Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Former IRS Chief: "I Certainly Am Not Personally Responsible" for Tea Party Scandal

| Tue May. 21, 2013 2:00 PM PDT
Former IRS Commissioner Doug Shulman.

Former IRS Commissioner Douglas Shulman, a George W. Bush appointee who ran the tax agency when low-level employees wrongly singled out conservative groups for special scrutiny, testified on Tuesday before Congress for the first time since the scandal erupted on May 10. Senators hoping for new revelations or a mea culpa from Shulman, however, were left wanting. He said little about why IRS staffers targeted tea party groups and others for some 18 months, and he repeatedly downplayed his own role.

But one thing was clear from the hearing: The fallout from the IRS' tea party debacle isn't over, and its implications may spill over into campaign finance rules. J. Russell George, the Treasury Department inspector general who investigated the IRS' actions, said his office will be auditing how the IRS oversees politically active nonprofit groups and presumably how the agency determines which nonprofits are too political. That's potentially big news for the money-in-politics world: Nonprofits spent hundreds of millions of dollars during the 2012 campaign, and as the IRS scandal has further revealed, the agency's process for determining how much politicking by a group runs afoul of regulations is vague and confusing.

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White House Learned of IRS Tea Party Probe Early—But Didn't Tell Obama

| Tue May. 21, 2013 7:23 AM PDT

President Obama's chief of staff and the White House's top lawyer got wind of an inspector general's investigation into the IRS' singling out of tea partiers and conservative groups several weeks before the report went public. But those officials, according to press secretary Jay Carney, did not tell Obama. The president says he learned about the IRS' screw-up only after an agency director apologized on Friday, May 10, for employees having targeted conservative groups—an apology that went viral.

Carney told reporters Monday it was "appropriate" that Obama wasn't told of the damning IG report beforehand. And the president, he said, wasn't angry to not have been given early notice. "He believes it's entirely appropriate that, you know, some matters are not appropriate to convey to him and this is one of them," Carney said.

As we've reported, a Treasury Department inspector general, at the behest of angry members of Congress, spent nine months probing whether IRS staffers targeted tea party groups and other right-leaning conservative outfits who had applied for tax-exempt status under the 501(c)(4) section of the tax code. Although staffers did in fact zero in on conservative groups, the IG's report concluded that political bias did not play a role. Instead, staffers used "inappropriate criteria"—catchwords such as "tea party," "patriot," or "9/12 Project" (the latter a creation of conservative talk show host Glenn Beck)—to look for groups that might've been too involved in politics. (Groups that file their taxes under 501(c)(4) can dabble in politics, but it can't be their "primary activity.") IRS employees got away with this due to "insufficient oversight" by the higher-ups in Washington, the report found.

Testifying before Congress last week, Steven Miller, the acting IRS commissioner who will soon resign as a result of the agency's tea party debacle, echoed the IG's findings. He said IRS employees made "foolish mistakes" and that the agency's behavior was "obnoxious." But those employees did not have a grudge against conservative groups. Their errors, Miller said, "were made by people trying to be more efficient in their workload selection."

"What did they know" and "when did they know it" are two big questions looming over the IRS scandal. Here's what we know right now: Almost a month before IG's report came out last Tuesday, a staffer in the office of White House counsel Kathryn Ruemmler learned of the report. Ruemmler herself was briefed on April 24. Soon after, she informed Denis McDonough, Obama's chief of staff. Carney said the president was not told of the investigation because there was nothing to be done about it. Also the White House did not want to appear to be interfering with an inspector general's report on such a sensitive issue. There is no evidence yet that Obama or his top aides knew about the investigation before this year.

Here is the IG's report:

 

IRS Speaks Out: We Messed Up, But We Would've Scrutinized Tea Partiers Anyway

| Fri May. 17, 2013 11:35 AM PDT

Finally, the IRS is giving a full accounting of how and why its staffers singled out tea partiers and other conservative groups seeking tax-exempt status. The quick version: We had the right idea but went about it all wrong.

On Friday morning, Steven Miller, the acting IRS commissioner set to resign due to the scandal, appeared before the House ways and means committee and testified that several IRS employees made "foolish mistakes" by using catchwords like "tea party" and "patriots" as they picked through hundreds of nonprofit applications from groups that might be involved in politics. Miller described his agency's behavior as "obnoxious." Yet he denied that the IRS vetters who handled all those applications for groups wanting 501(c)(4) nonprofit status—who were working out of a field office in Cincinnati—acted out of political bias. Instead, he said the agency's errors "were made by people trying to be more efficient in their workload selection."

Prior to Miller's testimony, the IRS itself took the unusual step of posting on its website 14 questions related to the tea party debacle and the agency's official response to each one. It's an interesting and useful document.

The IRS insists that its staffers, as Miller emphasized, were wrong to target groups with "tea party" or "patriots" in their name. However, the agency says that it would've zeroed in on tea partiers and other conservative groups anyway, as it looked for applicants that might be getting too involved in politics. They sought out politically-inclined groups because 501(c)(4) nonprofits are allowed to dabble in politics but cannot make it their "primary activity." But as they looked for groups that might be too political, they used inappropriate shortcuts.

"IRS employees had seen cases of organizations with the name Tea Party in which political activity was an issue that needed to be reviewed for compliance with legal requirements," the agency says. "Because of the increased inventory of applications, this inappropriate criterion was used as a shortcut to centralize similar cases." In other words, as a booming number of tea party outfits across the country were filing for tax-exempt status, the folks in charge of reviewing such applications—and making sure applicants were not engaged in so much political action that they would not qualify for this tax status—found it convenient to flag groups with "tea party," "patriot," and "9/12 Project" in their name.

The agency also says on its website that it found "no indication of political bias"—echoing the Treasury Department inspector general who investigated the tea party mess. The IRS staffers in Cincinnati didn't have a grudge for the tea party; they felt, it seems, that tea partiers were simply more prone to get involved in politics.

The agency also offered a few basics on how it handles nonprofit applications. All applications go through Cincinnati, where there are less than 200 people who directly handle those files. Because the agency saw an increase in 501(c)(4) applications from potentially politically active groups, staffers there pooled all those applications together and gave a few selected employees the job of scrutinizing those applications.

Some more interesting nuggets in the Q-and-A:

  • Not only has the IRS seen an uptick in the number of 501(c)(4) applications, it says the number of groups applying that could become involved in politics has risen as well.
     
  • The IRS admits it mistakenly caused "inappropriate delays" for groups applying for tax-exempt status, and made "over-expansive information requests" of the groups it singled out for extra scrutiny. The IRS blamed this on "ineffective processes."
     
  • In 2010 and 2011, as we've reported, IRS staffers specifically looked for groups with "tea party" or "patriots" in their name. However, of the nearly 300 groups with applications flagged by IRS staffers, the vast majority did not have either of those words in their name.

The IRS Q-and-A links to a list of almost 170 nonprofit groups given special scrutiny by IRS staffers but later approved for 501(c)(4) status. The entities on that list run the political gamut and include local tea party groups, statewide progressive organizations such as Progress Texas and Progress Missouri Inc., former Sen. Russ Feingold's Progressives United outfit, and issue-based organizations such as Californians Against Higher Health Costs and Homeless But Not Powerless.

Here is the full list from the IRS' website:

 
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