS has been reeling since the May 2013 report, from Treasury Inspector General for Tax Administration J. Russell George, found the tax agency had singled out conservative and tea party groups for special scrutiny, had posed intrusive questions to those groups and had wrongly blocked their applications, oftentimes for years, as employees struggled to reach a decision.

Some of the intrusive questions included how organizations chose their names, who they associated with, what training materials they used and what connections they had to other tea party groups — which the groups said sounded like a political witch hunt.

Congressional Republicans had been accusing the IRS of targeting for years, but the agency had denied it until just before the report, when Lois G. Lerner, head of the division charged with approving nonprofit applications, planted a question at a conference to try to leak the details ahead of the inspector general.

Ms. Lerner initially blamed confusion at a regional office in Cincinnati, but congressional investigators say officials in Washington were at the center of the problem.

In the nearly two years since the initial report, however, the IRS has cleaned up its process, including settling on a standard set of questions to ask and speeding up processing, the report concluded.

“The IRS has taken significant actions,” Mr. George said. “It has eliminated the selection of potential political cases based on names and policy positions, expedited the processing of Internal Revenue Code Section 501(c)(4) social welfare organization applications and eliminated unnecessary information requests.”

Hundreds of groups were caught up in the targeting, with some waiting years for approval.

Almost all of the backlog has now been cleared, and the IRS no longer uses the “lookout” lists that it had adopted to single out tea party groups by the sound of their name, Mr. George said.

Sunita B. Lough, commissioner of the Tax-Exempt and Government Entities Division of the IRS, said the findings showed the progress the agency has made since 2013.

“We appreciate TIGTA’s acknowledgment that the IRS, and, in particular, the Exempt Organization function (EO), has taken significant actions to address the recommendations made by TIGTA,” Ms. Lough said.

She said her division has done a massive online retraining of employees — though the inspector general said training could be improved somewhat.

In its initial report the inspector general identified 160 tea party groups that had been waiting an extraordinary time for approval.

Two years later, nine are still awaiting an answer, Ms. Lough admitted. Of those, five face rejections or are still in the appeals process, while the other four are currently suing the IRS over its targeting. The agency has said that lawsuit has prevented it from making a final decision.

Most of the groups caught up in the targeting have been approved, while some have dropped out after waiting too long.

Targeted groups were not impressed with the latest report, which they said left many unanswered questions.

Catherine Engelbrecht, founder of True the Vote, a nonprofit that waited more than three years before finally getting approval, said the report seemed to imply that the targeting was a mistake rather than a determined policy.

“It tries to put a happy face on what is arguably one of the ugliest chapters in the history of this country that is far from over,” she said. “This was not something that the IRS was confused about doing, and now they’ve corrected their training processes. This was an IRS that was weaponized against American citizens.”

She said the report didn’t address targeting of 501(c)(3) organizations, which she said faced some of the most intrusive scrutiny, such as demanding to see the contents of Twitter messages.

Ms. Engelbrecht and others also wondered why the report didn’t address the situation with Ms. Lerner’s emails, thousands of which were apparently lost in a computer hard drive crash, but which the inspector general has since found on backup tapes. Investigators say there could be criminal charges stemming from that situation.

“Who knows how many more documents are being withheld?” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which represents a number of tea party groups who were caught up in the targeting.

Two of his clients are still waiting for approval — one of them has been pending for more than five years — and Mr. Sekulow said that shows the IRS “remains institutionally incapable” of solving its own problems.

“It’s clear the IRS would like this scandal to disappear. That’s not going to happen,” Mr. Sekulow said. “The American people deserve answers.”

The FBI is still investigating the IRS to determine whether any employees broke the law, and Ms. Lerner, who retired from the agency months after the scandal, has been cited as being in contempt of Congress — though the Obama administration has refused to pursue the charge.

Democrats on Capitol Hill say liberal groups also had their applications subjected to extra scrutiny, which suggests the targeting wasn’t politically motivated.

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