New documents show Occupy groups also on IRS watch list

Gregory Korte | USA TODAY

WASHINGTON — Newly released IRS documents provide more evidence that progressive groups — including groups affiliated with the Occupy Wall Street movement — were placed on an IRS "watch list" and given secondary screenings for their tax-exempt status.

Those documents "raise serious questions" about the inspector general's report in May that first disclosed the scope of an IRS program to target political groups, said Rep. Elijah Cummings, D-Md., the top Democrat on the House Oversight Committee.

But the documents also suggest that the Internal Revenue Service saw the Tea Party as a separate class. The notes of a July 28, 2010, workshop in Cincinnati, for example, instructed front-line screeners to "err on the side of caution" and "re-emphasize" that all potential political groups were to be marked for more investigation. The notes also said that "'Progressive' applications are not considered 'Tea Parties.'"

Tea Parties, patriot groups and groups affiliated with the conservative "9/12 project" were kept on an "emerging issues" list that caused their applications to be held up for 27 months even as progressive groups had their tax exemptions approved. Another key word revealed in the documents for the first time is "pink-slip program," an apparent reference to a conservative movement to "send Congress a pink slip" by voting members out of office.

The IRS defined Occupy groups as "organizations occupying public space protesting in various cities ... claiming social injustices due to 'big money' influence." It's unclear whether any Occupy-style or pink-slip groups ever applied for tax-exempt status. A search of IRS records shows that none had received it as of May.

An e-mail released by Cummings also shows the inspector general examined 5,500 e-mails from IRS employees in Cincinnati and found no evidence that the Tea Party targeting described in the May 14 report was politically motivated.

"The e-mail traffic indicated there were unclear processing directions and the group wanted to make sure they had guidance on processing the applications so they pulled them. This is a very important nuance," said a May 3 e-mail from the deputy inspector general for investigations.

The scope of that investigation wasn't included in the final report. Cummings said it was edited out.

J. Russell George, the Treasury Inspector General for Tax Administration, has repeatedly testified that there was no evidence of political motivation. But he also described his report as an "audit" and not an investigation, and said the report wasn't designed to answer the questions of why the targeting occurred.

"We stand by our report and its findings," said Karen Kraushaar, a spokeswoman for the inspector general.

Cummings said the documents "directly contradict numerous public accusations by congressional Republicans that the White House and other administration officials targeted Tea Party organizations for partisan political reasons."

He wants the Oversight Committee to bring the inspector general back to toccupestify next week "to explain why he failed to disclose this critical information."

Congressional Republicans, however, said the documents show Tea Party groups were indeed given more scrutiny.

"These documents, once again, refute misleading attempts to equate routine scrutiny of other groups involved in advocacy to the systematic scrutiny of Tea Party groups by IRS officials," said Frederick Hill, a spokesman for Rep. Darrell Issa, R-Calif., the chairman of the House Oversight Committee. "As has been documented, while 100% of Tea Party applications were systematically stopped and scrutinized for a 27-month period, at the same time dozens of progressive applications were approved by the IRS."

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