Full IRS Inspector General Report On "Inappropriate" Targeting Of Conservative Groups

Tyler Durden's picture

We are currently reading through the just released 54 page report from the IRS' Acting Deputy Inspector General Michael McKenney, but for now here are the key excerpts from the findings section.

From Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review

The mission of the IRS is to provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. According to IRS Policy Statement 1-1, IRS employees accomplish this mission by being impartial and handling tax matters in a manner that will promote public confidence. However, the criteria developed by the Determinations Unit gives the appearance that the IRS is not impartial in conducting its mission. The criteria focused narrowly on the names and policy positions of organizations instead of tax-exempt laws and Treasury Regulations. Criteria for selecting applications for the team of specialists should focus on the activities of the organizations and whether they fulfill the requirements of the law. Using the names or policy positions of organizations is not an appropriate basis for identifying applications for review by the team of specialists.

* * *

The Determinations Unit developed and used inappropriate criteria to identify applications from organizations with the words Tea Party in their names. These applications (hereafter referred to as potential political cases) were forwarded to a team of specialists for review. Subsequently, the Determinations Unit expanded the criteria to inappropriately include organizations with other specific names (Patriots and 9/12) or policy positions. While the criteria used by the Determinations Unit specified particular organization names, the team of specialists was also processing applications from groups with names other than those identified in the criteria. The inappropriate and changing criteria may have led to inconsistent treatment of organizations applying for tax-exempt status. For example, we identified some organizations’ applications with evidence of significant political campaign intervention that were not forwarded to the team of specialists for processing but should have been. We also identified applications that were forwarded to the team of specialists but did not have indications of significant political campaign intervention. All applications that were forwarded to the team of specialists experienced substantial delays in processing. Although the IRS has taken some action, it will need to do more so that the public has reasonable assurance that applications are processed without unreasonable delay in a fair and impartial manner in the future.

The Determinations Unit developed and began using criteria to identify potential political cases for review that inappropriately identified specific groups applying for tax-exempt status based on their names or policy positions instead of developing criteria based on tax-exempt laws and Treasury Regulations.

According to media reports, some organizations were classified as I.R.C. § 501(c)(4) social welfare organizations but operated like political organizations.  Soon thereafter, according to the IRS, a Determinations Unit specialist was asked to search for applications with Tea Party, Patriots, or 9/12 in the organization’s name as well as other “political-sounding” names. EO function officials stated that, in May 2010, the Determinations Unit began developing a spreadsheet that would become known as the “Be On the Look Out” listing (hereafter referred to as the BOLO listing),15 which included the emerging issue of Tea Party applications. In June 2010, the Determinations Unit began training its specialists on issues to be aware of, including Tea Party cases. By July 2010, Determinations Unit management stated that it had requested its specialists to be on the lookout for Tea Party applications. In August 2010, the Determinations Unit distributed the first formal BOLO listing. The criteria in the BOLO listing were Tea Party organizations applying for I.R.C. § 501(c)(3) or I.R.C. § 501(c)(4) status. Based on our review of other BOLO listing criteria, the use of organization names on the BOLO listing is not unique to potential political cases.16 EO function officials stated that Determinations Unit specialists interpreted the general criteria in the BOLO listing and developed expanded criteria for identifying potential political cases.17 Figure 3 shows that, by June 2011, the expanded criteria included additional names (Patriots and 9/12 Project) as well as policy positions espoused by organizations in their applications.

Determinations Unit employees stated that they considered the Tea Party criterion as a shorthand term for all potential political cases. Whether the inappropriate criterion was shorthand for all potential political cases or not, developing and using criteria that focuses on organization names and policy positions instead of the activities permitted under the Treasury Regulations does not promote public confidence that tax-exempt laws are being adhered to impartially. In addition, the applications for those organizations that were identified for processing by the team of specialists experienced significant delays and requests for unnecessary information that is detailed later in this report.

* * *

While the team of specialists reviewed applications from a variety of organizations, we determined during our reviews of statistical samples of I.R.C. § 501(c)(4) tax-exempt applications that all cases with Tea Party, Patriots, or 9/12 in their names were forwarded to the team of specialists.

We determined this through two statistical samples of 338 (7.5 percent) from a universe of 4,510 I.R.C. § 501(c)(4) tax-exempt applications filed during May 2010 through May 2012 that were not forwarded to the team of specialists. See Appendix I for details on our sampling methodology.

* * *

The team of specialists stopped working on potential political cases from October 2010 through November 2011, resulting in a 13-month delay, while they waited for assistance from the Technical Unit. Figure 5 illustrates significant events and delays concerning potential political cases. For a comprehensive timeline of events related to potential political cases, see Appendix VII.

