The Targeting Affair, 2010–2018

This is the one page in these notes that has nothing to do with preparing a return. It is here because I was starting the Tax Shop while it happened, because clients still bring it up, and because the record is better than the memory of it. Everything below is from the inspector general, the Senate Finance Committee, the Justice Department or the court files, with the source on each entry; where I have an opinion it is marked as mine.

The short version

Beginning in early 2010, specialists in the IRS Exempt Organizations Determinations Unit in Cincinnati began setting aside applications for §501(c)(4) (and some §501(c)(3)) status from groups with “Tea Party,” “Patriots” or “9/12” in their names, and by August 2010 had written the names into a “Be On the Look Out” list. The flagged files were held for extra review that, by the inspector general’s count, left 160 of 298 applications still open in December 2012 after 206 to 1,138 days, with development letters asking for things the IRS had no business asking for, including donor lists. The director of Exempt Organizations, Lois Lerner, disclosed the practice on May 10, 2013 in a pre-arranged answer at an ABA meeting, four days ahead of the Treasury Inspector General’s report; the acting commissioner resigned within the week; Lerner invoked the Fifth before Congress, retired that fall, and was held in contempt the next spring. In June 2014 the IRS told Congress that her emails from 2009 to April 2011 had been lost in a 2011 hard-drive crash, and the inspector general later found that 422 backup tapes that might have held them were erased by IRS staff in March 2014, after a preservation order they said they never saw. The Justice Department closed its investigation in October 2015 finding “mismanagement, poor judgment and institutional inertia” but no crime; the Senate Finance Committee’s bipartisan report found management failure and split along party lines on motive; a 2017 inspector general report found that left-leaning names (“Progressive,” “Occupy,” “ACORN Successors”) had been on watch lists too, though with faster processing. In 2017 and 2018 the government settled the lawsuits, apologized in a consent order, and paid a reported $3.5 million to a class of 400-odd groups without admitting liability.

The timeline

2010

Early 2010

The EO Determinations Unit in Cincinnati begins pulling applications with “Tea Party,” “Patriots” or “9/12” in the name, and other “political-sounding” names, for extra review. In May a specialist and a group manager start the spreadsheet that becomes the BOLO list; the first formal BOLO listing goes out in August, naming “Tea Party organizations.”Source: TIGTA testimony, May 17, 2013

2011

June 3, 2011

Ways and Means Chairman Dave Camp writes Commissioner Shulman that the IRS “appears to have selectively targeted certain taxpayers who are engaged in political speech.” The same month the expanded criteria are briefed to the Director of Exempt Organizations, Lois Lerner.Source: House Oversight timeline

June 11–13, 2011

Lerner’s laptop stops communicating with the server and is found inoperable. IRS technicians cannot recover the hard drive; it was likely destroyed in April 2012 and its serial number was never recorded.Source: TIGTA, June 25, 2015

July 2011

At Lerner’s direction the criteria are changed to focus on “political, lobbying, or advocacy” activities rather than names.Source: TIGTA testimony, May 17, 2013

2012

January–May 2012

Determinations specialists change the criteria back to policy positions without senior approval (January); the criteria are revised a third time in May to track the activities the regulations actually address. TIGTA later counts the inappropriate criteria as in use for more than eighteen months across the two periods.Source: TIGTA testimony, May 17, 2013

February–June 2012

Lerner is issued a new BlackBerry on February 14; the old one is “wiped clean” and “removed as scrap for disposal” in June, according to a 2014 IRS declaration in Judicial Watch v. IRS.Source: IRS Kane declaration, via Daily Signal, Aug. 27, 2014

December 17, 2012

The status TIGTA’s audit froze: 298 applications on the “potential political cases” list; of 296 reviewed, 108 approved, 28 withdrawn, none denied, and 160 still open after 206 to 1,138 calendar days — some across two election cycles.Source: TIGTA testimony; TIGTA 2017-10-054

2013

April 9, 2013

Lerner emails colleagues to be careful what they put in email and asks whether the IRS’s Office Communicator instant messages are archived. She is told they are not.Source: House Oversight timeline

May 10, 2013

At an ABA Tax Section meeting Lerner answers a question from tax lawyer Celia Roady that had been arranged in advance, acknowledges that applications with “Tea Party” or “Patriot” in the name were singled out, and apologizes, calling it “absolutely inappropriate.” Acting Commissioner Steven Miller later calls the planted question “an incredibly bad idea.”Source: Fox News

