By ALAN FRAMAssociated Press
WASHINGTON (AP) - The head of the Internal Revenue Service testifies to Congress this week after IRS documents showed that progressive and other groups seeking tax-exempt status were listed along with conservative organizations as meriting close examination by agency screeners.
With IRS chief Danny Werfel preparing to answer questions Thursday from the House Ways and Means Committee, here's where things stand with his beleaguered agency:
Q: Do the latest revelations mean the IRS subjected progressive groups pursuing tax-exempt designations to the same tough treatment that tea party organizations received?
A: In interviews, leaders of some liberal and other groups - such as advocates of the medical use of marijuana - say they faced detailed questions and long delays. So far it remains unclear whether the extent of the problems they faced was as widespread as the ones that dozens of conservative groups confronted. Werfel is likely to get questions on that from lawmakers, especially Democrats.
Q: Why were groups' applications examined so closely?
A: The IRS must determine who qualifies for tax-exempt status. One designation sought by many organizations - called 501(c)(4) for its tax code section - lets groups help candidates' election campaigns if it isn't their primary activity.
Thanks to vague laws and regulations, that means the IRS must painstakingly study the activities of all politically active groups that apply for that designation. What was different about this episode is that conservative groups - and apparently others too - were given close scrutiny because of their names or statements on their applications or websites.
Q: Did President Barack Obama or any top White House, administration or Obama campaign official start or direct the IRS targeting of conservatives?
A: Several Republicans have suggested the operation was directed by Obama allies and was purposely aimed at his conservative adversaries. There is no evidence yet that anyone from the Obama administration or his political organization was involved in the targeting of conservatives.
Q: Then who started it and why?
A: According to Treasury Department Inspector General J. Russell George and testimony to congressional committees, the screening started with a handful of IRS workers in the Cincinnati office who process around 5,000 applications for tax-exempt status every month.
In early 2010, one worker passed an application from a tea party organization to his boss because he thought their tax treatment could attract news media attention. The boss forwarded it to his superiors, including the IRS exempt organizations office in Washington, which oversaw the Cincinnati screeners and expressed interest.
After that, the boss back in Cincinnati - who told congressional investigators that the IRS wants to treat high-profile cases consistently - had his screeners look for similar applications. Eventually they and others set aside dozens of such cases.
Q: What did the IRS do with the conservative groups' applications that were set aside?
A: About 40 were shared with an IRS attorney in Washington, who provided technical advice.
That ended up causing a 13-month period - from October 2010 to November 2011 - during which no real work was done on tea party applications. According to testimony to Congress and George's report in May, Cincinnati IRS workers thought their Washington bosses were working on guidelines but Washington thought work in Cincinnati was proceeding. There is no evidence yet that Washington's involvement had any other impact on the cases.
Q: Where did the lists come from?
A: According to George, in May 2010 IRS officials began compiling spreadsheets listing characteristics that screeners were supposed to seek. That list contained the term "tea party" by August 2010 but kept evolving.
George has reported that by June 2011, the list also included "patriots" and "9/12," plus mentions of making America better and criticism of how the country was being run. He has said that after several changes, by May 2012 the spreadsheet was revised to shift its focus away from applicants' policy views and instead toward activities permitted by Treasury regulations.
Democrats from the House Ways and Means panel released 15 of the lists this week. They showed that various points the lists included terms like "Progressives" and "Healthcare legislation." As recently as April of this year they contained "Paying National Debt" and "Green Energy Organizations." Werfel, who was given his job in May by Obama, said this week that he ordered use of the lists completely halted earlier this month.
Q: How many groups were affected?
A: George's report singled out 298 organizations for close study because of potential political activity. Of those, 96 had "tea party," ''patriots" or "9/12" in their names. There is no precise breakdown of the political views of the remaining 202 groups, but they included groups from the right, left and center.
Despite the careful scrutiny they received, George found that as of December 2012 none of the 298 political cases' applications had been denied. Most remained undecided or were approved.
Q: What tough treatment did the groups receive?
A: Most tea party groups waited at least a year for decisions on their applications, with some waiting more than three years. In addition, the IRS sent lengthy questionnaires to many that included queries about their donors and plans, if any, by group leaders to seek public office.
Q: Who wrote these questionnaires?
A: That's unclear, as is why the delays in processing applications persisted so long. Also blurry is why top IRS officials who said they learned about the targeting in spring 2012 didn't tell Congress, even though lawmakers had asked them about it repeatedly because of complaints from tea party constituents.
Q: What's next?
A: Besides Ways and Means, the Senate Finance and House Oversight and Government Reform committees and the Justice Department are pursuing investigations likely to take months.
Associated Press writer Stephen Ohlemacher contributed to this report.
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