Diving Deeper into the TIGTA IRS Audit

Inside the Treasury Department's Inspector General for Tax Administration investigation into the IRS scandal.

TIGTA IRS Audit Wordle

This post is the second in a series that explores aspects of the unfolding IRS Scandal, and, in particular, the TIGTA Audit. The first post from this series, looking at the different Non-Profit designations involved—can be found here. Note, all references to the audit contain two page numbers. The first corresponds to the page number that appears on the page of the document. The second refers to the page within the PDF.

[5/28 Update – Article was updated to correct a poorly worded sentence and add an additional finding and some additional context]

A week ago, the Treasury Department’s Inspector General for Tax Administration (TIGTA) released the findings of an investigation into the IRS’s Exempt Organization Division (EO). The EO oversees organizational requests for tax exempt status — in particular 501(c)3 and 501(c)4 status. One of the primary goals of the investigation was to determine whether or not the Determination’s Unit, based in Cincinnati Ohio, improperly targeted applications submitted by conservative groups. The release of the audit generated lots of news and commentary, the vast majority of which was focused on the first of three major findings in the report—namely that the Determination’s Unit used “inappropriate criteria to identify organizations applying for review for indications of significant political campaign intervention.” (Highlights/PDF page 2)

While the audit may seem old news, it remains the largest publicly released collection of verified facts about the IRS scandal. As such, it is impossible to have a grounded discussion of the scandal without understanding the contents of the report. Further given recent developments, like the decision of EO Director Lois Lerner to invoke the 5th Amendment in her recent appearance before Congress, it may very well be all of the major information we have for the foreseeable future.

The focus on the first finding—the use of inappropriate selection methods—has led many to miss a number of the report’s other important findings. Rather than falling back on pure partisanship and sensationalism as an explanation for this happening—though both have surely contributed—I’d like to suggest three reasons the reporting of the audit’s content have missed some of these points.

#1. The report’s non-linear structure

The body of the audit is arranged around TIGTA’s three main findings:

  • Section 1: “The Determinations Unit Used Inappropriate Criteria to Identify Potential Political Cases”
  • Section 2: “Potential Political Cases Experienced Significant Processing Delays”
  • Section 3: “The Determinations Unit Requested Unnecessary Information for Many Potential Political Cases”

Many media summaries of the audit appear to be built upon a mistaken belief that the three sections build on one another—i.e. need to be read in a linear fashion. That is simply not the case. While some of the information overlaps across the sections, each finding needs to be read as separate from the other two.

Unfortunately, the construction of the report, contributes to this confusion. Perhaps the most egregious example occurs in the highlights/summary section:

WHY TIGTA DID THE AUDIT
[…] The overall objective of this audit was to determine whether allegations were founded that the IRS: 1) targeted specific groups applying for tax-exempt status, 2) delayed processing of targeted groups’ applications, and 3) requested unnecessary information from targeted groups.
(Highlights/PDF p2)

It’s understandable why anyone reading this passage would see the three findings as building upon each other. However, the findings tell a different story.

Again, the first finding was that the Determination’s Office used inappropriate criteria to target certain conservative groups. More specifically TIGTA ruled that reviewers’ decision to flag applications based on the applying organization’s name and/or its policy statements—rather than their specified activities—was inappropriate because it gave the appearance of bias. Simply put, Tea Party and other conservative groups were “targeted,” in so much as their names, possibly among others, appeared on a BOLO, or “Be On the Look Out [for]” list created by and circulated within the Determinations department.

So, without a doubt, in the first section, the phrase “targeted” group refers specific conservative groups. However, in the second and third sections of the report, the phrase “targeted group” refers to all groups whose applications were put into the specialist review cue due to concerns over potential political involvement.

This gets to what I consider to be one of the most under-reported aspects of this story: while it’s true that conservatives have a lot to be pissed about, the fact is that, once a file was flagged for specialist review, all groups, regardless of political persuasion or ideology, received the exact same, unconscionably shitty treatment. All flagged applications experienced the same extreme delays in the processing of their documents. And likewise, many of these groups received the same, often intrusive requested for clarification.