May 14, 2013

TIGTA Report 2013-10-053, Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review: criteria based on names and policy positions rather than campaign intervention; unnecessary information requests including donor names; delays of years. Nine recommendations; the IRS agrees to all.Source: TIGTA report page

May 15, 2013

President Obama calls the conduct “inexcusable”; Acting Commissioner Miller’s resignation is announced.Source: MPR / AP

May 17, 2013

Inspector General J. Russell George testifies that the acting commissioner, the EO director and the Determinations staff all said no one outside the IRS influenced the criteria; TIGTA attributes the problem to insufficient management oversight and has reached no conclusion on political motive. The EO function has identified seven unnecessary questions, including donor information, and decided to destroy the donor lists that were submitted.Source: TIGTA testimony, May 17, 2013

May 22–23, 2013

Lerner appears before House Oversight, reads a statement that she has done nothing wrong, and invokes the Fifth Amendment. The IRS issues a document-preservation notice the same day. She is placed on paid leave the next day.Source: House Oversight timeline

June 2013

The IRS suspends the BOLO lists (later eliminated).Source: TIGTA 2015-10-025

June 4, 2013

A separate TIGTA report on the August 2010 Anaheim conference: about $4.1 million (the exact cost could not be established), 2,609 attendees, $135,350 to outside speakers including $17,000 for one who painted portraits on stage, presidential suites, and over $50,000 of training videos including the “Star Trek” parody; $49 million on 225 conferences in fiscal 2010–2012.Source: Journal of Accountancy

July 23, 2013

TIGTA on executive travel: $4.8 million (FY2011) and $4.7 million (FY2012); fifteen executives, about 4% of them, accounted for roughly a quarter of the cost, averaging 202 travel days in FY2011; several lived outside Washington and traveled there routinely.Source: TIGTA release

September 23, 2013

Lerner’s retirement takes effect.Source: Wikipedia, citing WSJ

November 2013

Treasury proposes regulations defining “candidate-related political activity” for (c)(4)s; the proposal draws more than 150,000 comments, the most on any proposed tax regulation.Source: IRS, May 22, 2014

2014

February–March 2014

IRS counsel identifies a gap in Lerner’s email production (February). On or about March 4, staff at the Martinsburg, West Virginia data center degauss 422 of 424 backup tapes from the decommissioned New Carrollton email server — about a month after the IRS realized the emails were missing and ten months after the preservation directive, of which TIGTA found the employees appeared unaware. On March 26 Commissioner Koskinen testifies that all of Lerner’s emails will be provided.Source: TIGTA, June 25, 2015

April 9, 2014

Ways and Means votes to refer Lerner to the Justice Department: discriminatory treatment of conservative organizations, misleading TIGTA, and possible §6103 disclosures through a personal email account.Source: Ways and Means

April 22, 2014

TIGTA reports that between October 2010 and December 2012 the IRS paid about $2.8 million in bonuses to roughly 2,800 employees with recent disciplinary actions, more than $1 million of it to 1,100 employees with their own tax-compliance problems.Source: GovExec

May 7, 2014

The House holds Lerner in contempt of Congress, 231–187, and refers the matter to the U.S. Attorney.Source: Tax Girl

May 22, 2014

The IRS withdraws the proposed (c)(4) regulations for revision. They are never finalized; appropriations riders beginning with the FY2016 omnibus bar Treasury from finishing them (verify rider).Source: IRS, May 22, 2014

June 13–20, 2014

The IRS tells Congress for the first time that Lerner’s January 2009–April 2011 emails were lost in the 2011 crash. TIGTA opens its investigation June 16. On June 20 Koskinen tells Ways and Means “every email has been preserved.”Source: House Oversight timeline

June 24, 2014

In a separate matter, the IRS pays $50,000 to settle National Organization for Marriage v. IRS after NOM’s 2008 Schedule B donor list was released to a requester and published in 2012; the court had found no evidence the disclosure was willful.Source: GovExec

July 2014

TIGTA takes custody of 744 backup tapes at Martinsburg. The same month the IRS introduces Form 1023-EZ.Source: House Oversight timeline

2015

March 27, 2015

TIGTA follow-up: all nine 2013 recommendations implemented; BOLO lists gone; of the 160 cases open in December 2012, 149 were closed by December 2014 — 107 approved, 27 failure-to-establish, 8 withdrawn, 7 disapproved — with 11 open, six of them in litigation.Source: TIGTA 2015-10-025

