Watchdog report finds IRS knew of Tea Party targets in 2011

WASHINGTON (Reuters) - A report from the watchdog agency overseeing the Internal Revenue Services finds that a top IRS official knew that lower level agents gave extra scrutiny to conservative Tea Party groups as early as 2011, according to a congressional source with knowledge of the findings.

The Treasury Department's Inspector General For Tax Administration (TIGTA) is expected to issue the report next week, days after a top IRS official apologized for what she called inappropriate targeting, according to the source.

The TIGTA report, requested by Representative Darrell Issa, chairman of the House of Representatives' oversight and government reform panel, will confirm the IRS targeting conservative and other groups seeking tax-exempt status under 501(c) 4 of the tax laws.

Such organizations can collect money from anonymous donors and spend it on advertising. To stay tax-exempt, they cannot endorse a candidate or a political party.

Lois Lerner, the top official dealing with tax-exempt groups at the IRS, apologized on Friday for the incident, which she said was confined to an office in Ohio. Her apology sparked an uproar from Republicans demanding a probe.

The TIGTA report will say she knew of the incidents as early as 2011, according to the source.

The White House says it was not involved, which Lerner also said on Friday.

Although part of the executive branch, the IRS is considered an independent agency and officials try to stay out of politics.

The number of groups seeking 501(c)(4) status jumped after the U.S. Supreme Court's 2010 "Citizens United" decision lifting government limits on corporate spending in federal elections.

Such contributions became controversial during the 2012 election season, as groups favoring both major parties financed ad campaigns to try to influence the race between Obama, a Democrat, and Republican challenger Mitt Romney.

(Reporting by Kim Dixon; Editing by Eric Walsh)

Source: http://news.yahoo.com/watchdog-report-finds-irs-knew-tea-party-targets-215429688.html

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