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Watchdog defends review of IRS conservative scrutiny

J. Russell George, Treasury Inspector General for Tax Administration of the U.S. Treasury, testifies before the Senate Finance Committee in
J. Russell George, Treasury Inspector General for Tax Administration of the U.S. Treasury, testifies before the Senate Finance Committee in

By Patrick Temple-West

WASHINGTON (Reuters) - The Treasury Inspector General for Tax Administration, facing criticism of his findings that tax authorities targeted Tea Party-linked groups for extra scrutiny, said his office did not find evidence that the term "progressives" was used to target liberal-leaning groups.

As the Internal Revenue Service Tea Party controversy turned inward on itself, with investigators themselves under scrutiny, J. Russell George said in a letter to Democrats that his office found the IRS did not scrutinize conservative and progressive groups equally.

George said that 30 percent of the groups with "progressive" in their names appeared to get extra scrutiny for potential political activity, compared 100 percent for "Tea Party" groups.

Republicans said George's letter weakens the Democrats argument that the IRS targeted liberal groups, too.

"So far, the evidence only shows conservatives being systematically targeted by the IRS, not just flagged," Republican Ways and Means Committee Chairman Dave Camp said.

The letter was released ahead of the latest in a series of congressional hearings on the controversy, which led last month to the ouster of the chief of the IRS by President Barack Obama and an FBI investigation.

As weeks have passed, the IRS fight has become politically charged with Republicans trying to pin the IRS practices to the White House, while Democrats have tried to put a lid on the affair and turn attention to George.

George signed a May 14 audit report that accused the IRS of targeting applications for tax-exempt status from non-profit conservative political groups, such as those aligned with the Tea Party movement, for extra scrutiny. The report set off a furor surrounding the IRS.

Democrats argued George's letter said for the first time that some liberal groups were given scrutiny alongside conservative groups.

Democratic Representative Sander Levin said on Thursday that George was "not forthright" with members of Congress about the level of scrutiny applied by the IRS to liberal groups - such as those that might have "progressive" in their name - when they applied for tax-exempt status.

Ways and Means Committee Democrats on Thursday asked Camp to have George testify about the report's findings.

GOP REQUESTED REPORT

Republican Darrell Issa, chairman of the House Oversight and Government Reform Committee that is leading the IRS investigation, said in a statement that Democrats were blowing out of proportion the use of "progressive" key words by equating liberal groups' experiences with that of Tea Party groups.

Issa requested the TIGTA report in 2012 after Tea Party groups complained that their applications were being delayed.

In the letter, addressed to Levin, George wrote, "We reviewed all cases that the IRS identified as potential political cases and did not limit our audit to allegations related to the Tea Party."

The acting IRS chief, Danny Werfel, told lawmakers on Thursday some tax-exempt applicants will be getting letters soon saying they are eligible for fast-track approval.

In its internal investigation, the IRS is looking for possible criminal intent as well as political bias by staffers who gave extra scrutiny to the conservative applicants, Werfel said at a Ways and Means Committee hearing. So far, the IRS has found no intentional wrongdoing by employees.

(Additional reporting by Kim Dixon; Editing by Kevin Drawbaugh and Bill Trott)

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