June 27 (Bloomberg) -- Tea Party groups were more likely than self-identified “progressives” to be given extra scrutiny for political involvement by the Internal Revenue Service from 2010 through 2012, according to the Treasury Inspector General for Tax Administration.
The IRS paid special attention to 30 percent of groups with “progress” or “progressive” in their names that filed applications for tax-exempt status between May 2010 and May 2012. All groups with “Tea Party,” “patriot,” or “9/12” in their names during that time received extra scrutiny.
“While we have multiple sources of information corroborating the use of Tea Party and other related criteria,” said inspector general J. Russell George, “including employee interviews, e-mails and other documents, we found no indication in any of these other materials that ‘progressives’ was a term used to refer cases for scrutiny for political campaign intervention.”
The inspector general’s office has been criticized by Democrats for not disclosing that some progressive groups had been subjected to heightened scrutiny and that the term “progressives” was included on an IRS guidance document.
The office released the information in a letter dated June 26 to Representative Sander Levin, the top Democrat on the House Ways and Means Committee. Levin called for George to testify again to the committee and argued that the audit had a “fundamental flaw.”
“The IG didn’t even give us a hint that progressive groups were targeted,” said Representative Joseph Crowley, a New York Democrat.
According to the inspector general’s letter, the IRS gave extra scrutiny to six of the 20 groups with “progress” or “progressive” in their names. The inspector general’s May audit said there were 96 groups with “Tea Party,” “patriot” or “9/12” in their names.
The IRS has been in the midst of controversy since May 10, when the agency disclosed the Tea Party scrutiny. Six congressional committees have opened inquiries and the Justice Department is pursuing a criminal probe.
The IRS is required by law to monitor tax-exempt groups for political activity, which is prohibited for charities under section 501(c)(3) and limited for social welfare groups organized under section 501(c)(4).
Representative Dave Camp, a Michigan Republican and chairman of the Ways and Means Committee, said progressive groups were flagged though not systematically targeted the way small-government groups were.
The terms “progressives” and “Tea Party” appeared on different parts of the IRS’s Be On the Lookout, or BOLO, list and at different times, suggesting two separate efforts.
Tea Party groups were referred to a special unit for processing starting in 2010.
Progressive groups were included under a section labeled “historical,” suggesting an issue that had arisen before the August 2010 version of the BOLO released this week.
The inspector general’s initial May 14 report looked only at the 2010 to 2012 period, and it’s unclear why the “progressive” term appeared or how IRS employees treated progressive groups before then. The inspector general’s office is still investigating the issue, according to the letter.
Camp and Representative Paul Ryan, a Wisconsin Republican, criticized the IRS’s request for a $1 billion, or 9 percent, budget increase for the fiscal year starting Oct. 1.
“Why would we, representing the taxpayers we represent, give you all the money you’re asking for if this is what the IRS is doing with our hard-earned tax dollars?” Ryan said to Danny Werfel, the interim leader of the IRS, during a hearing today.
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