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IRS screened liberals? 'Progressive' and 'Occupy' targeted too, says new IRS chief

IRS screening of groups seeking tax-exempt status was broader and lasted longer than has been previously disclosed, the new head of the agency acknowledged Monday. 

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"There was a wide-ranging set of categories and cases that spanned a broad spectrum" on the lists, Werfel said. He added that his aides found those lists contained "inappropriate criteria that was in use."

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Werfel ordered a halt in the use of spreadsheets listing the terms β€” called BOLO lists for "be on the lookout forβ€” on June 12 and formalized their suspension with a June 20 written order, according to the IRS document the AP obtained. Investigators have previously said that the lists evolved over time as screeners found new names and phrases to help them identify groups to examine.

Democrats on the House Ways and Means Committee released one of the lists, dated November 2010, that the IRS has provided to congressional investigators. That 16-page document, with many parts blacked out, shows that the terms "Progressive" and "Tea Party" were both on that list, as well as "Medical Marijuana," ''occupied territory advocacy" and "Healthcare legislation."

Rep. Sander Levin of Michigan, top Democrat on the Ways and Means panel, said he was writing a letter to J. Russell George, the Treasury Department inspector general whose audit in May detailed IRS targeting of conservatives, asking why his report did not mention other groups that were targeted.

"The audit served as the basis and impetus for a wide range of congressional investigations and this new information shows that the foundation of those investigations is flawed in a fundamental way," Levin said.

Republicans said there was a distinction. A statement by the GOP staff of House Ways and Means said, "It is one thing to flag a group, it is quite another to repeatedly target and abuse conservative groups."

George's report criticized the IRS for using "inappropriate criteria" to identify tea party and other conservative groups. It did not mention more liberal organizations, but in response to questions from lawmakers at congressional hearings, George said he had recently found other lists that raised concerns about other "political factors" he did not specify.

On Monday, Karen Kraushaar, a spokeswoman for the inspector general, said their May audit focused on terms the IRS used to pick cases to be studied for political campaign activity, which might disqualify a group from tax-exempt status.

She said the inspector general has since found other "criteria" the agency used to list potential cases, and "we are reviewing whether these criteria led to expanded scrutiny for other reasons and why these criteria were implemented."

Democratic staff on Ways and Means said in a press release that they had verified that of the 298 groups seeking tax-exempt status that George's audit had examined, some were liberal organizations β€” something George's report did not mention.

Many organizations seeking tax-exempt designation were applying for so-called 501(c)(4) status, named for its section of the federal revenue code. IRS regulations allow that status for groups mostly involved in "social welfare" and that don't engage in election campaigns for or against candidates as their "primary" activity, and it is up to the IRS to judge whether applicants meet those vaguely defined requirements.

Werfel's remarks came as he released an 83-page examination he has conducted of his embattled agency. The conclusions, which Werfel cautioned are preliminary, have so far found there was "insufficient action" by IRS managers to prevent and disclose the problem involving the screening of certain groups, but no specific clues of misconduct.

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