This just out: The Treasury Department's Inspector General report argues that the IRS developed “inappropriate criteria” in focusing on conservative groups. Here are the key findings:
The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention. Ineffective management: 1) allowed inappropriate criteria to be developed and stay in place for more than 18 months, 2) resulted in substantial delays in processing certain applications, and 3) allowed unnecessary information requests to be issued.
And here's the full report:
My colleagues Juliet Eilperin and Zachary Goldfarb have a write-up of the report as well.