In 2013, the IRS got audited and it wasn't pretty.
In 2013, the Internal Revenue Service (IRS) admitted that it had inappropriately targeted and scrutinized political groups applying for tax-exempt status. At first it was reported that the agency had only targeted conservative groups, including groups with "Tea Party" in its name. However, it was later revealed that some liberal groups, such as those associated with the Occupy Wall Street movement, were also targeted, although to a lesser extent. While none of these groups were denied tax-exempt status, their applications were delayed indefinitely. The scandal made national headlines in 2013, causing public and political scrutiny for the IRS.
The IRS Gets Audited
In early May 2013, the Treasury Inspector General for Tax Administration provided an audit report of the IRS. According to the audit, the IRS had inappropriately targeted political organizations, including groups with Tea Party in its name. The situation grew worse when Lois Lerner, Director of the Exempt Organizations in the IRS, answered a planted question by saying that the IRS was "apologetic" for "absolutely inappropriate" actions. She then went on to say that the targeting had been done by lower-level people in the Cincinnati branch of the IRS. However, it was soon revealed by the media, that two other regional IRS offices had been involved and that the targeted applications had been overseen by a group in Washington D.C., at the main branch of the IRS. In fact, according to the Treasury Inspector General's report, Lerner had been present at a meeting on the targeting on June 29, 2011.
On May 12, 2013, Congressional Republicans and Democrats asked that the IRS be fully investigated. Two days later, when the Inspector General's audit went public, President Obama released a statement which said, "The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity. This report shows that some of its employees failed that test. I’ve directed...