A year after a scorching audit revealed that the Internal Revenue Service targeted tea party groups for intrusive scrutiny, and despite an effort to clean house at the agency, many of those groups are still awaiting approval for tax-exempt status.
Meanwhile, documents released Wednesday — a year to the day after the inspector general’s audit — signal intensive involvement of IRS employees in Washington, contradicting the early story by agency employees that the problems stemmed from overzealous employees in the Cincinnati office.
As the IRS scandal enters its second year, congressional oversight continues, but the agency faces increasing pressure from other avenues, including lawsuits meant to force the agency to approve some of those long-stalled applications.
“We still don’t have the complete picture of what took place. We have a much better idea than we did a year ago, but the scope, depth and breadth of it is going to [emerge] in context of the litigation,” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which is representing several dozen groups that have tangled with the IRS over their nonprofit applications.
The center says it has 11 client organizations awaiting decisions on their applications, at least one of them stretching back five years. Another 24 of the groups it represents were approved after delays, five withdrew their applications out of frustration with the process, and one was denied after refusing to answer probing IRS questions.
The IRS didn’t return a message Wednesday seeking the number of other groups awaiting approval.
Last week, IRS Commissioner John Koskinen said a “handful” were outstanding. He said part of the problem was that some of those groups sued to try to force the IRS to act, which as a result delayed their applications.
“Of the more or less 145 backlogged organizations a year ago when the issue was raised, 90 percent of those have been cleared through. So we’re down to a relatively small number. Some are suing us, so, you know, it depends on what the process of the litigation is,” he told Congress.
Mr. Sekulow said his explanation was not true and that the IRS could approve applications even with lawsuits pending.
Mr. Koskinen, testifying to Congress, said he thinks some of the groups filed lawsuits “because it keeps the issue alive longer.” He said his agency has reached out and tried to resolve legitimate issues as quickly as it could.
The IRS tried to streamline the process, offering groups in the backlog a deal: They could gain immediate approval if they agree to limit politics to 40 percent of their activity.
Some groups took the deal, but Mr. Sekulow and others argued that was surrendering rights, given that current interpretations for other groups allow just less than half of activities to be political.
Mr. Sekulow said the IRS is being contradictory. After offering the 40 percent deal, he said, the agency proposed to ban all politicking for tax-exempt groups, including candidate forums and voter guides in the days before federal elections.
Those proposed rules drew a record number of comments, most of them vehemently opposed, and are still being processed by the IRS and the Treasury Department.
Mr. Koskinen has said the proposed rules would not apply to this year’s elections.
Judicial Watch, a public interest law firm, released documents Wednesday that it obtained under open-records requests from the IRS that it said showed the targeting was overseen by Washington. That contradicts former IRS employee Lois G. Lerner’s initial claim that the problem was centered in the agency’s Cincinnati office.
“These new documents show that officials in the IRS headquarters were responsible for the illegal delays of Tea Party applications,” said Judicial Watch President Tom Fitton.
The documents also detail repeated efforts by Sen. Carl Levin, Michigan Democrat, to get the IRS to take a look at nonprofit groups’ political activity, and IRS replies.
In one of those replies, the IRS said it had leeway in deciding what questions to ask applicants and acknowledged it didn’t have a set period for closing cases.
Mr. Levin said his efforts to find out more about how the IRS was handling these applications — including a specific request for details about 12 groups, most of which were conservative — has been public for some time.
“Those letters have been on my website for over a year. We’ve urged the IRS to enforce the law against both conservative and liberal groups,” he told The Washington Times. “Even the tapes we sent to the IRS were both Democratic and Republican TV commercials. We sent them both. It’s about time they enforce the law against both.”