2013 IRS targeting controversy

2013 IRS targeting controversy
Title	2013 IRS targeting controversy
Date	2013
Place	United States
Participants	Internal Revenue Service; Tea Party groups; Democratic National Committee; Republican Party; United States Congress; United States Department of Justice
Outcome	Multiple investigations; congressional hearings; policy changes at the Internal Revenue Service; settlements and exemptions for certain organizations

2013 IRS targeting controversy The 2013 IRS targeting controversy involved allegations that the Internal Revenue Service selectively scrutinized applications for tax‑exempt status, particularly those filed by conservative Tea Party movement organizations and groups associated with Republican Party advocacy, leading to congressional hearings, Department of Justice inquiries, and internal reforms at the IRS. The issue implicated leaders such as John Koskinen and agencies including the United States Department of the Treasury, while drawing responses from lawmakers like John Boehner, Nancy Pelosi, and investigators from the Senate Finance Committee and the House Ways and Means Committee.

Background

In early 2013 reports surfaced that the Internal Revenue Service's Cincinnati office used criteria targeting applications referencing terms like "Tea Party" and "patriot" when processing 501(c)(4) and 501(c)(3) exemptions, prompting scrutiny from the House Committee on Oversight and Government Reform, the Senate Finance Committee, and the Treasury Inspector General for Tax Administration. The controversy followed earlier political disputes involving the 2012 United States presidential election and activities by groups such as Crossroads GPS and Americans for Prosperity, and intersected with legal doctrines under the Internal Revenue Code and precedents from cases like Citizens United v. Federal Election Commission.

Allegations and Internal IRS Actions

Allegations alleged that IRS employees in Cincinnati applied heightened review standards to groups with conservative labels and certain 501(c)(4) organizations and that screening criteria included mentions of policy issues such as health care reform and the Affordable Care Act. Internal IRS communications referenced lists and spreadsheet markers; IRS officials including former Commissioner Douglas Shulman and later Commissioner John Koskinen addressed the matter as investigations mounted. The IRS's internal response involved supervisory reviews, the reassignment of staff in the Cincinnati IRS office, and reports to the Treasury Department and the Office of Management and Budget about procedural lapses.

Investigations and Legal Proceedings

Multiple inquiries were launched: the Treasury Inspector General for Tax Administration issued reports; the Department of Justice opened an investigation; the Federal Bureau of Investigation provided assistance; and congressional committees issued subpoenas to IRS officials and employees. Civil litigation included lawsuits from organizations such as True the Vote, Tea Party Patriots, and other nonprofit organization plaintiffs alleging First Amendment violations and improper denial or delay of tax‑exempt status. Courts addressed claims under the Administrative Procedure Act and the Equal Protection Clause, while settlements and rulings varied across jurisdictions, including actions in federal district courts and appellate panels.

Congressional Response and Hearings

Congressional response involved bipartisan and partisan hearings before panels including the House Committee on Oversight and Government Reform, the House Ways and Means Committee, and the Senate Committee on Finance, with witnesses such as former IRS executives, whistleblowers, and advocacy group leaders. Prominent members such as Darrell Issa, Jason Chaffetz, Maxine Waters, and Patty Murray questioned testimony from IRS officials about document retention, missing emails, and internal guidance. Lawmakers pursued contempt citations, demanded production of communications from technology firms like Microsoft and subpoenaed employees involved in email handling, leading to legislative proposals referencing the Federal Records Act and oversight mechanisms in appropriations bills.

Reforms and Policy Changes

In response to criticism, the IRS instituted procedural reforms including revised guidance for reviewing tax‑exempt status applications, centralized processing changes, new training for employees, and updated information technology controls to ensure document preservation under the Presidential Records Act and federal records statutes. Leadership changes included the appointment of interim and permanent commissioners and the implementation of Inspector General recommendations from the Treasury Inspector General for Tax Administration report. Congress considered statutory amendments affecting Internal Revenue Code sections governing political activity and disclosure for social welfare organizations and debated changes to 501(c)(4) transparency requirements.

Public Reaction and Political Impact

The controversy galvanized activists and political organizations across the spectrum, fueling narratives from the Republican National Committee and conservative media outlets such as Fox News while also prompting responses from the Democratic National Committee and progressive organizations like MoveOn.org and Center for American Progress. Public opinion shifted in partisan polling conducted by organizations such as Pew Research Center and Gallup, influencing debates during the 2014 midterm elections and contributing to broader discussions about regulatory authority, civil liberties, and congressional oversight. The episode affected perceptions of bureaucratic accountability and was cited in subsequent legislative battles over tax policy and nonprofit regulation.

Category:Internal Revenue Service controversies