No criminal prosecution in IRS Tea Party case: U.S. Justice

By Joel Schectman

WASHINGTON (Reuters) - The U.S. Department of Justice said on Friday that it had found no basis for a criminal prosecution over the Internal Revenue Service's mishandling several years ago of requests for tax-exempt status by political groups aligned with the Tea Party.

"The IRS mishandled the processing of tax-exempt applications in a manner that disproportionately impacted applicants affiliated with the Tea Party and similar groups ... However, ineffective management is not a crime," Assistant Attorney General Pater Kadzik said in a letter to lawmakers.

In 2013, the IRS was enveloped in an embarrassing scandal after a government review found the agency had targeted tax-exempt political groups for greater scrutiny by looking for keywords, like "Tea Party" and "Patriots."

The row led to a congressional probe and accusations, primarily by Republicans, that the IRS was targeting those critical of the Obama administration. Lois Lerner, the former director of the agency's tax-exempt division later resigned.

The Justice Department said it found that Lerner mishandled oversight of tax-exempt applications and did not properly supervise her subordinates, but did not commit a crime.

(Reporting by Joel Schectman; Editing by Kevin Drawbaugh and Christian Plumb)

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