IRS targeting controversy

In 2013, the United States Internal Revenue Service (IRS) revealed that it had selected political groups applying for tax-exempt status for intensive scrutiny based on their names or political themes. This led to wide condemnation of the agency and triggered several investigations, including a Federal Bureau of Investigation criminal probe ordered by United States Attorney General Eric Holder.

Initial reports described the selections as nearly exclusively of conservative groups with terms such as "Tea Party" in their names. According to Republican lawmakers, liberal-leaning groups and the Occupy movement had also triggered additional scrutiny, but at a lower rate than conservative groups. The Republican majority on the House Oversight Committee issued a report, which concluded that although some liberal groups were selected for additional review, the scrutiny that these groups received did not amount to targeting when compared to the greater scrutiny received by conservative groups. The report was criticized by the committee's Democratic minority, which said that the report ignored evidence that the IRS used keywords to identify both liberal and conservative groups.

In January 2014, the FBI told Fox News that its investigation had found no evidence so far warranting the filing of federal criminal charges in connection with the scandal, as it had not found any evidence of "enemy hunting", and that the investigation continued. On October 23, 2015, the Justice Department declared that no criminal charges would be filed.

United States federal tax law, specifically Section 501(c)(4) of the Internal Revenue Code (26 U.S.C. § 501(c)), exempts certain types of nonprofit organizations from having to pay federal income tax. The statutory language of IRC 501(c)(4) generally requires civic organizations described in that section to be "operated exclusively for the promotion of social welfare". Treasury regulations interpreting this statutory language apply a more relaxed standard, namely, that the organization "is operated primarily for the purpose of bringing about civic betterments and social improvements". As a result, the IRS traditionally has permitted organizations described in IRC 501(c)(4) to engage in lobbying and political campaign activities if those activities are not the organization's primary activity.

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