IRS scrutiny triggered by more than just politics

Most applications questioned in 2012, for example, were not flagged because of liberal or conservative ideology.


In 2010, a tiny Palestinian-rights group called Minnesota Break the Bonds applied to the Internal Revenue Service for tax-exempt status. Two years and a lot of prodding later, the IRS sent the group's leaders a series of questions and requests almost identical to the ones it was sending to tea party groups at the time.

The controversy that erupted in May has focused on an ideological question: Were conservative groups singled out for special treatment based on their politics, or did the IRS equally target liberal groups? But a closer look at the IRS operation suggests the problem was that a process instructing reviewers to "be on the lookout" for selected terms was applied to any group that mentioned certain words in its application.

Organizations approached by The New York Times based on specific "lookout list" warnings, like advocates for people in "occupied territories" and "open source software developers," told similar stories of long waits, intrusive inquiries and bureaucratic hassles that pointed to no particular bias but rather to a process that became too rigid and too broad.

Sylvia Schwarz, a co-director of the Break the Bonds group, shrugged at the treatment meted out by the IRS. She was used to rough scrutiny in a country that tilts against the Palestinians, she said. But the same questions, asked of conservative organizations, led to the dismissals of top IRS officials, prompting criminal and congressional investigations, and eliciting charges that the White House had used the IRS to pursue its political opponents.

After two months of investigation by Congress and the IRS, the more complicated picture now emerging shows that many organizations other than conservative groups were singled out: "progressive" organizations, medical marijuana purveyors, organizations formed to carry out President Barack Obama's health care law, and "open source software developers" who create software tools for computer code writers and distribute them free.

According to the Treasury inspector general for tax administration, the IRS in 2012 received 73,319 applications for tax-exempt status, of which about 22,000 were not approved in the initial review process. The inspector general looked at just 296 applications flagged as potentially being from political groups.

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