POLITICS
09/05/2014 02:59 pm ET Updated Sep 05, 2014

Senate Probe Of IRS Scandal Finds Liberals Targeted Too

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WASHINGTON -- The latest congressional report on the Internal Revenue Service's botched review of nonprofit status applications by politically active groups finds no evidence of intentional wrongdoing or political bias.

After news broke that the IRS had ramped up reviews of such groups as they applied for tax breaks -- with most of the focus on conservative nonprofits -- Congress launched numerous probes into the agency's activities, and allegations flew that the IRS had been used to target President Barack Obama's opponents.

None of those investigations, however, have found evidence of intentional wrongdoing. The latest yearlong effort, by the Senate's Permanent Subcommittee on Investigations, comes to the same conclusion in a lengthy report released Friday.

The report echoes the results initially found by the Treasury Inspector General for Tax Administration, but also criticizes that early inquiry for leaving out the liberal groups that also suffered excessive scrutiny.

"A review of nearly 800,000 pages of documents and the conduct of nearly two dozen IRS and TIGTA employee interviews produced no evidence of political bias by the IRS against conservative groups that filed 501(c)(4) [tax-exempt] applications, a finding which is consistent with TIGTA’s June 2014 letter stating that the TIGTA audit 'found no evidence of political bias,'" the latest report says.

What the IRS was guilty of, according to the Senate committee report, was using "inappropriate screening criteria when it flagged for increased scrutiny applications based upon the applicants' names or political views rather than direct evidence of their involvement with campaign activities."

But the new report faults the inspector general's office for igniting a false furor over the targeting of conservatives, while its early evaluation ignored liberal groups that had received extra scrutiny based on having names with words such as "ACORN," "Occupy" and "progressive."

The inspector general, J. Robert George, and others in his office ignored evidence brought to their attention regarding liberal targeting, even as George was testifying to various congressional committees, the new report found. IRS officials and a lawyer in George's office had informed the inspector general that liberal groups were targeted in "be on the lookout" notices, or BOLOs, the report says.

"Even after learning about them, the senior TIGTA officials remained silent for weeks about the BOLO entries for liberal groups, and provided incomplete and inaccurate testimony about them at Congressional hearings," the report says. "When the BOLO listings for liberal groups were finally disclosed by Members of Congress and the media, senior TIGTA officials insisted that the IRS had not disclosed those listings during the TIGTA audit, despite ample evidence to the contrary."

The investigations subcommittee is chaired by Sen. Carl Levin (D-Mich.). In a dissent included in the 228-page document, the panel's ranking member, Sen. John McCain (R-Ariz.), argues that it's the committee that is ignoring real bias by the IRS.

"The Majority’s interpretation of the evidence fails to capture the extent of the IRS's bias against conservative groups and flagrant abuse of power," McCain said in a statement.

"Our tax system should not -– and cannot -– be used as a weapon to target political opponents, as the IRS has clearly done, especially when that agency is, at times, tasked with administering laws that involve political free speech," he added. "This troubling scandal raises serious concern about the integrity of our nation's tax collectors and requires further investigation as damaging facts continue to come to light."

The Senate subcommittee is continuing to investigate, focusing in particular on Lois Lerner, the former IRS official who oversaw the exempt organizations division and who pleaded the Fifth Amendment in refusing to testify about the targeting. A key issue has been the retrieval of emails lost in a crash of her hard drive. The Senate report says that it has reviewed some 67,000 of those emails.

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