IRS apologizes for targeting tea party. Should heads roll? (+video)

IRS apologizes that its bureaucrats trolled for groups with names that included 'patriot' and 'tea party' before last year’s election in order to take a closer look at their tax status. Tea party groups want workers fired.

By , Staff writer

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    The Internal Revenue Service building in Washington. The agency has apologized for targeting tea party groups for special scrutiny of their tax status.
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Four years after President Obama joked at a commencement speech about using the IRS, Nixon-style, to target those who cross his path, the IRS on Friday apologized for unfairly targeting some of  the White House’s most devoted thorns-in-the-side – local and national tea party and patriot groups – for scrutiny.

After denying any such incidents ahead of last year’s election, IRS officials acknowledged and apologized Friday for letting it happen, in a Cincinnati field office. Workers there perused applications for “social welfare” designation, a tax-free status used by many super PACs because some political activity is allowed, targeting the words “patriot” and “tea party.”

Tea party activists – doubly miffed for being targeted and then having their complaints blown off by the press – are hardly mollified by the apology.

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Calling it a textbook example of the very kind of government tyranny that tea party groups have been warning about, Republican lawmakers are demanding investigations into what Rep. Darrell Issa, (R) of California, called “unconscionable” behavior. Tea party groups want the workers in question to be fired.

Whether the ultimate fault comes down to shoddy work or political trickery is still unresolved. The IRS commissioner at the time, Douglas Shulman, was a Bush appointee, and the IRS, despite a past history of political meddling for the White House, is usually lauded for its independence.

Moreover, the bottom line of the investigation touched on a key political debate: Gauging whether so-called “social welfare” groups that apply for tax exempt status are in fact no more than political operations in disguise. 501(c)4 is the designation under which most political Super PACs operate.

In a prepared statement released late Friday, the IRS explained that employees were attempting to “centralize” a large number of applications. In the end, some 300 applications were pulled, about half with “patriot” or “tea party” associations. None were ultimately denied.

"While centralizing cases for consistency made sense, the way we initially centralized them did not," the statement said. "Mistakes were made initially, but they were in no way due to any political or partisan rationale. We fixed the situation last year and have made significant progress in moving the centralized cases through our system."

When tea party complaints were raised last year, the New York Times weighed in supporting the IRS, though the paper also said scrutiny should be focused on groups of all political stripes.

“Taxpayers should be encouraged by complaints from Tea Party chapters applying for nonprofit tax status at being asked by the Internal Revenue Service to prove they are 'social welfare' organizations and not the political activists they so obviously are,” the Times editorial page wrote.

While no crime seems to have taken place, the optics alone are likely to bring intense scrutiny on the operation by Republican lawmakers, including how it started, who carried out the policy, and whether it was approved by bureaucrats higher up in the chain. Letters sent by the IRS to some of the tea party applicants demanded lists of donors, names of volunteers, and printed copies of Facebook pages, some of which violated IRS policy.

"Some of what they [the IRS] asked was reasonable, but there were some requests on there that were strange," Toby Marie Walker, president of the Waco Tea Party told FoxNews.com last year. "It makes you wonder if they do this to groups like ACORN or other left-leaning groups.”

Tension between the government and conservative grassroots groups has waxed and waned since the election of President Obama and the 2009 stimulus package, which set off a tea party movement that has since infiltrated the very bones of Washington, resulting, in, among other things, the current budget sequester, or automatic budget cuts, mandated by a 2011 resolution to allow the country to raise its debt limit.

In 2009, the Department of Homeland Security issued a controversial warning about the possibility of domestic terrorism coming out of “right wing extremism,” including some patriot groups.

The appearance now of a government allegedly using bureaucrats for political thuggery has revivified those suspicions, ironically threatening to undermine the IRS goal of protecting taxpayers from fraud.

“This kind of administrative abuse is the sort of slow-acting poison that can kill civil society,” writes Megan McArdle at the Daily Beast. “I'd like to see the IRS demonstrate that this is just an isolated incident – one that they are very determined not to see repeated.”

While there’s no evidence that the targeting of right-wing groups had political motivation – indeed, the notion was disabused strongly by IRS officials Friday – the agency has a colorful history of political imbroglios, especially dating back to the Nixon era some 40 years ago.

At that time, Judge Charles Richey reprimanded the agency for appearing to politically target civil rights groups, noting that a “showing of political influence renders the Service’s ruling null and void … [and] outside the law.” Judge Richey added that the court was worried about “the creation of a political atmosphere generated by the White House in the Internal Revenue Service which may have affected the objectivity of those participating ….”

So far, the IRS has apparently not disciplined the workers involved in targeting the tea party groups. During a hastily-arranged conference call late Friday, Lois Lerner, who heads the agency’s tax-exempt group oversight, refused to say whether the employees would be called to task.

White House spokesman Jay Carney told reporters yesterday that Obama doesn’t want the incident whitewashed, saying “the President would expect that it be thoroughly investigated and action would be taken." Rep. Issa, who chairs the Oversight Committee chairman, says, "The Committee will aggressively follow up … and hold responsible officials accountable for this political retaliation.”

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