U.S. settling lawsuits over IRS scrutiny of tea party groups

WASHINGTON — The Trump administration has agreed to what a lawyer described as a “very substantial” payout to hundreds of tea party groups to settle a class-action lawsuit over the extra, often burdensome IRS scrutiny they received when applying for tax-exempt status during the 2012 election.

The settlement, announced Thursday, would end a chapter in a political scandal that dogged the Obama administration and continues to irk Republicans. In settling the case, the Trump administration is agreeing to government payments to groups that share its political beliefs. The conservative, anti-establishment tea party movement was something of a precursor to Donald Trump’s America-first presidential campaign.

The settlement still needs a judge’s approval.

Eddie Greim, a lawyer representing over 400 groups in a class-action suit, called the settlement generous but would not elaborate because details remained sealed. The Justice Department made no reference to a payout in its announcement.

The department said it is settling a second lawsuit with an apology from the IRS for the intensive scrutiny of the groups, which argued their constitutional rights were violated when they were singled out based on their political views.

Republicans were outraged in 2013 when the IRS admitted the targeting, in part by zeroing in on groups with words such as “tea party” or “patriot” in their names. Many had their applications delayed for months and years. Some were asked improper questions about their donors and even their religious practices, an inspector general’s report found.

The Obama Justice Department announced in 2015 that no one at the IRS would be prosecuted. It said investigators found mismanagement but no evidence that the tax agency had targeted a political group based on its viewpoints or obstructed justice.

Republicans were disappointed when the Justice Department, under Attorney General Jeff Sessions, said it would not reopen its case against Lois Lerner, who had led the IRS office that processes applications for tax exempt status.

Still, Sessions condemned the misconduct in a statement announcing the settlements. “Hundreds of organizations were affected by these actions, and they deserve an apology from the IRS,” he said.

Meanwhile, the White House is naming a Treasury official to serve as acting IRS commissioner, succeeding Commissioner John Koskinen, who had drawn the ire of Republicans over the tea party case.

The White House said David Kautter will be acting commissioner effective Nov. 13, allowing Koskinen to complete his five-year term.

J. DAVID AKE/AP FILE The Trump administration has settled lawsuits with dozens of tea party groups who said they received extra scrutiny when applying for tax-exempt status.