IRS gave liberals a pass; Tea Party groups put on hold

Gregory Korte | USA TODAY

WASHINGTON -- In the 27 months that the Internal Revenue Service put a hold on all Tea Party applications for non-profit status, it approved applications from similar liberal groups, a USA TODAY review of IRS data shows.

As applications from conservative groups sat in limbo, groups with obviously liberal names were approved in as little as nine months. With names including words like "Progress" or "Progressive," these groups applied for the same tax status and were engaged in the same kinds of activities as the conservative groups.

The controversial, 3-year-old strategy to manage the increasing number of political groups seeking tax-exempt status came under fire Tuesday. The agency's own inspector general blamed IRS leadership for "ineffective management."

The Justice Department wants to know if that was more than just mismanagement. Calling the IRS' actions "outrageous and unacceptable," Attorney General Eric Holder said Tuesday that he has asked the FBI to investigate. "We're examining the facts to see if there were any criminal violations," he said.

A federal official who has been briefed on the matter said the investigation could focus on potential violations of civil rights law, including targeting groups based on political affiliation and infringing free speech. The official, who is not authorized to comment publicly, said authorities could consider possible violations of the Hatch Act, which restricts political activities of government workers.

The IRS inspector general, in an audit issued Tuesday, said the agency used "inappropriate criteria that identified Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions" instead of evidence of political activity. The tax exemption requires that organizations have "social welfare" as their primary purpose, but IRS officials said the rules are unclear how much political activity they can engage in.

The White House says it knew nothing of the screening until a few weeks ago. In a statement Tuesday, President Obama said, "The report's findings are intolerable and inexcusable." Obama said he has directed Treasury Secretary Jack Lew "to hold those responsible for these failures accountable, and to make sure that each of the Inspector General's recommendations are implemented quickly, so that such conduct never happens again."

Contributing: Kevin Johnson