March 31, 2015

U.S. Attorney Ronald Machen tells Speaker Boehner that DOJ will not prosecute the contempt citation: Lerner “did not waive her Fifth Amendment privilege by making general claims of innocence.”Source: NPR

June 25, 2015

TIGTA reports on the missing emails: 744 tapes examined; 422 of 424 New Carrollton tapes degaussed in March 2014; 79,840 Lerner emails found across five backup sets (about 32,774 unique); more than 1,000 never before produced, which “did not add information relevant to the investigation”; 2,972 emails recovered from the BlackBerry, 190 of them new; as many as 23,000 to 24,000 further emails unrecoverable; and “no evidence that the erasure was done in furtherance of an effort to destroy evidence.”Source: TIGTA, June 25, 2015

August 5, 2015

The Senate Finance Committee’s bipartisan report (S. Rpt. 114-119), after nearly 1.5 million pages and more than 32 interviews. The same month the IRS tells a court Lerner also used a second email account under the name “Toby Miles.”Source: Senate Finance Committee

October 23, 2015

DOJ closes its criminal investigation with no charges: “substantial evidence of mismanagement, poor judgment and institutional inertia,” but “poor management is not a crime,” no evidence of political or corrupt motive, no obstruction.Source: DOJ letter, via Tax Girl

Fall 2015

Articles of impeachment are introduced against Commissioner Koskinen over the destroyed tapes and his statements to Congress.Source: Tax Girl, Dec. 7, 2016

2016–2018

December 6, 2016

The House votes 342–72 to refer the Koskinen impeachment resolution to committee, ending it; he serves out his term to November 2017.Source: Tax Girl, Dec. 7, 2016

September 28, 2017

TIGTA Report 2017-10-054: from August 2004 to June 2013 the IRS potentially used 259 selection criteria; of seventeen examined, several were left-leaning or ideological in the other direction — “Progressive” (61 cases), “Healthcare Legislation” (16), “ACORN Successors” (14), “Medical Marijuana” (12), “Occupy” — with 83 cases confirmed selected on them. Some took more than two years; most “Progressive” cases closed within one. Ten overlapped with the 2013 audit’s 298.Source: TIGTA 2017-10-054

October 26, 2017

DOJ announces settlements of Linchpins of Liberty v. United States (D.D.C.; a consent order in which the IRS acknowledges the screening was wrong and apologizes) and NorCal Tea Party Patriots v. United States (S.D. Ohio class action). Attorney General Sessions: the conduct “should never have occurred.” In September DOJ had reviewed the 2015 decision and declined to reopen it (verify).Source: DOJ, Z Street release (confirming both)

February 1, 2018

DOJ settles Z Street v. IRS, a pro-Israel group’s 2010 suit over a policy of extra scrutiny for Israel-related applications, with an IRS apology for the delay.Source: DOJ release

August 8, 2018

Judge Michael Barrett approves the NorCal class settlement; the order says it may not be used as evidence of liability. Press reports the fund as $3.5 million, with about $1.75 million later awarded in fees to the litigation funder.Source: Tax Notes; CBN; Bloomberg Law

2019–2020

In True the Vote v. IRS Judge Reggie Walton finds the IRS acted in bad faith and awards enhanced attorney fees for the period before the group’s 2013 exemption.Source: Procedurally Taxing

What was actually lost — and what wasn’t

• Emails. Lerner’s emails from roughly January 2009 to April 2011 went with the laptop hard drive that failed June 11–13, 2011. The drive could not be recovered by IRS IT and was likely destroyed in April 2012 without its serial number being logged.
• Backup tapes. 422 of 424 tapes from the decommissioned New Carrollton server were degaussed at Martinsburg on or about March 4, 2014 — after the May 2013 preservation notice and after the IRS knew the emails were missing. TIGTA estimated up to 23,000–24,000 emails on them were unrecoverable and found no evidence the erasure was meant to destroy evidence. From other tapes it recovered more than 1,000 emails nobody had produced.
• The BlackBerry. The device she carried through February 2012 was wiped and scrapped in June 2012 under ordinary IRS practice; the replacement was forensically examined in 2015 and gave up 2,972 emails, 190 of them new.
• Instant messages. The IRS’s Office Communicator system did not archive messages — which is what Lerner was asking about in April 2013. Nothing was “lost”; it was never kept.
• Not text messages. The “missing texts” story of December 2017–January 2018 was the FBI’s — the Samsung phones of agents Peter Strzok and Lisa Page — and had nothing to do with the IRS. The two stories get merged in memory because both involved government devices and gaps in the record; keep them apart.
• Other drives. In 2014 the IRS reported hard-drive failures for other employees connected to the matter as well, press accounts putting the number near twenty (verify).

