Published May 15, 2013
While IRS officials attributed the agency's heavy scrutiny on conservative groups to the spike in applications over the past few years, fresh reports and figures are raising questions about whether the agency knowingly applied a double standard.
A highly anticipated watchdog report, released late Tuesday by the inspector general's office, depicted an even bigger spike in applications for tax-exempt status from a type of group that includes labor organizations. Yet, according to the report, the conservative groups were the ones singled out for special treatment.
This special treatment included the agency creating a unique "be on the lookout" list. The list covered "political-sounding" names like Tea Party, Patriots, and 9/12. The criteria, labeled by the report as "inappropriate," later expanded to include groups focused on government spending, government debt, taxes and other areas.
The IRS has explained that low-level staffers at an Ohio office were effectively scrambling to deal with an influx in applications from these groups, for tax-exempt status known in the IRS code as 501(c)(3) and 501(c)(4).
But around the same time, there was another influx of cases under a classification known as 501(c)(5). This is the tax-exempt status that applies to labor organizations, as well as agricultural and horticultural groups.
While the number of applications from these groups was not as high as the number from the other two categories, the increase in applications in both 2011 and 2012 was far more pronounced. The number increased by 41 percent in 2011, and then by a whopping 164 percent in 2012.
By comparison, the number of 501(c)(4) cases rose 30 percent, and then 48 percent in that time period. The IG report said the numbers could not be independently verified.
Conservatives have claimed since Friday, when Exempt Organizations Division chief Lois Lerner first admitted to the practice, that the selective scrutiny was politically motivated. Further, they've alleged that it may have gone well beyond the Ohio office.
"It's hard for me to imagine that this is just a bunch of low-ranking apparatchiks," Sen. John McCain, R-Ariz., told Fox News on Wednesday, complaining about what he called "selective" treatment of these organizations by the IRS.
The IRS, in a statement released after the IG report was made public, acknowledged that its original approach for handling the "influx" of applications was "inappropriate."
However, the agency explained it is required to ensure tax-exempt groups are engaging in "legally permissible political activity."
"Centralizing these cases was necessary to achieve consistent treatment. After seeing issues with particular cases, inappropriate shortcuts were used to determine which cases may be engaging in political activities. It is important to note that the vast majority of these cases would still have been centralized based on the general criteria used for other cases," the IRS said.
But other news reports underscored the difference in the agency's treatment of various politically tinged groups. USA Today reported that during the two-year period when Tea Party applications were being held up, the IRS approved roughly a dozen applications from liberal and progressive groups.
The groups included those with words like "progress" or "progressive" in their names, and reportedly were engaged in the same types of activities as those organizations whose applications were held up.
The Daily Caller also reported that Lerner in 2011 approved an application for the charity run by Obama's half brother -- the Barack H. Obama Foundation.
While some Tea Party applications sat at the IRS office for years, the charity's application was approved within a month.