Fredreka Schouten and Gregory Korte, USA TODAY

An IRS official said groups with words %22tea party%22 or %22patriot%22 in applications were singled out

Many conservative organizations said they were being harassed by the IRS

Head of House investigating panel say further probes on the horizon

WASHINGTON — The Internal Revenue Service apologized Friday for subjecting Tea Party groups to additional scrutiny during the 2012 election, but denied any political motive.

Lois Lerner, who heads the IRS unit that oversees tax-exempt groups, said organizations that included the words "tea party" or "patriot" in their applications for tax-exempt status were singled out for additional reviews. Her remarks, which came at an American Bar Association gathering, were first reported by the Associated Press.

White House spokesman Jay Carney on Friday afternoon called the IRS action "inappropriate" and said the Obama administration supports a full investigation, suggesting the Treasury Inspector General for Tax Administration would have jurisdiction.

Lerner said the practice, initiated by low-level workers in Cincinnati, was wrong.

"It was an error in judgment, and it was not appropriate, but that's what they did," Lerner told reporters. She declined to talk about how many employees were involved and whether there would disciplinary action. "I think they were insensitive, or less sensitive than they should have been."

The error, she said, was in assuming that any group with "tea party" or "patriot" in its name necessarily needed more scrutiny for political activity just because of its name. About 300 groups that had applied for tax-exempt status were put into a "bucket" of cases needing further scrutiny, and of those, about a quarter had tea party affiliations.

That problem was compounded when examiners asked more intrusive questions in what's known as a "development" process. "Some of the development letters that were send were far too broad and include things like asking for the organization's donor list, which is not generally what we do," Lerner said.

Since the problem was discovered sometime last year, the IRS has approved about 130 of the original 300 applications, and about 25 have been withdrawn. The rest remain pending, and no application has been denied.

Lerner said she had never discussed the issue with Treasury or White House officials and could not say whether they knew of the problems before her apology Friday. She said her focus had been on fixing the problem.

House Majority Leader Eric Cantor, R-Va., announced Friday afternoon that the Republican-led chamber will investigate.



Earlier, Senate Minority Leader Mitch McConnell, R-Ky., asked the White House to conduct a government-wide review to ensure "that these thuggish practices are not underway at the IRS or elsewhere in the administration against anyone, regardless of their political views."

Tea Party groups said they were outraged by the IRS actions.

Jenny Beth Martin, the national coordinator of Tea Party Patriots, said the IRS workers involved should resign. "The IRS has demonstrated the most disturbing, illegal and outrageous abuse of government power," she said in a statement."This deliberate targeting and harassment of tea party groups reaches a new low in illegal government activity and overreach. It is suspicious that the activity of these 'low-level workers' was unknown to IRS leadership at the time it occurred."

Conservative groups complained during the election that they were being harassed by the IRS. They said the agency asked them an inordinate number of questions to justify their tax-exempt status, and 27 Tea Party groups joined with conservative lawyer Jay Sekulow of the American Center for Law and Justice to push back on the IRS.

Kentucky 9/12 Project is one of the conservative organizations that joined with Sekulow to complain of government overreach.

Its executive director, Eric Wilson, said his group applied for tax-exempt status in December 2010. He said the IRS responded with an 88-page questionnaire that sought all the organization's correspondence, the names of its members -- along with details of group's activity on Facebook and Twitter. It was eventually granted its nonprofit designation last month.

"I would love to say that I feel vindicated, but to think that the government has the capability to reach into the lives of people in our organization is not only scary but describes the times we live in today," Wilson said of the apology.

Certain tax-exempt charitable groups can conduct political activities but it cannot be their primary activity.

In March 2012, Rep. Charles Boustany Jr., R-La., asked the IRS to explain why it was "questioning new tax-exempt applicants, including grassroots political entities such as Tea Party groups, about their operations and donors."

In response, the IRS acknowledged last June that there were backlogs in processing tax-exempt determinations for political groups, which were attributed to a spike in applications during an election year. But IRS Deputy Commissioner Steven T. Miller assured Boustany at the time that the office "took steps to coordinate the handling of the cases to ensure consistency."

"Despite their unwillingness to cooperate, more than a year later, the IRS has now admitted to what we long suspected — it was targeting tea party groups," Boustany said in a statement Friday. "The IRS's 'too little too late' response is unacceptable, and I will continue to work to ensure there are protections in place so no American, regardless of political affiliation, has their right to free speech threatened by the IRS."

Contributing: David Jackson and Paul Singer

Follow @fschouten and @gregorykorte on Twitter.