Report: IRS knew of targeting in 2011

WASHINGTON - Senior Internal Revenue Service officials knew agents were targeting tea party groups as early as 2011, according to a draft of an inspector general's report obtained by the Associated Press that seemingly contradicts public statements by the IRS commissioner.

The IRS apologized Friday for what it acknowledged was "inappropriate" targeting of conservative political groups during the 2012 election to see if they were violating their tax-exempt status. The agency blamed low-level employees, saying no high-level officials were aware.

But on June 29, 2011, Lois G. Lerner, who heads the IRS division that oversees tax-exempt organizations, learned at a meeting that groups were being targeted, according to the watchdog's report. At the meeting, she was told that groups with Tea Party, Patriot, or 9/12 Project in their names were being flagged for additional and often burdensome scrutiny, the report says.

The 9/12 Project is a group started by conservative TV personality Glenn Beck.

Lerner instructed agents to change the criteria for flagging groups "immediately," the report says.

The Treasury Department's inspector general for tax administration is expected to release the results of a nearly yearlong investigation in the coming week. The AP obtained part of the draft report, which has been shared with congressional aides.

Among the other revelations, on Aug. 4, 2011, staffers in the IRS's Rulings and Agreements Office "held a meeting with chief counsel so that everyone would have the latest information on the issue."

On Jan, 25, 2012, the criteria for flagging suspect groups were changed to, "political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform/movement," the report says.

While this was happening, several committees in Congress were writing numerous letters to IRS Commissioner Douglas Shulman to express concern because tea party groups were complaining of IRS harassment.

In Shulman's responses, he did not acknowledge targeting of tea party groups. At a congressional hearing March 22, 2012, Shulman was adamant in his denials. "There's absolutely no targeting. This is the kind of back and forth that happens to people" who apply for tax-exempt status, Shulman said at the House Ways and Means subcommittee hearing.

The portion of the draft report reviewed by the AP does not say whether Shulman or anyone else in the Obama administration outside the IRS was informed of the targeting. It is standard procedure for agency heads to consult with staff before responding to congressional inquiries, but it is unclear how much information Shulman sought.

The IRS has not said when Shulman found out that tea party groups were targeted.

Shulman was appointed by President George W. Bush, a Republican. His six-year term ended in November. President Obama has yet to nominate a successor. The agency is now run by an acting commissioner, Steven Miller.

The IRS said in a statement Saturday that the agency believes the timeline in the IG's report is correct, and supports what officials said Friday.

"IRS senior leadership was not aware of this level of specific details at the time of the March 2012 hearing," the statement said. "The timeline does not contradict the commissioner's testimony. While exempt organizations officials knew of the situation earlier, the timeline reflects that IRS senior leadership did not have this level of detail."