Treasury IG denies allegations IRS audit was politically biased

Treasury Inspector General J. Russell George fought back Thursday against “inaccurate” media reports that suggested his bombshell IRS audit was biased.

His office told several media outlets on Tuesday that the audit focused solely on tea party groups at the request of House Republicans. In a letter to Rep. Sander M. Levin (D-MI), George denied that the audit improperly omitted information on the treatment of progressive and liberal groups.

He insisted that tea party groups were treated differently than other groups.

Between May 2010 and May 2012, the investigators found that 100 percent of tea party applications were referred for additional scrutiny as potential political cases, George said. In contrast, only 30 percent of groups having the words "progress" or "progressive" in their names were referred for additional scrutiny as potential political cases.

Of the 298 cases the IRS identified as potential political cases between May 2010 and May 2012, only six contained the words “progress” or “progressive.”

However, George also admitted that the treatment of progressive and liberal groups was not fully investigated because they were included on a section of so-called “Be On the Look Out” lists that was unrelated to political cases. The audit only focused on how the IRS treated potential political cases.

“TIGTA did not audit how the criteria for the ‘Progressives’ identifier were developed in the BOLO listings,” George said.

The BOLO listing categorized the tea party under the “Emerging Issue” section, which was used to identify potential political cases. The BOLO listing categorized progressives under the “TAG Historical” section. George said investigators did not find evidence that this latter section was used as selection criteria for potential political cases.

“The term ‘Progressives’ appears, beginning in August 2010, in a separate section of the BOLO listings that was labeled ‘TAG [Touch and Go] Historical’ or ‘Potential Abusive Historical,’” George explained. “The Touch and Go group within the Exempt Organizations function Determinations Unit is a different group of specialists than the team of specialists that was processing potential political cases related to the allegations we audited.”

According to the IRS manual, the Touch and Go group processes tax exempt applications that “may involve an abusive tax avoidance transaction, fraud, or terrorism.”

George and his office faced criticism from Democrats earlier this week for not mentioning that “progressive” appeared on the BOLO lists and were among the 298 organizations in the audit, even when directly questioned.

“The failure of the IG’s audit to acknowledge these facts is a fundamental flaw in the foundation of the investigation and the public’s perception of this issue,” Levin said Thursday. “I wrote to the IG and asked him to explain these omissions. And all Committee Democrats have asked today, Mr. Chairman, that you ask Mr. George to return to the Committee to provide the appropriate context for his report and answer questions under oath regarding all of these matters.”