By Dana Bash, Athena Jones and Ashley Killough
Washington (CNN) — Officials at the Internal Revenue Service knew in June 2011 that their agents were targeting conservative groups for additional scrutiny on tax documents, an inspector general report expected to be released next week is expected to say. A congressional source familiar with the inquiry told CNN this on Saturday, confirming information first reported by the Associated Press.
An IRS official on Friday admitted the agency made “mistakes” in the last few years with tax-exempt status applications and specifically those submitted by groups with the words “tea party” or “patriot” in their name. Multiple conservative groups have said their applications were delayed and returned with lengthy requests for supporting materials, sometimes including website printouts and lists of guest speakers.
The Treasury Department inspector general for tax administration launched an audit of the agency’s practices, and spokesman David Barnes said the report is being finalized and is expected to be released next week.
Barnes said the review was requested by Rep. Darrell Issa, chairman of the House Committee on Oversight and Government Reform, and focused on programs and operations. An audit is separate from an investigation, which would assess wrongdoing such as violation of law or policies.
Lois Lerner, director of tax-exempt organizations for the IRS, said on a conference call Friday that the applications were processed by an office in Cincinnati that handles most applications for 501(c)(4) status and had seen the number of applications rise sharply to 3,400 between 2010 and 2012.
The congressional source understood that Lerner knew in 2011 but sent letters to Congress earlier this year without disclosing the extent of her knowledge.
Some 75 conservative groups, flagged by agents because of their names, were among 300 groups singled out for this additional scrutiny, she said.
“They did pick the cases by names and that’s absolutely inappropriate and not the way we should do things,” she said, though stressing it was done as a “shortcut,” not out of “political bias.”
Officials with some groups subjected to the scrutiny said they would have had to supply thousands of documents stacked inches thick to comply with the requests. Some chose not to, saying the agency was attempting to bury them in paperwork.
Discussions about the agency’s requests started online and members of Congress became involved.
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