Review of 5,500 IRS E-Mails Found No Political Targeting

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Internal Revenue Service Treasury Inspector General for tax administration J. Russell George listens during a House Oversight and Government Reform Committee hearing in Washington, D.C. on May 22, 2013. Close

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Photographer: Pete Marovich/Bloomberg

Internal Revenue Service Treasury Inspector General for tax administration J. Russell George listens during a House Oversight and Government Reform Committee hearing in Washington, D.C. on May 22, 2013.

An inspector general’s review of 5,500 e-mails among Internal Revenue Service employees found “no indication” that their scrutiny of Tea Party groups was politically motivated, according to documents being released today by Democrats.

An e-mail from a top investigator in the inspector general’s office bolsters Democrats’ claims that anti-tax Tea Party groups received extra scrutiny because of confusion and unclear direction, rather than an attempt to hurt Republican-leaning organizations.

“The e-mail traffic indicated there were unclear processing directions and the group wanted to make sure they had guidance on processing the applications so they pulled them,” the investigator said in the e-mail, dated May 3, just 11 days before the inspector general’s report criticizing the IRS came out. “This is a very important nuance.”

The partially redacted documents also contain information that supports Democrats’ contention that “progressive” groups were scrutinized and Republicans’ assertions that Tea Party groups applying for nonprofit status were treated differently.

The documents are being released by Representative Elijah Cummings of Maryland, the top Democrat on the Oversight and Government Reform Committee, who is questioning the quality of the report from J. Russell George, the inspector general for tax administration.

‘One-Sided’

“This investigation has been characterized by one-sided and partial information leading to unsubstantiated accusations with no basis in fact,” Cummings wrote in a letter sent today to the committee’s chairman, California Republican Darrell Issa.

The documents further muddy the picture of what happened at the IRS in 2010. The controversy following the inspector general’s report has prompted six congressional inquiries and a criminal probe. At least four IRS executives have been pushed out of their jobs.

Issa has pressed agency officials to explain their handling of applications for tax-exempt status, accusing the IRS of unfairly giving extra scrutiny to those submitted by small-government groups.

The documents released today include minutes from a July 28, 2010, meeting of IRS screeners in Cincinnati, where nonprofit applications are processed.

‘9/12 Project’

At one point, the minutes list “progressive” alongside “9/12 Project” as words meriting further review, suggesting that the groups on either side of the political spectrum were treated similarly. The “9/12 Project” is a reference to an effort promoted by commentator Glenn Beck, a small-government advocate.

At another point, the minutes say, “‘Progressive’ applications are not considered ‘Tea Parties.’”

That latter line fits Republican arguments that “progressive” groups received less attention. It also tracks with what Elizabeth Hofacre, who reviewed Tea Party cases in Cincinnati in 2010, told congressional investigators. She said she was assigned to handle Tea Party groups, concentrating on them to the exclusion of self-identified progressive and conservative groups.

‘Misleading Attempts’

“These documents, once again, refute misleading attempts to equate routine scrutiny of other groups involved in advocacy to the systematic scrutiny of Tea Party groups by IRS officials,” Ali Ahmad, a spokesman for Issa, said in a statement today. “As has been documented, while 100 percent of Tea Party applications were systematically stopped and scrutinized for a 27-month period, at the same time dozens of progressive applications were approved by the IRS.”

Democrats reached the opposite conclusion. Representative Sander Levin of Michigan, the top Democrat on the Ways and Means Committee, said the documents were further evidence that the inspector general’s audit was “fundamentally flawed and created widespread misperceptions that Republicans seized on in an effort to attack the White House.”

The inspector general’s report made clear that many Tea Party groups experienced delays and extra scrutiny. What’s less clear is what happened to Democratic-leaning groups during the same period, including how many of them applied for nonprofit status and what level of scrutiny they received.

The documents also include a so-called Be On the Lookout, or BOLO, list from 2012 showing that Occupy Wall Street groups were on a watch list.

‘Historical’ Issue

Tea Party groups were on several versions of the BOLO watch list as an emerging issue, while progressive groups were listed separately as a “historical” issue -- a fact that didn’t emerge until more than a month after George’s report.

In his letter, Cummings writes that these documents undercut George’s recent contention that he hadn’t found evidence that the IRS used the term “progressive” to select groups for scrutiny. The letter said the inspector general’s office has “suggested recently” that it was unaware of some of those documents when preparing its report.

Among the IRS’s responsibilities is to ensure that groups applying for tax-exempt status aren’t too involved in politics. Campaign intervention is prohibited for charities organized under section 501(c)(3) of the tax code and limited for social-welfare groups organized under section 501(c)(4).

Republicans have turned their attention away from the Cincinnati-based employees and toward the involvement of Washington-based lawyers in the delays and inappropriate questions that Tea Party groups received.

Those issues will be the subject of a July 18 hearing at which IRS employees from Washington and Cincinnati are expected to testify. Cummings wants George to testify.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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