The Trump administration agreed Thursday to pay $3.5 million to tea party groups snared by IRS targeting during the Obama administration, saying the intrusive scrutiny was illegal and cannot be allowed to happen again.
The government also reversed its tune on former IRS senior executive Lois G. Lerner. Instead of being a hero who tried to stop the targeting — as the Obama administration concluded in 2015 — the Justice Department and IRS now say she failed to stop her employees and hid the bad behavior from her bosses for two years.
Attorney General Jeff Sessions, who announced the settlements, offered an apology to more than 450 groups that were part of two lawsuits against the IRS.
As part of the agreements, the government admitted that the IRS forced tea party groups into illegal delays and unconscionable scrutiny, including questions about their political beliefs, plans to run for office and names of financial backers.
“There is no excuse for this conduct,” Mr. Sessions said in a statement announcing the settlements. “Hundreds of organizations were affected by these actions, and they deserve an apology from the IRS.”
The IRS did not reply to requests for comment from The Washington Times about whether it would add its own voice to that apology. The IRS also didn’t respond to questions about the reversal on Ms. Lerner, who was allowed to retire rather than be fired in the wake of the targeting scandal.
IRS Commissioner John Koskinen, who took over in the wake of the scandal and ran into trouble of his own after he misled Congress about the destruction of Ms. Lerner’s emails, is due to leave the agency early next month.
President Trump on Thursday announced Assistant Treasury Secretary David Kautter as acting commissioner during the search for a permanent commissioner.
The settlements and Mr. Koskinen’s departure help bring to a close a rough period for the IRS that started in 2013 when Ms. Lerner — trying to put the agency’s spin on the emerging tea party scandal ahead of a devastating audit — planted a question at a tax law conference so she could explain the issue.
By the time the dust settled, more than 450 groups had been identified as snared by the targeting. Some were liberal, but the vast majority were conservative-leaning organizations that had applied for nonprofit status under the 501(c) section of the tax code.
Those groups sued in federal courts in the District of Columbia and in Ohio, where a class-action lawsuit had raged since 2013.
Mark Meckler, a tea party leader who helped fund the class-action lawsuit, said he doesn’t expect an IRS apology anytime soon but saw the settlement payment as part of an admission of problems.
“The then-Director of the [exempt organizations] Division, Lois Lerner, first became aware that the IRS received applications from Tea Party groups as early as April or May 2010. For the next two years, Lerner failed to adequately manage the EO Division employees who processed these applications,” the consent agreement says.
Neither Ms. Lerner nor her attorney returned requests for comment.
“A true reckoning is finally up to the agency itself. Until the IRS itself steps forward to admit what really happened, we cannot have faith that the same abuse won’t be repeated again,” said Edward Greim, the lawyer who handled the class-action lawsuit for NorCal Tea Party Patriots and more than 400 other groups.
Some matters are still outstanding.
True the Vote, a tea party organization that sued in the District of Columbia, says its case is still pending. The group says it wants a judge to enter an injunction making sure the IRS can’t repeat the targeting.
During the Ohio case, Mr. Greim and his team managed to depose Ms. Lerner. Those transcripts remain sealed along with records of the deposition of another employee, Holly Paz. The two women have told a judge that they fear for their safety if their testimony is released.
On Wednesday, the Cincinnati Enquirer asked the court to make those records public, as well as unredacted court documents that refer to the testimony.
Tom Zawistowski, head of the Portage County Tea Party in Ohio, said Ms. Lerner should have faced criminal charges for her role, which court documents filed earlier in the case show involved her trying to shield the activity by changing names but overall approving and in fact intensifying the scrutiny the conservative groups were given.
He said he still wants the Justice Department to appoint a special counsel to pursue the case and get to the bottom of the motive behind the targeting.
Despite initial claims by some Republicans, no evidence has ever traced the targeting back to President Obama or his top political aides.
But emails released this year show the IRS was made aware by its own agents that it was singling out groups based on their politics, not on questions about their tax behavior.
“These cases are held back primarily because of their political party affiliation rather than specifically any political activities,” Elizabeth C. Kastenberg, an official in the agency’s exempt organizations division, wrote in an April 1, 2011, email to other IRS employees, including her supervisor.
That contradicts the long-stated position of the IRS that Ms. Lerner and others involved in the targeting were worried in the wake of a 2010 Supreme Court decision about a surge of groups going beyond the usual rules of politics.