Many conservative groups complained during the 2012 election that they were being harassed by the IRS. They accused the agency of frustrating their attempts to become tax exempt by sending them lengthy, intrusive questionnaires.
The forms, which the groups have made available, sought information about group members' political activities, including details of their postings on social networking websites and about family members.
In some cases, the IRS acknowledged, agents inappropriately asked for lists of donors.
There has been a surge of politically active groups claiming tax-exempt status in recent elections — conservative and liberal. Among the highest profile are Republican Karl Rove's group Crossroads GPS and the liberal Moveon.org.
These groups claim tax-exempt status under section 501 (c) (4) of the federal tax code, which is for social welfare groups. Unlike other charitable groups, these organizations are allowed to participate in political activities, but their primary activity must be social welfare.
That determination is up to the IRS.
The number of groups filing for this tax-exempt status more than doubled from 2010 to 2012, to more than 3,400. To handle the influx, the IRS centralized its review of these applications in an office in Cincinnati.
Lerner said on Friday this was done to develop expertise among staffers and consistency in their reviews. As part of the review, staffers look for signs that groups are participating in political activity. If so, IRS agents take a closer look to make sure that politics isn't the group's primary activity.
As part of this process, agents in Cincinnati came up with a list of things to look for in an application. As part of the list, they included the words "tea party" and "patriot," Lerner said.
"It's the line people that did it without talking to managers," Lerner told the AP on Friday. "They're IRS workers, they're revenue agents."
In all, about 300 groups were singled out for additional review, Lerner said. Of those, about a quarter were singled out because they had "tea party" or "patriot" somewhere in their applications.
Lerner said 150 of the cases have been closed and no group had its tax-exempt status revoked, though some withdrew their applications.
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