HIGHLIGHTS

INAPPROPRIATE CRITERIA WERE

intervention was started soon after receipt, no

USED TO IDENTIFY TAX-EXEMPT

work was completed on the majority of these

APPL ICAT IONS FOR REVIEW

applications for 13 mo nths. This was due to delays in receiving assistance from the Exempt

Highlights

Organizations function Headquarters office. For the 296 total political campaign intervention applications TIGTA reviewed as of December 17, 2012, 108 had been approved,

Final Report i ssu ed on May 14 , 201 3

28 were withdrawn by the applicant, none had been denied, and 160 were open from 206 to Highlights of Reference N umber: 2013-10-053 1,138 calendar days (some for more than to the Internal Revenue Service Acting three years and crossing two election cycles). Commissioner, Tax Exempt and Government Entities Division. More than 20 months after the initial case was identified, processing the cases began in

IMPACT ON TAXPAYERS

earnest. Many organizations received request s Early in Calendar Year 2010, the IRS began for additional information from the IRS that using inappropriate criteria to identify included unnecessary, burdensome questions organizations applying for tax-exempt status to (

e.g.

, lists of past and futur e donors). The IRS review for indications of significant political later informed some organizations that they did campaign intervention. Although the IRS has not need to provide previously requested taken some action, it will need to do more so information. IRS officials st ated that any donor that the public has reasonable assurance that information received in response to a request applications are processed without from its Determinations Unit was later destroyed. unreasonable delay in a fair and impartial

WHAT TIGTA RECOMMEND ED

manner in the future. TIGTA recommended that the IRS finalize the

WHY TIGTA DID THE AUDIT

interim actions taken, better document the TIGTA initiated this audit based on concerns reasons why applications potentially involving expressed by members of Congress. The political campaign intervention are chosen for overall objective of this audit was to determine review, develop a process to track requests for whether allegations were founded that the IRS: assistance, finalize and publish guidance, 1) targeted specific groups applying for develop and provide training to employees tax-exempt status, 2) delayed processing of before each election cycle, expeditiously resolve targeted groups’ applications, and 3) requested remaining political campaign intervention cases unnecessary information from targeted groups. (some of which have been in process for three years), and request that social welfare

WHAT TIGTA FOUND

activity guidance be developed by the Department of the Treasury. The IRS used inappropriate criteria that identified for review Tea Party and other In their response to the report, IRS officials organizations applying for tax-exempt status agreed with seven of our nine recommendations based upon their