Treasury IG: Liberal groups weren't targeted by IRS like Tea Party

Liberal groups seeking tax-exempt status faced less IRS scrutiny than Tea Party groups, according to the Treasury Department’s inspector general.

J. Russell George, Treasury’s inspector general for tax administration, told Rep. Sandy Levin (D-Mich.) in a letter dated Wednesday that the IRS did not use inappropriate criteria to scrutinize groups with “progressives” in their name seeking tax-exempt status.

“Our audit did not find evidence that the IRS used the ‘progressives’ identifier as selection criteria for potential political cases between May 2010 and May 2012,” George wrote in the letter obtained by The Hill.

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The inspector general stressed that 100 percent of the groups with “Tea Party,” “patriots” and “9/12” in their name were flagged for extra attention, while only 30 percent of the groups with “progress” or “progressive” were highlighted as potentially political. George’s letter does not say why the progressive groups were given extra scrutiny.

“While we have multiple sources of information corroborating the use of Tea Party and other related criteria we described in our report, 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,” George wrote to Levin, the top Democrat on the tax-writing House Ways and Means Committee.

George and his office have faced criticism in recent days after a spokesman for the inspector general said they were only tasked with looking into whether conservative groups faced tough IRS scrutiny.

Documents released this week showed other groups — including liberal and nonpartisan organizations — also received scrutiny from the IRS, and Democrats have suggested this wasn't noted when the scandal broke because of the IG's focus on conservative groups.

George insisted in his letter that his office did not limit its audit to Tea Party groups.

The letter also adds a new twist to an IRS controversy that still has only seemed to get more muddy this week, and still has major unanswered questions — including why the targeting of groups went on for so long and why IRS officials declined to inform Congress.

Levin and other Democrats have said this week that new information from the IRS that shows that the term “progressives” was on an agency watch list raised serious questions about the audit. Democrats have said the “flawed” report from George has allowed Republicans to overly politicize the investigation into the IRS’s treatment of groups seeking tax-exempt status.

Progressive groups that sought tax-exempt status also have been coming forward in recent weeks to outline what they saw as overbearing treatment from the IRS.

Levin on Thursday said the IG is now changing its story, and Democrats have called for George to return for more testimony about what they say are the IG’s inconsistent responses to Congress.

For instance, Democrats say George did not previously disclose that liberal groups were among the 298 organizations looked at for the audit, and stress that the inspector general first acknowledged seeing “progressive” on the so-called “be on the lookout,” or BOLO, lists used to flag groups for extra attention.

“Congress deserved to know that ‘progressives’ were on the IRS screening list during the time of the audit and progressive organizations were in the review group," Levin said in a statement Thursday. "These omissions changed the nature of the investigation and the IG’s testimony is not consistent with his written response.”

Republicans argue the preponderance of evidence suggests conservative groups were singled out for abuse by the IRS, even if groups from across the political spectrum were on BOLOs.

"At this point, the evidence shows us that conservative groups were not only flagged, but targeted and abused by the IRS," said Sarah Swinehart, a spokeswoman for Ways and Mean Chairman Dave Camp (R-Mich.).

"As we gather the facts, we will follow them wherever they lead us. Chairman Camp encourages all groups, regardless of political affiliation, that feel they may have been targeted to come forward and share their story."

— This story was updated at 11:53 a.m.