#2. Gaps in information

Anyone who has done a close read of the audit will realize that it contains a number of information gaps. For example, a close read suggests that there were more terms on the BOLO list than discussed in the audit (see 6-7, PDF p12-3 — footnote 16 in particular). Because the section of the audit involving the BOLO list was restricted to the treatment of Conservative groups, the audit doesn’t provide additional information about whether or not this is the case. So we are left not knowing (a) how often BOLO lists were used in general, and (b) if other groups were being identified by their names as well. (As a side note: the Audit doesn’t ever find fault with using BOLO lists in general, simply the choice to using an organization’s name as a trigger for review).

Likewise, TIGTA make it clear that they were focused on investigating charges of inappropriate flagging of certain applications based on the BOLO list. The audit only discusses applications in terms of the sections of the BOLO list the Inspector General was investigating. No attempt was made to actually categorize the applications based on ideological or political alignment (see 8, PDF p14 — footnote 8 in particular). That means, for example, while we know that 1/3 of the applications flagged as “Potentially Political” contained the terms “tea party”, ” from the BOLO list—and are therefore assumed to be from Conservative groups—we have no idea about the contents or political alignment of the remaining 2/3rds of the flagged applications. That means, for example, while we know that 1/3 of the applications flagged as “Potentially Political” contained the terms “tea party”, “patriots”, and “9/12″  from the BOLO list, but we have no idea about the contents or political alignment of the remaining 2/3rds of the flagged applications. [5/28 – Updated for clarity based on feedback from Andy and others].

#3. Reporting cycles

Sadly, the final reason that some of these points have been missed has to do with the nature of reporting cycles. As a reporter said to me once “the only way to get a story in on time, when it will have the most impact, is to get it wrong.” The more confusing the document, the greater the chance that things get missed on the first few passes.

Likewise, for as much work as I’ve put into this article, I’m sure that I’m going to miss a lot. Thankfully we have comments to serve as a catch all.

These three factors—not to mention the sensationalizing—have led to reporters, in my opinion, overemphasizing the conservative/Tea Party aspect of this scandal, and missing-or at the very least, underreporting—other, equally important parts.

So what have reports missed, or under-reported?

Again, there are some big points that I think have been lost in much of the reporting. One, as stated above, is how badly all “flagged applications” were treated. Once you were in the specialist cue, politics didn’t matter. Chances are you were going to be waiting and asked some very prying questions.

[Updated 5/28] This points to a critical point, our nation’s tax enforcement institution has been charged with deciding what does and what does not constitute political activities. I think this, in particular, should stop and give us pause. Why is a financial collections institution being put in the place of being the primary reviewed of political action? Especially given that we have an entirely different government agency–The Federal Elections Commission–which oversees elections and political parties?

Of equal importance is that the Audit makes it abundantly clear that few people within in the IRS understand, let alone can articulate, what constitutes Significant Political Campaign Intervention in regards to 501(c)4’s. The report contains numerous references to this issue. Also, the auditors repeatedly recommend that the EO draft and publish clear and easily articulable guidelines on this topic. It’s telling that these are the only two recommendations that the IRS pushes back on (Recommendation 2—11/PDF p17—and Recommendation 5— 16/PDF p22). In both cases, TIGTA’s responses to the EO’s response convey a strong sense of exasperation at the EO’s continued denial of the scope of the problem.

On the topic of management, another thing that has been under-reported is—believe it or not—the total breakdown of management within the EO. I realize this seems like something that actually has been covered. But, so far, the only thing that’s been discussed is the finding of “insufficient managerial oversight” regarding how managers in Washington were seemingly unaware that Determinations Unit specialists were inventing their own criteria for reviewing cases (and later overturning management’s decisions without letting anyone know).

What most reports have missed is that the EO’s problems go far beyond the Determinations Unit. For example, the Technical Unit—another EO division, separate from the Determinations Unit—took more than 20 months to draw up draft procedures for the processing the 501(c)4 reviews (12, PDF p18). The net result of the delay was that Determinations Specialists simply stopped processing applications that had been forwarded to them for additional review for 13 months until they had a process to work with. The audit tells us that senior management wasn’t aware of the long delay in draft procedures (12-4, PDF p18-20). Nor was senior management aware that the specialists had decided to stop review work until the draft procedures were complete. (IBID)

As many commentors have pointed out here, and in other places, these managerial problems alone serve as justification for the recent decision to suspend, and most likely fire, Lois Lerner.

