A federal court ruled Friday that the Internal Revenue Service has not yet demonstrated that officials stopped targeting Tea Party groups in a decision that excoriated the tax agency for its "discriminatory" treatment of conservative organizations.

"This is a blistering rebuke to the IRS and its defenders," Walter Olson, senior fellow at the Cato Institute Center for Constitutional Studies, said of the court's ruling. "It takes on squarely the defense the IRS had raised in this case which is, 'Whatever happened, we promise not to do it again.'"

"The court goes through and systematically takes that apart in a way that's very damaging to the IRS's overall defense," he added.

The D.C. Circuit Court of Appeals, often considered the second most powerful court in the country, reversed two decisions made by lower courts to dismiss lawsuits against the IRS for the targeting of two conservative groups, Linchpins of Liberty and True the Vote.

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