Senate probe into IRS targeting of Tea Party groups issues mixed report

The probe by the Committee on Finance followed accusations by Republicans of IRS partisan activity in targeting groups mainly linked to the fiscally conservative Tea Party movement that had applied for tax-exempt status.

The main proposals agreed on by members of both parties in the report, which runs to over 400 pages, were:

- Making clear objective criteria that could prompt reviews of applications for tax exemption by 501(c)(4) non-profit groups, which are limited by law in political involvement.

- Revising the Hatch Act, which limits partisan political activity by government employees, to apply more rigorously to certain IRS and other federal workers dealing with these groups.

- Making the IRS division dealing with such groups track the age and cycle time of all its cases.

- Providing better training for IRS managers so they understand 501(c)(4) rules.

Separate sections of the report gave opposing views of the Republican members.

Republicans concluded that the IRS had chosen to look more closely at conservative groups.

"First, we found that the IRS systemically selected Tea Party and other conservative organizations for heightened scrutiny, in a manner wholly different from how the IRS

processed applications submitted by left-leaning and nonpartisan organizations," an executive summary said.

It also found an environment where political bias influences decisions, citing the example of Lois Lerner, who headed a unit involved in scrutinizing applications for tax-exempt status.

In May 2013, Lerner apologized for what she called "inappropriate" review of conservative groups' applications.

The IRS and other executive agencies began to scrutinize conservative organizations that had or had sought tax-exempt status soon after the administration of President Barack Obama had begun "a concerted effort to constrain spending on political speech," it said.

The Democratic summary said the process of reviewing applications was "plagued by inefficiency, bad judgment, bad management and unwarranted delay," but that the actions of IRS staff were not politically motivated and that there had been no influence by political appointees.

But, it said "...liberal and progressive groups were subject to the same mismanagement by the IRS as the conservative groups."

Also, there was no evidence Lerner was affected by her political beliefs in performing her duties, the summary said.

(Reporting by Eric Walsh; Editing by Lisa Shumaker)