On Specialists and the Review Statistics

Turning to the specialists, the audit indicates that initial reviewers actually did a pretty good job of identifying signs of potential political intervention. Auditors found that only 2% of initially approved applications—an estimated 44 out of over 2000—should have been sent to specialists for further review. Of course, one can argue that this success rate was accomplished by flagging far too many applications for specialist review.

However, the facts don’t necessarily bear that out.

There were two reasons why an application was flagged: (1) Potential Political Campaign Intervention and (2) an incomplete applications. On the second one, the Auditors never give any indication that applications were incorrectly flagged as incomplete or needing additional information. As to the more contentious issue, after reviewing almost all of the 298 flagged applications, 69% of them—205—contained signs of “significant political campaign intervention.” (10/ PDF p16) Again, those 298 applications were the ones that all were significantly delayed and asked some unnecessary questions.

Let me note that even though a group that was “correctly” flagged for review, there’s no reason that it should not still end up with 501(c)4 status. For example, the phrasing of the application could make the group appear more directly political than it actually is. [Major Update 6/5: After reading a piece by Martin A. Sullivan at Tax Analysists, I reviewed my notes an realized that I misinterpreted the data. The audit reveals that of the 91 applications flagged BOLO list only 17 did NOT include evidence of significant campaign intervention. So rather than having an 18% success rate, the BOLO list had an 82% success rate. That means it had a *higher* success rate than the standard review’s 69%.]  However, its important to note that success rate significantly drops when one looks at the applications flagged using “names” as the key BOLO criteria. Among the targeted conservative groups with BOLO list names, auditors found only 18% —17 of 91— of the applications proved to be correctly flagged. (ibid, see footnote 28)

We cannot say for certain whether the use of names as a BOLO flag was intentionally, politically motivated. The specialists who developed it claimed the BOLO names list functioned as a shorthand for identifying applications that they felt most likely to contain potential political activity. However, it’s abundantly clear that it was an ineffective method of identifying problem applications. Unfortunately, TIGTA only evaluated the effectiveness of the use of names. We have no data on whether-or-not flagging policy statements was any more, or less, effective.

Likewise, the specialists didn’t do so well when it came to requesting follow-up information—though its not as abysmally as some reports would lead you to believe. The audit found that 58% of information requests were found to have sought data that was later deemed to be unnecessary. However, contra some analysis, the report clearly did not say that those 58%—98 organizations in all—should not have received any follow-up questioning. After an internal review of information requests, the EO sent revised information requests to a number of those groups. (20, PDF p26) One has to wonder how many of those unnecessary questions were asked because the specialist was confused about the 501(c)4 criteria.

Some final thoughts (for now)

This article only scratches the surface of the content of the audit. And I suspect much more is going to come out in the comments thread. There is one other revelation that I—as someone who studies journalism—found particularly interesting. I was struck by the role that the media (news and, by association, conservative media) played in helping initiate actions that helped both end and begin this scandal.

As mentioned about, it was a combination of media reports and congressional requests that sparked the audit in the first place. We also learn from the time-line and Section 1, that media reporting in 2010 is what helped initiate the current situation. Reading around redactions, we discover that stories about the potential abuse of the 501(c)4 structure by political groups caused mangers within the EO to call for more thorough reviews of 501(c)4 applications (11/ PDF p5).

We also learn that news reports in February of 2012 (19/ PDF p13) about processing delays and requests for intrusive questions led to an executive order stopping new requests for information and to providing unlimited extensions to those who had already received requests. Perhaps this is the most damning thing that can be said about EO management problems–and again why Lerner had to go–Administrators apparently learned about what their divisions were doing from media, rather than internal, reports.

FILED UNDER: Bureaucracy, Taxes
Matt Bernius
About Matt Bernius
Matthew studied Cultural Anthropology at Cornell University, researching the intersection of technology and culture. Prior to Cornell, he earned a Masters in the Social Sciences from the University of Chicago and was a visiting professor at the Rochester Institute of Technology. He started writing at OTB in May 2013. Follow him on twitter @mattbernius.

