TODAY   |  May 11, 2013

IRS apologizes for singling out some groups for review

The IRS admits its agents singled out applications from conservative groups, scrutinizing tax exempt applications with “Tea Party” or “patriot” in the names. NBC’s Tom Costello reports.

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>>> the internal revenue service in hot water this morning after admitting that some of its agents in cincinnati inappropriately singled out conservative groups like the tea party when reviewing their qualifications as a nonprofit. in some cases the agency demanded detailed lists from those groups w. we turn back to tom costello in washington, d.c. we're keeping him busy this morning. good morning again.

>> i'll have traffic and weather at the bottom of the hour. good morning, guys.

>>> the irs says it was low level agents in cincinnati who singled out conservative groups for special attention and now the irs has apologized. there is an inspector general investigation and republicans are calling for congressional hearings . when the tea party was at its most vocal during the 2012 election cycle the irs now admits its agents singled out tax-exempt applications from conservative groups scrutinizing those applications with tea party or patriot in the names. at the time the bush appointed head of the irs insisted no group was being singled out.

>> there's absolutely no targeting. this is the kind of back and forth that happens when people apply for 501-c4 status.

>> reporter: but in a conference call friday the irs conceded its employees grouped together about 75 conservative applications but only it insists because it made for easier processing.

>> they didn't do it because of any political bias. they did it because it was their shortcut way of describing the cases for centralization.

>> reporter: conservative commentators, however, are not buying the explanation.

>> they were targeting conservative/right wing groups, harassing them, making it doubly tough for them to qualify for their tax-exempt status.

>> reporter: in ohio the former president of the liberty coalition says his state group was targeted by the irs , which demanded lists of members, donors, even family members and politicians who have spoken.

>> they were trying to identify who is in the tea party movement and what we know and what we're planning to do. that's pretty obvious to me.

>> reporter: to another group, the liberty township tea party , the irs sent a seven-page letter demanding to know its relationship with a private citizen who wasn't even a member of the group.

>> what does that translate to? does it translate perhaps to an audit? does it translate to probable cause on something else?

>> reporter: the white house says something clearly went wrong at the irs .

>> there is no question that if this activity took place it's inappropriate and there needs to be action taken and the president would expect that it be thoroughly investigated and action would be taken.

>> reporter: meanwhile, republican leaders are blasting the irs , accusing it of engaging in shameful abuse and calling for congressional hearings .

>> we need to know who did this, when they did it, how they did it, why they did it.

>> reporter: the irs won't say whether any irs employee will be disciplined but it does say these were career employees not political appointees. important to note there are only two political appointees at the irs . erica?

>> all right. tom costello, thanks.