* * *

After receiving draft guidance in November 2011, the team of specialists began sending requests for additional information in January 2012 to organizations that were applying for tax-exempt status. For some organizations, this was the second letter received from the IRS requesting additional information, the first of which had been received more than a year before this date. These letters requested that the information be provided in two or three weeks (as is customary in these letters) despite the fact that the IRS had done nothing with some of the applications for more than one year. After the letters were received, organizations seeking tax-exempt status, as well as members of Congress, expressed concerns about the type and extent of questions being asked. For example, the Determinations Unit requested donor information from 27 organizations that it would be required to make public if the application was approved, even though this information could not be disclosed by the IRS when provided by organizations whose tax-exempt status had been approved. Figure 7 shows an example of requests sent to organizations applying for tax-exempt status regarding donors.

As part of this effort, EO function Headquarters office employees reviewed the additional information request letters prepared by the team of specialists and identified seven questions that they deemed unnecessary. Subsequently, the EO function instituted the practice that all additional information request letters for potential political cases be reviewed by the EO function Headquarters office before they are sent to organizations seeking tax-exempt status. In addition, EO function officials informed us that they decided to destroy all donor lists that were sent in for potential political cases that the IRS determined it should not have requested. Figure 8 lists the seven questions identified as being unnecessary.

* * *

And so on.

Full report below

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
idea_hamster's picture

"Statements in the case file criticize how the country is being run."

OK -- that's pretty f'd up.  I guess I just made the list.

SilverIsKing's picture

"Statements in the case file criticize how the country is being run."

Did it specify which country they were referring to?

idea_hamster's picture

Nice!  I know a lawyer when I smell one....

GetZeeGold's picture



So basically.....it's tyranny.


No wonder Obama made that speech at Ohio.

Big Slick's picture

Funny that all this is happening at the same time the IRS just released its new slogan: 

“Waiting for January 2014 when we are in charge of your healthcare … You ain’t seen nothing yet!”

Big Slick's picture

Big thanks Chief Justice Roberts too.  Love to thank him personally.

smlbizman's picture

were is the guy that says......as long as you aint doin nothin wrong you aint gots to worry 'bout nothin....

TheFourthStooge-ing's picture


were is the guy that says......as long as you aint doin nothin wrong you aint gots to worry 'bout nothin....

He and the guy that says, "America, love it or leave it," are scratching their heads, jaws agape and drooling, trying to figure out a bumper sticker they saw which read, "America, fix it or fuck it."

The Thunder Child's picture

POLITICO – Larry Conners, a veteran local news anchor at KMOV Channel 4 in St. Louis, says that the Internal Revenue Service has been targeting him since an April 2012 interview he conducted with President Obama — a fact that he dismissed as coincidence until the recent reports about the IRS targeting conservative groups.

“Shortly after I did my April 2012 interview with President Obama, my wife, friends and some viewers suggested that I might need to watch out for the IRS. I don’t accept ‘conspiracy theories’, but I do know that almost immediately after the interview, the IRS started hammering me,” Connors wrote on his Facebook page late Monday night.

Connors did not specify how the IRS has been “hammering” him. He did not immediately respond to a request for clarification.

According to his account, his questions for Obama touched on the economy and spending but were not exceptional in nature. But following “allegations that the IRS focused on various groups and/or individuals questioning or criticizing government spending, taxes, debt or how the government is run,” Connors now believes there may be a possible connection.

“Can I prove it? At this time, no,” he wrote. “But it is a fact that since that April 2012 interview … the IRS has been pressuring me.”



wee-weed up's picture




1)  Appoint a special prosecutor.

2)  Throw the guilty in jail and throw away the key.

3)  Abolish the IRS.

living on the edge's picture

I agree with your 3-comments above. I would have posted it myself but I have this irrational fear that the gov will seek out my true identity and seek to destroy myself, my family and all my contacts, friends and associates.

mick_richfield's picture

Fuck them.

This is my country. 

Not theirs.

wee-weed up's picture

You were added to Obama's shit-list with your very first ZH post.

G-R-U-N-T's picture

'The mission of the IRS is to provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all."


Yeah, right! Good lord!!!

freewolf7's picture

"wrong" gets bigger all the time.

TheFourthStooge-ing's picture


"wrong" gets bigger all the time.

It begins as coincidence or 'conspiracy theory', grows a little and becomes an allegation, undergoes mitosis to become a misunderstanding, then, as the mitotic rate increases, it becomes 'inappropriate' and continues to grow...

G-R-U-N-T's picture

Indeed, Nanny...enough said!

The Alarmist's picture

Tyranny?  That's an old-fashioned concept, like that Constitution thingy.  Like 300 years old, or something.  Hardly relevant in our modern world with all of its modern problems.  

We're talking efficiency and transparency here ... We can't help you if we don't know more about you.  What's not to like about that?