Comments

  1. Dave Schuler says:

    Thank you very much for all of your effort, Matt. Like your last post this is very useful.

    Does the audit suggest that the “go slow” handling was policy or just a fact? It’s now a reasonable inference that using specific code words in the names of organizations was a policy although we have yet to determine whether it was a policy that was arrived at properly. My suspicion is that the code word policy was not arrived at properly–managerial incompetence.

  2. Davebo says:

    Outstanding work Matt.

    This post represents the concept of quality over quantity that sadly IMO OTB has been lacking.

    The point that it was media rather than management that targeted the issue is right on and a bit ironic given the recent revelations regarding the DOJ and media outlets.

  3. Can’t wait to see your evidence that abortion rights groups were asked to provide documentation of their prayers as a condition precedent of receiving non-profit status.

    It is way too easy to read way too much into the organization of a report. You are missing the forest for the trees. It is wrong to infer that left leaning political types were delayed by nefarious questions because their applications were actually approved

    USA Today’s review of IRS data showed that in the time that the IRS put a hold on all tea-party applications for nonprofit status, groups with liberal-sounding names were approved in as little as nine months. Applications from conservative groups, meanwhile, sat in limbo.

  4. Matt Bernius says:

    Hi all, as with the last thread I’ll do my best to respond to every comment. If I don’t, it’s usually either (a) I need a bit more time to think about a response or (b) I don’t think I have anything to add.

  5. Matt Bernius says:

    @Davebo:

    This post represents the concept of quality over quantity that sadly IMO OTB has been lacking.

    This isn’t exactly a fair statement. I did pitch these pieces to James as long form content — so I’ve been writing these more as articles than what I’d consider to be a blog post.

    And honestly, James has been extremely patient as it’s taken me far longer than expected to finish them. In part that’s because of some personal issues. But a lot of it’s due to how long it’s taken me to start to break apart some of these issues.

    Like I said, reporters often have to get it wrong to tell the story.

  6. Matt Bernius says:

    @Dave Schuler:

    Does the audit suggest that the “go slow” handling was policy or just a fact? It’s now a reasonable inference that using specific code words in the names of organizations was a policy although we have yet to determine whether it was a policy that was arrived at properly. My suspicion is that the code word policy was not arrived at properly–managerial incompetence.

    Once you’re application was flagged for review or for additional information, you went into a black hole. And this wasn’t specifically due to policy, but to staffing and procedural issues.

    Pages 13-4 (PDF page 19-20) contains a lot of scary info on this. Here’s the direct quote on what caused part of the delay (waiting 20! months for *draft* procedures for dealing with potentially political cases):

    In April 2010, the Determinations Unit Program Manager requested via e-mail a contact in the Technical Unit to provide assistance with processing the applications. A Technical Unit specialist was assigned this task and began working with the team of specialists. The team of specialists stopped processing cases in October 2010 without closing any of the 40 cases that were begun. However, the Determinations Unit Program Manager thought the cases were being processed. […] Draft written guidance was not received from the Technical Unit until November 2011, 13 months after the Determinations Unit stopped processing the cases. As of the end of our audit work in February 2013, the guidance had not been finalized because the EO function decided to provide training instead

  7. Matt Bernius says:

    @Let’s Be Free:
    I will respond to both points — I just don’t have enough time to do so at the moment.

  8. Davebo says:

    @Matt Bernius:

    Matt, It wasn’t James I was referring to. But still I come here so it couldn’t be that bad right?

    Again, great post.

  9. steve says:

    I think we really need to know more about that other 2/3 of groups that were also flagged. What kinds of organizations were they? Did the other BOLO lists name liberal organizations?

    So far, you have data and auditing of reports, questions asked and time to process. Did the authors of the report actually talk with the people who made up the BOLO list? I see lots of conjecture but nothing from someone who says “I sat down and talked with 20 people who worked at the Determinations Unit and this is what they told me”. Very disappointing.

    Steve

  10. Andy says:

    This is a good article which identifies a lot of issues with this report. I’d like to clarify one thing though:

    That means, for example, while we know that 1/3 of the applications flagged as “Potentially Political” contained terms from the BOLO list—and are therefore assumed to be from Conservative groups—we have no idea about the contents or political alignment of the remaining 2/3rds of the flagged applications.

