The criteria used by the IRS to flag groups based on their names or policy positions included left-leaning organizations and causes. | Andrew Caballero-Reynolds/AFP/Getty Images Audit indicates liberal nonprofits also got extra IRS scrutiny

A new report on the IRS’s treatment of nonprofit groups indicates the agency subjected numerous liberal-leaning groups to extra scrutiny when they sought tax-exempt status, the latest wrinkle in a saga that has mostly focused on how conservative groups were treated.

While the audit released Thursday by the Treasury Inspector General for Tax Administration doesn't discuss the political leanings of the additional groups it identified, the criteria used by the IRS to flag groups based on their names or policy positions included left-leaning organizations and causes like “ACORN Successors,” “Green Energy,” “Medical Marijuana,” and “Progressive.”


They were among 17 additional selection criteria discovered by TIGTA going back as far as 2004. Some of the targeted groups waited up to four years for the IRS to decide whether to grant them tax-exempt status.

When the scandal erupted in 2013, Republican lawmakers and conservative activists focused on the agency’s treatment of tea party and other right-leaning groups that had applied for tax-exempt status, which was exposed in a TIGTA audit that year. The issue consumed hundreds of hours of committee hearings and spawned numerous court cases that continue to this day.

Democrats cited Thursday’s report as vindication of their earlier claims that liberal-leaning groups were also caught up in the IRS practice.

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“While handled poorly, groups on both sides of the political spectrum were treated the same in their efforts to secure tax-exempt status," said Senate Finance Committee ranking member Ron Wyden (D-Ore.).

Ways and Means Chairman Kevin Brady (R-Texas) said, "Democrats should be outraged."

"The IRS targeted Americans based on their political beliefs. Both parties. They targeted heavily on the conservative side, but the point being — the IRS not only had no protections for taxpayers, they actively targeted Americans based on buzzwords,” he told reporters.

Gregory Kutz, the assistant inspector general who led the latest audit, declined to weigh in on the comments from Democrats, saying the watchdog had tried to avoid making judgments on potential political motivations in its 2013 report as well.

But Kutz also told reporters there were several key differences between that report and the follow-up more than four years later.

“Due to the unique nature of the 17 criteria, it is difficult to compare the criteria to each other, or to compare in aggregate to the criteria reviewed in the 2013 audit,” the inspector general pointed out in a statement.

Around 70 percent of the groups from the 2013 audit tagged for extra scrutiny were seeking 501(c)(4) status, which currently allows organizations to weigh in on political matters as long as that’s not the majority of their work. Most of the 146 groups discussed in the new report were applying for 501(c)(3) status, which does not allow for intervention in political campaigns.

The new report covered far fewer groups than the original 2013 audit, which examined close to 300 organizations seeking tax-exempt status.

And while some of the groups discussed in the new report faced extensive delays on their applications, most of the organizations had their applications processed in less than a year. Groups cited under the “progressive” criteria were even more likely to see their application move quickly, with 53 of 61 getting processed in under a year.

By contrast, Kutz said about five out of six groups discussed in the 2013 report saw delays lasting longer than a year.

The 17 criteria that the inspector general examined in the new report came from a group of 259 criteria that the IRS used to potentially single out applications for more scrutiny over about a decade, from August 2004 to June 2013. Benchmarks examined in the new report include “ACORN successors,” “progressive,” “green energy,” “healthcare legislation,” “medical marijuana” and “we the people.”

The IRS originally compiled those as a “touch and go” list, the precursor to the “be on the lookout,” or BOLO, lists that the IRS scrapped because of the tea party controversy. Still, Kutz stressed that many of the 259 criteria the agency had used over the years were meant to smoke out potential fraud or terrorism cases — the sort of singling out he said the IRS should be doing.

“We can’t say all 259 over time were good or bad,” Kutz said.

Of the 146 cases in the new report that had potential for political activity, 83 were ensnared by one of the 17 criteria, while the inspector general would only say that the other 63 occurred during that time period.

For its 2013 audit, the Treasury inspector general had access to a list that showed which cases were chosen for further review. But the IRS said it generally didn’t use those sorts of lists for the 17 criteria examined in the new report, and TIGTA said it only had a similar tracking sheet for one of the 17 — healthcare legislation.

To fill in the blanks, the watchdog tried to use other IRS sources to whittle down the original list of 900 cases, including interviewing more than 60 current and former IRS employees.

Only three of the 21 former IRS employees that TIGTA reached out to agreed to an interview. Kutz confirmed that Lois Lerner, the former IRS official at the center of the tea party controversy, did not speak with the inspector general.

CORRECTION: An earlier version of this report misstated the attribution for a quote from Sen. Ron Wyden.