The IRS is still holding up the nonprofit applications of tea party groups, including one that has been waiting nearly six years for approval, as conservatives panned the Justice Department’s announcement last week that it had cleared the tax agency, and former senior executive Lois G. Lerner, of any wrongdoing.
The Obama administration’s decision, outlined in a Friday afternoon letter to Congress, said the IRS did mishandle nonprofit status applications from conservative groups but said the bad behavior wasn’t criminal.
Still, the decision does not end the legal jeopardy for the tax agency, nor does it quell the political battle in which the IRS has lost billions of dollars in funding from a Congress that remains troubled by employees’ behavior.
Several lawsuits, including one seeking to be certified as a class action, are still pending against the IRS.
“It’s no wonder why so many Americans have had it with Washington and the elite political class who can get away with something like this,” said Mark Meckler, president of Citizens for Self-Governance and one of the organizers of the class-action lawsuit.
Yet another case is pending before a federal appeals court after tea party challengers lost at the district court level, where the judge ruled that the IRS targeting stopped in 2013 so there was no longer a case to be decided.
That was news to the Albuquerque Tea Party, which applied for nonprofit status in December 2009 and is still awaiting approval, according to the group’s attorneys at the American Center for Law and Justice. Another of the center’s clients, Unite in Action, an Ohio group, has been waiting more than three years for approval.
“It’s an outrage — a mockery of justice,” Jay Sekulow, chief counsel for the American Center for Law and Justice, wrote in a Web memo. The center is pursuing a case on behalf of those and 36 other groups.
The Justice Department handed down its decision more than two years after the internal IRS watchdog reported that auditors singled out tea party groups’ applications for special scrutiny and delayed those applications beyond reasonable timelines, preventing the groups from being able to say they were officially recognized nonprofits.
Assistant Attorney General Peter J. Kadzik explained the Justice Department’s investigation, picking up from the inspector general’s report and detailing documents obtained from more than 80 employees and more than 100 interviews — including with Ms. Lerner, who cooperated with the investigation.
While concluding that IRS employees showed ignorance and a fear of making decisions, Mr. Kadzik said there was no evidence of a political intent to disadvantage the tea party groups — even though that was what resulted.
“Ineffective management is not a crime,” Mr. Kadzik concluded. “The Department of Justice’s exhaustive probe revealed no evidence that would support a criminal prosecution. What occurred is disquieting and may necessitate corrective action — but it does not warrant criminal prosecution.”
Some Republicans questioned the validity of the probe from the beginning, after learning that one of the Justice Department lawyers assigned to the investigation was a contributor to President Obama’s political campaigns.
In its letter Friday, the Justice Department specifically cleared Ms. Lerner, a senior executive in charge of approving the groups’ applications, who had authored a number of emails that suggested a bias against the tea party movement.
Investigators said none of the witnesses they interviewed believed Ms. Lerner acted out of political motives and that Ms. Lerner seemed to try to correct the inappropriate scrutiny once she “recognized that it was wrong.”
“In fact, Ms. Lerner was the first IRS official to recognize the magnitude of the problem and to take concerted steps to fix it,” Mr. Kadzik wrote.
Congressional Democrats said the decision confirmed what they figured out years ago — that there was no underhanded political dealing at the agency.
“Over the past five years, Republicans in the House of Representatives have squandered literally tens of millions of dollars going down all kinds of investigative rabbit holes — IRS, Planned Parenthood, Benghazi — with absolutely no evidence of illegal activity,” said Rep. Elijah E. Cummings of Maryland, the top Democrat on the Benghazi investigation and ranking member of the House Oversight and Government Reform Committee.
The House Ways and Means Committee conducted its own investigation into the tea party targeting, as did the Senate Finance Committee. The House panel was the one that voted to refer Ms. Lerner’s behavior to the Justice Department for criminal investigation.
Rep. Paul Ryan, Wisconsin Republican and Ways and Means Committee chairman, called the Friday letter “deeply disappointing” but said it wasn’t a surprise given the bent of the Obama administration.
He said his committee’s probe did find “serious and unprecedented actions” by Ms. Lerner that deprived tea party groups of their rights.
“The American people deserve better than this. Despite the DOJ closing its investigation, the Ways and Means Committee will continue to find answers and hold the IRS accountable for its actions,” said Mr. Ryan, who likely will become the next House speaker.
Ms. Lerner’s attorneys said in a statement that they were “gratified but not surprised” by the announcement.
“Anyone who takes a serious and impartial look at the facts would reach the same conclusion as the Justice Department,” they said.
Ms. Lerner’s cooperation with the Justice Department investigation stands in contrast to her interaction with Congress, where she refused to answer questions, invoking her Fifth Amendment right to remain silent — but only after she delivered a statement declaring her innocence.
The House oversight committee concluded that she was not, in fact, able to invoke the Fifth Amendment at that point, and when she refused to answer questions, the House voted to hold her in contempt of Congress.
The Justice Department declined to pursue that case, too, arguing that her claim of Fifth Amendment rights was likely to succeed.