    The 1/3 portion of flagged applications were those that contained 3 specific terms on the BOLO list: “tea party,” “patriots,” or “9/12”, not applications that “contained terms from the BOLO list.” You’re right we don’t know about the remaining 2/3rds of the applications.

    Because the section of the audit involving the BOLO list was restricted to the treatment of Conservative groups, the audit doesn’t provide additional information about whether or not this is the case.

    Actually, the audit is fairly clear on that, though the criteria changed over time. For the first year (mid-2010 to mid-2011) the BOLO list was clearly targeted at tea party groups:

    In August 2010, the Determinations Unit distributed the first formal BOLO listing. The criteria in the BOLO listing were Tea Party organizations applying for I.R.C. § 501(c)(3) or I.R.C. § 501(c)(4) status.

    then

    Figure 3 shows that, by June 2011, the expanded criteria included additional names (Patriots and 9/12 Project) as well as policy positions espoused by organizations in their applications.

    Figure 3 lists the criteria that were added:

    Issues include government spending, government debt or taxes

    Education of the public by advocacy/lobbying to “make America a better place to live”

    Statement in the case file criticize how the country is being run

    Now, it is possible that non-conservative groups were added to this list, but it seems unlikely since the cases on the list were referred to as “tea party cases.” See also the June 29, 2011 briefing in the timeline on page 35.

    The following month the BOLO criteria was changed to neutral criteria (and later was changed again without authorization from management back to inappropriate criteria before finally being fixed in 2012.)

    So BOLO targeting of tea party groups was around for about a year and 100 applications were identified. If you go back and look at the 1/3 chart, those at up to 100 applications – so the conclusion is that the BOLO list only targeted tea party groups.

  11. rudderpedals says:

    @Andy: I could swear I remember reading in the IG report that the analysis specifically looked only at tea partyish applicants and didn’t analyze the other applicants. If I’m remembering right I don’t think it’s fair to conclude anything about the other 2/3 other than they didn’t trigger a tea party stigmata related review.

  12. anjin-san says:

    Going off topic – this is worth a look:

    Is Wall Street literally writing America’s laws now?

    A bill called the Swaps Regulatory Improvement Act recently sailed through the House Financial Services Committee. But when The New York Times went through emails from a lobbyist to the congressmen who wrote it, the paper discovered an unofficial co-author: Citigroup.

    It turns out that recommendations from Citigroup made up 70 of the bill’s 85 lines, with two important paragraphs copied almost verbatim — save for two words that were changed to make them plural, according to the Times.

    http://theweek.com/article/index/244716/is-wall-street-literally-writing-americas-laws-now

  13. Andy says:

    @rudderpedals: I agree, we don’t know what’s in the other 2/3rds. What I’m sayin is the BOLO list was a tea party list.

  14. rudderpedals says:

    @Andy: Agreed. At some point before we’re all dead it’d be nice to know if the reasoning was any better for the other 67% delayed by triggering a keyword screen.

  15. Matt Bernius says:

    Thanks again to everyone for contributing feedback. Not to sound like an tech support phone line, but I’ll try and respond in the order things came in.

    @Andy: Thank you so much for this @response, including the quotes. Its entirely possible I misread that stuff–oh physician, heal thyself! I’ll definitely reread and respond, but that’s going to take some time.

  16. Matt Bernius says:

    @Davebo:

    Matt, It wasn’t James I was referring to. But still I come here so it couldn’t be that bad right?

    I realize that, and I didn’t think you were referring to James. I didn’t make my point well…

    What I was trying to say is that these in-depth posts take time. I had originally hoped this article would be done and posted last Saturday. I’m just saying that, to keep a site like OTB going — with a crew of unpaid contributors — there needs to be a mix of shorter blog posts and these longer analytical articles.

    I also understand your larger point.

  17. Dave Schuler says:

    Thanks, Matt.

  18. Matt Bernius says:

    @Let’s Be Free:
    For simpicity’s sake I’m responding to your questions in two different comments.

    Point 1:

    Can’t wait to see your evidence that abortion rights groups were asked to provide documentation of their prayers as a condition precedent of receiving non-profit status.