Chupacabra-322's picture

Their criminality isn't "hidden in plain view" anymore. It's all out in the open for everyone to see.

Fast & Furious



MF Global



NDAA / Patriot Act I II / John Warner Defense Act

Illegal Wire Tapping

Illegal Wars of Aggression

War Crimes / Murder

Arming, Funding, and Training AL CIA duh and destabilization campaigns into soverign countries

CIA drug running and arming the Sinoloa Mexican drug cartels to fund the Black Ops and laundering the money through the TBTF tax payer bail out Criminal Banksters.

General Decline's picture

Right. Does anybody really believe that the police state is afraid of the tea party? With all the breads & circuses available? I don't think so. I think this story was leaked intentionally to promote more division.
To reinforce the right/left paradigm.

12ToothAssassin's picture

The most transparent administration in history.

AE911Truth's picture

You left out one:

9/11 WTC Demolition

And WTF is their reference above to 9/12? A consistent typo? I don't think so. So even this report is a lie and a cover-up. They clearly did not want the public to know the IRS was targeting the 9/11 Truth movement.

That's right suckers the whole world knows about the Thermite residue in the tower rubble.

General Decline's picture

"They clearly did not want the public to know the IRS was targeting the 9/11 Truth movement."

Wrong. These guys know how to keep a secret. People know about this because they want people to know about this. What strikes more fear into the heart of the average American citizen than an IRS audit?

Stay in line peasant or we will make your life a living hell.

Ident 7777 economy's picture



" These guys know how to keep a secret. "




Not buying that 9/11 truther crap, its "Infotrash"


The Thunder Child's picture

Fuck off troll, we all know 9/11 was a false flag here on ZH. Go peddle your shit on the CNN comments...

Ident 7777 economy's picture

And I keep telling you, in a word: no, puss.

nmewn's picture

Don't fall for it...stay on topic.

General Decline's picture

"Not buying that 9/11 truther crap, its "Infotrash"

The. What crap are you buying? That 19 Muslims with box cutter dropped wtc 7 at free fall speed? That they tuned those two towers into dust with aluminum, plastic and jet fuel?


sun tzu's picture

Everything turned into dust except their passports, which were found in perfect condition where the buildings collapsed. How anyone believes the government story is beyond me

The Thunder Child's picture


Thank you for spotting that, I looked at the 9/12 on the pie chart and it didn't click for some reason.

Ident 7777 economy's picture








"Moran", the 9/12 movement differs from the 9/11 'truthers', in one BIG way: SANITY.



"The 9/12 Project is a volunteer based, non-partisan movement focusing on building and uniting our communities back to the place we were on 9/12/2001"


walküre's picture

US CIA Embassies recruiting Russian intelligence personnel on their own turf


US EMBASSIES are fronts for the CIA all over the fucking planet

US of A is a disease

Why are Germany, Japan, China, Russia still putting up with the Dollar and Washington bullshit?

Chupacabra-322's picture

@ walkure,

+ 1,000,000,000,000

otto skorzeny's picture

because all of those countries know that the US is full of morons that will buy their crappy goods.

Element's picture

US Embassies always have been CIA haunts, nothing changed on that front since 1950.

What I want to know is;

(1) Why is the FBI, which is a US DOMESTIC criminal investigation agency infesting my country, and well as many others?

(2) Why the US wants to be immune to prosecution within other countries - do they feel they'll need that? Fucking nobody should be considered 'above' the law, under any circumstances! Or everyone should be.

(3) Why does the US's DOMESTIC National Guard even have F-16s, let alone why do they deploy internationally, or are dropping laser-guided 500lb bombs on people walking down the street in Iraq?! WTF!?


Talk about fucking inappropriate 'MISSION CREEP'!!

mofreedom's picture

c-s'r...march on dc right fing now...flood the cesspool on the potomic.

imapopulistnow's picture

"as appropriate, list all donors and donees from which you may have contracted a communicable disease."

CH1's picture

So basically.....it's tyranny.

Exactly. But tyranny with banners and music. (Bread and circuses too, of course.)

CH1's picture

So basically.....it's tyranny.

Exactly. But tyranny with banners and music. (Bread and circuses too, of course.)

A Lunatic's picture

This is a clear cut case of HATE CRIME.

imapopulistnow's picture

Elderly rural folks s/b a covered class under this administration.

The Shootist's picture

I wonder what Washington or Jefferson thought of the IRS? oh wait, there wasn't one...

Real Estate Geek's picture

"Inappropriate" is such an innocuous word. As George Will said, it's inappropriate to use the salad fork on ones entree.

This is criminal and frankly terrifying.

Shell Game's picture

It is treason to question any and all Banana Republics.

McMolotov's picture

Seriously, the wheels are coming off this fucker. It's gonna be a cruel, cruel, cruel summer here in our Bananarama republic.