“We are examining the facts to see if there were criminal violations,” Holder said at a news conference.
Also Tuesday, a widely anticipated report by the IRS’s watchdog described the agency’s tax-exempt unit — where the screening of conservative groups occurred — as a bureaucratic mess, with some employees ignorant about tax laws, defiant of their supervisors and blind to the appearance of impropriety.
The report by the Treasury Inspector General for Tax Administration described in detail the use of “inappropriate criteria” to screen political advocacy groups. An IRS unit created a “lookout” list for organizations with keywords such as “tea party” or “patriot” in their names. Organizations faced months of delays in getting their applications approved.
President Obama in a statement on Tuesday called the report’s findings “intolerable and inexcusable,” adding that he has directed Treasury Secretary Jack Lew “to hold those responsible for these failures accountable, and to make sure that each of the Inspector General’s recommendations are implemented quickly, so that such conduct never happens again.”
IRS officials told the inspector general that they had used the keywords as shorthand to efficiently manage a deluge of new political advocacy groups, but that explanation was rejected by the inspector general’s office.
“Developing and using criteria that focuses on organization names and policy positions instead of the activities . . . does not promote public confidence that tax-exempt laws are being adhered to impartially,” said the report, which Inspector General J. Russell George issued.
The report did not find evidence that the actions were motivated by partisan interests. IRS officials told investigators they did not consult anyone outside the agency about the screening.
The watchdog report is likely to stoke growing outrage over the agency’s actions. No IRS employees involved in the decisions have been disciplined, and one has been promoted, said House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), whose panel prompted the audit.
“We still do not know why the targeting began, how extensive it was, who initiated it and who knew about it,” said Rep. Jim Jordan (R-Ohio), a member of the oversight committee. “The IRS must be held accountable to the American people, which requires a full investigation.”
In a written response attached to the watchdog report, Joseph Grant, acting commissioner of tax-exempt and government entities at the IRS, conceded that “some errors occurred” but pledged that “significant improvements in this area are in place and we are confident that what transpired here will not recur.”