    I had actually answer this question in the comments of a different post. The group that received that request was the Thomas Moore Society the Coalition for Life of Iowa. In response to their 501(c)3 application, the group was asked to do the following:

    Please explain how all of your activities, including the prayer meetings held outside of Planned Parenthood, are considered educational as defined under 501(c)(3). Organizations exempt under 501(c)(3) may present opinions with scientific or medical facts. Please explain in detail the activities at these prayer meetings. Also, please provide the percentage of time your organizations spends on prayer groups as compared with the other activities of the organization.
    [Source]

    So the question was more broad than simply asking about the content of prayers.

    However, you asked for a defense, here it is — As I noted elsewhere, 501(c)3 status is the among the most restrictive of the Non-Profit Status when it comes to politicking. Essentially a 501(c)3 — which includes Churches — can do no direct political work or lobbying.

    So, sticking simply with the content of prayers, one issue is that if a group is praying for a political outcome — like the election of Anti-abortion candidates — they are most likely engaging in direct politicking and violating their 501(c)3 status. So, from this perspective, the question is a valid one.

    But what’s also lost in the “outrage” that the IRS dared to ask this question, is the complete story. As David Weigel points out, The Thomas Moore Society Coalition for Life of Iowa supplied the supplemental information and WAS AWARDED 501(c)3 STATUS.

    In other words, the system worked. Now we can ask did it work in a timely fashion. That’s a different question.

    But the fact is that it’s hard to think of a topic that is more intermingled in American Politics than abortion. So while the IRS determinations specialist might not have artfully worded the letter, I think this was a pretty appropriate case.

    If you have an argument for why it was inappropriate, feel free to make it.

  19. Matt Bernius says:

    @steve:

    I think we really need to know more about that other 2/3 of groups that were also flagged. What kinds of organizations were they? Did the other BOLO lists name liberal organizations?

    Completely agree with this point. Without that knowledge, it’s hard to judge the full situation.

    Did the authors of the report actually talk with the people who made up the BOLO list?

    According to my reading of the report, they did. In fact, I’m pretty sure it’s specifically discussed in Section 1 (I don’t have time to find a specific reference) and in the timeline. This excerpt from the timeline (31/ pdf p37 — emphasis mine) contains the Determination Specialists defense of the BOLO list:

    Determinations Unit personnel indicated that they used the description Tea Party as a shorthand way of referring to the group of cases involving political campaign intervention rather than to target any particular group. The specialist used Tea Party, Patriots, and 9/12 as part of the criteria for these searches.

    Further we know that specialists were interviewed because the specialists admitted not being entirely sure of the criteria for deciding was was too much political activity for a 501(c)4.

  20. rudderpedals says:

    Matt, re the ********1****** recurring through the report, do you know what’s behind the redaction?

  21. Matt Bernius says:

    @rudderpedals:
    No idea. That’s #3 on my list of critical missing info, behind:
    #1 – Complete breakdown of BOLO lists used during this time
    and
    #2 – Complete breakdown of the 298 applications that were flagged for Specialist Review due to potential political issues.

  22. rudderpedals says:

    @Matt Bernius:
    The cynic in me says it’s redacting a reference to Issa’s committee and the receipt of a letter requesting the investigation. The non cynic says it might be that or just irrelevant identifying info about a particular whistleblower or taxpayer. The commenter in me says the answer is a don’t-care immaterial loose end not worthy of priority but it nags anyway.

    Excellent article. Look forward to the next installment

  23. Matt Bernius says:

    @Let’s Be Free:
    Finally getting around to your final comment:

    You are missing the forest for the trees. It is wrong to infer that left leaning political types were delayed by nefarious questions because their applications were actually approved

    USA Today’s review of IRS data showed that in the time that the IRS put a hold on all tea-party applications for nonprofit status, groups with liberal-sounding names were approved in as little as nine months. Applications from conservative groups, meanwhile, sat in limbo

    First of all, here’s the USA Today source article:
    http://www.usatoday.com/story/news/politics/2013/05/14/irs-tea-party-progressive-groups/2158831/

    Second is that this report provides no new information other than to confirm that the term “Progressive” wasn’t on the BOLO List. Beyond that all we know is that the liberal groups where were listed were not passed on for Specialist review.