What the investigations concluded

• TIGTA, May 2013. 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,” producing “substantial delays” and “unnecessary information requests.” Officials interviewed said no one outside the IRS influenced the criteria; the cause given was ineffective management oversight. Source.
• TIGTA, June 2015. No evidence the tape erasure “was done in furtherance of an effort to destroy evidence”; the employees appeared unaware of the preservation directive; the recovered emails added nothing material. Source.
• Senate Finance, August 2015 (bipartisan). “From 2010 to 2013, IRS management did not provide effective control, guidance, or direction”; Lerner learned of the Tea Party applications in early 2010 and did not tell her superiors; her division undertook “seven poorly planned initiatives, each of which failed”; the EO culture gave “little weight to customer service”; and the IRS’s loss of records, inaccurate statements about backups and failure to tell Congress “delayed the Committee’s investigation by more than a year.” Chairman Hatch separately concluded the mismanagement was aggravated by political bias; Ranking Member Wyden separately concluded “groups on both sides of the political spectrum were treated equally” and found no political interference. Source.
• Justice Department, October 2015. “Substantial evidence of mismanagement, poor judgment and institutional inertia”; “poor management is not a crime”; “no evidence that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives”; no obstruction; no charges. Source.
• TIGTA, September 2017. The watch lists ran in both directions over 2004–2013; 83 cases confirmed selected on left-leaning or other criteria; no assessment of whether those criteria were appropriate; no new recommendations. Source.
• The courts. A consent order acknowledging the screening was wrong and apologizing (Linchpins, 2017); a class settlement reported at $3.5 million with no admission of liability (NorCal, 2018); an apology for delay (Z Street, 2018); a bad-faith finding and enhanced fees (True the Vote, 2019–2020). Lerner herself was never charged with anything.

What changed afterward

• BOLO lists suspended June 2013 and eliminated; all nine TIGTA recommendations implemented and verified in 2015; an optional self-certification route offered to the stuck (c)(4) applicants in 2013.
• Form 1023-EZ, July 2014 — the three-page application that now handles most small charities, created in part to clear the backlog the affair exposed. (And, as the Nonprofits notes say, its weakness is that nobody reads the articles.)
• §506 (PATH Act, December 2015): a new (c)(4) must notify the IRS on Form 8976 within 60 days of forming, and (c)(4) applicants got the §7428 declaratory-judgment remedy, so a stalled application can go to court.
• The proposed “candidate-related political activity” regulations were withdrawn in May 2014 and never reissued; the facts-and-circumstances test of Reg. §1.501(c)(4)-1 still governs, which is why the (c)(4) political-activity line is still “not the primary activity.”
• Senate Finance’s recommendations: Hatch Act “further restricted” status for EO employees, cycle-time tracking, a 270-day decision deadline, manager training. The Taxpayer First Act of 2019 later reorganized the agency and created the Independent Office of Appeals.

Why it still matters at the desk

• The Form 1023 / 1024-A narrative is read by a Determinations specialist in Cincinnati or Covington. Write it as activities — who, what, when, where, how it furthers the purpose — not as a mission statement with adjectives. Advocacy organizations should say exactly what they will do and how much of it; the application that reads like a flyer is the one that gets the development letter.
• The IRS has no business asking an applicant for donor names, and said so itself in 2013. If a development letter asks, answer the question that is actually required and say why the rest is not.
• Schedule B is not public for 990 filers, is not reported by name for anyone but (c)(3)s and §527s since 2020, and a state may not demand it as a condition of registration (Bonta, 2021). The NOM leak and the Bonta case are the two bookends on why.
• A (c)(4) is the right vehicle for a client who wants to lobby and campaign within limits; it files Form 8976 within 60 days, can self-declare without applying, and has a court to go to if the IRS sits on its application. See the Nonprofits notes.
• And the preservation point: an organization that gets a letter from any agency keeps every record it has from that day. The IRS’s own failure to do so is the lesson.

Private reference. Compiled October 26, 2026 from TIGTA reports and testimony, the Senate Finance Committee report of August 5, 2015, Justice Department statements and court records as linked. Items marked (verify) rest on press accounts not independently confirmed. Opinions are marked as mine.