IRS 101: Seven questions about the tea party scandal

How the tables have turned: The Internal Revenue Service is the one under the microscope now, as revelations emerged Friday that the agency wrongly targeted conservative groups seeking nonprofit status. The revelations quickly amounted to a scandal that has taken a partisan turn, threatening to derail bipartisan efforts on guns, immigration reform, and the federal budget.

Here’s an accounting of what has happened, along with the ramifications.

Al Behrman/AP
The John Weld Peck Federal Building, in Cincinnati, houses the main offices for the Internal Revenue Service in the city. The IRS apologized Friday for what it acknowledged was "inappropriate" targeting of conservative political groups during the 2012 election to see whether they were violating their tax-exempt status

1. Why is the IRS under fire?

The agency acknowledged Friday that it gave extra scrutiny to conservative groups applying for tax-exempt status during the 2012 election cycle.

To deal with a flood of applications from so-called social welfare groups, employees at the IRS’s Cincinnati branch and possibly two California branches began flagging groups with the words “tea party” and “patriot” in their names for additional review, as well as those that sought to “criticize how the country is run” or educate the public on how to “make America a better place to live,” according to Lois Lerner, IRS director of exempt organizations.

IRS officials in Washington also participated in the process, The Washington Post reports.

Moreover, the agency was looking for “applications involving political sounding names” like “We the People” or “Take Back the Country,” according to an audit by the Treasury inspector general for tax administration.

In all, some 75 applications for 501(c)(4) status, almost all from conservative and tea party groups, were set aside for detailed review. The groups were asked to provide additional information that the IRS doesn’t typically require, such as donor lists.

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