    What we also know is that, generally speaking, every application passed on for Specialist review was treated in the same crappy fashion.

    At this point, I had no reason NOT to believe that if the progressive applications had been forward for the secondary specialist review, that they would have received different treatment either. Again, this get’s back to the fact that we are talking about two different problems:

    Prob 1. – That Tea Party applications were inappropriately, and ineffectively, targeted by *name* for specialist review.

    Prob 2. – That all applications in the specialist review cue were treated in the same crappy manner.

    What you are asserting, without any strong basis, seems to be that the majority, if not all, of the applications in the specialist review cue were for conservative organizations. There simply is currently no proof for that.

    Again, we know for a fact ~1/3 were. What we don’t know is the contents of the remaining 2/3rds. Chances are that Tea Party/Conservative apps made up more than just that 1/3rd, but any claim beyond that is currently baseless speculation.

    It would be nice, at some point in the future, for the IRS to release a redacted listing of all ~290 applications. But, I’m not holding my breath on that one.

  24. Matt Bernius says:

    @Andy:
    Sorry it’s taken me so long to get back to your comments. First, thanks for the correction/refinement. What you wrote about the 1/3rds of the list was what I intended to write. I’ve altered the text of the article to reflect your correction.

    Onto the question of what comprised the BOLO list. Based on my re-read of the key sections of the Audit, in particular page 6/PDF p12, I see your point, but do not completely agree with it. Here”s the passage you’re quoting, with the addition of a sentence you skipped AND the relevant footnote:

    In August 2010, the Determinations Unit distributed the first formal BOLO listing. The criteria in the BOLO listing were Tea Party organizations applying for I.R.C. § 501(c)(3) or I.R.C. § 501(c)(4) status. Based on our review of other BOLO listing criteria, the use of organization names on the BOLO listing is not unique to potential political cases.(Footnote16) EO function officials stated that Determinations Unit specialists interpreted the general criteria in the BOLO listing and developed expanded criteria for identifying potential political cases.(Footnote 17) Figure 3 shows that, by June 2011, the expanded criteria included additional names (Patriots and 9/12 Project) as well as policy positions espoused by organizations in their applications.

    Figure 3: Criteria for Potential Political Cases (June 2011)
    — “Tea Party,” “Patriots” or “9/12 Project” is referenced in the case file
    — Issues include government spending, government debt or taxes
    — Education of the public by advocacy/lobbying to “make America a better place to live”
    — Statement in the case file criticize how the country is being run
    Source: EO function briefing dated June 2011.


    16 – We did not review the use of other named organizations on the BOLO listing to determine if their use was appropriate. [Emphasis Mine]
    17 During interviews with Determinations Unit specialists and managers, we could not specifically determine who had been involved in creating the criteria. EO function officials later clarified that the expanded criteria were a compilation of various Determinations Unit specialists’ responses on how they were identifying Tea Party cases.

    The sentence “Based on our review of other BOLO listing criteria, the use of organization names on the BOLO listing is not unique to potential political cases.” establishes that there were other BOLO lists in use. And footnote 16 above definitely indicates that there was more on the BOLO list than just those terms.

    So to be more accurate, there are two questions that should be asked:
    #1. When was the “potential political activities” BOLO list created?
    #2. What was the evolution of that list?

    I agree that the text of the audit suggests that the list was created at the time where there was internal concern about how to track tea party applications.

    On this point, you wrote:

    Now, it is possible that non-conservative groups were added to this list, but it seems unlikely since the cases on the list were referred to as “tea party cases.” See also the June 29, 2011 briefing in the timeline on page 35.

    I think this is a misreading of the audit. The audit clearly indicates that there was internal concern within the IRS on how to track and process “tea party cases” (this specific phrase appears throughout the audit). And clearly there was a section of the BOLO list dedicated to “tea party cases.” The issue, again, is whether or not that constituted the entire “potential political cases” section of the BOLO list.

    My reading of the audit is that it doesn’t provide enough information to make that assumption. I can understand why you would reach a different view.

    But the only way to be sure of this would be for the “Potential Political Cases” BOLO list to be released.