The National Debt Clock hangs on a wall next to an office for the Internal Revenue Service near Times Square in New York May 16, 2011. 
 
 WASHINGTON When tax agents started singling out non-profit groups for extra scrutiny in 2010, they looked at first only for key words such as 'Tea Party,' but later they focused on criticisms by groups of "how the country is being run," according to investigative findings reviewed by Reuters on Sunday. 
 
 Over two years, IRS field office agents repeatedly changed their criteria while sifting through thousands of applications from groups seeking tax-exempt status to select ones for possible closer examination, the findings showed. 
 
 At one point, the agents chose to screen applications from groups focused on making "America a better place to live." 
 
 Exactly who at the IRS made the decisions to start applying extra scrutiny was not clear from the findings, which were contained in portions of an investigative report from the Treasury Inspector General for Tax Administration (TIGTA). 
 
 Expected to be made public this week, the report was obtained in part by Reuters over the weekend as a full-blown scandal involving the IRS scrutiny widened, embarrassing the agency and distracting the Obama administration. 
 
 In one part of the report, TIGTA officials observed that the application screening effort showed "confusion about how to process the applications, delays in the processing of the applications, and a lack of management oversight and guidance." 
 
 After brewing for months, the IRS effort exploded into wider view on Friday when Lois Lerner, director of exempt organizations for the IRS, apologized for what she called the "inappropriate" targeting of conservative groups for closer scrutiny, something the agency had long denied. 
 
 At a legal conference in Washington, while taking questions from the audience, Lerner said the agency was sorry. 
 
 She said the screening practice was confined to an IRS office in Cincinnati; that it was "absolutely not" influenced by the Obama administration; and that none of the targeted groups was denied tax-free status. 
 
 It is clear from the TIGTA findings that Lerner was informed in June 2011 that the extra scrutiny was occurring. Key words in the names of groups - including 'Tea Party,' "Patriot' and '9/12' - were being used to choose applications, TIGTA found. 
 
 "Issues" criteria were also used, TIGTA found. Scrutiny was being given to references to "Government spending, Government debt, or taxes; Education of the public via advocacy/lobbying to 'make America a better place to live;' and Statements in the case file (that) criticize how the country is being run." 
 
 Under these early criteria, more than 100 tax-exempt applications had been identified, according to TIGTA. 
 
 Briefed on the practice, Lerner ordered changes. 
 
 CONSTANTLY SHIFTING CRITERIA 
 
 By July 2011, the IRS was no longer targeting just groups with certain key words in their names. Rather, the screening criteria had changed to "organizations involved with political, lobbying, or advocacy." 
 
 But then it changed again in January 2012 to cover "political action type organizations involved in limiting/expanding government, educating on the constitution and bill of rights, social economic reform/movement," according to the findings contained in a Treasury Department watchdog report. 
 
 In March 2012, after Tea Party groups complained about delays in processing of their applications, then-IRS Commissioner Doug Shulman was called to testify by a congressional committee. He denied that the IRS was targeting tax-exempt groups based on their politics. 
 
 The IRS said on Saturday that senior IRS executives were not aware of the screening process. The documents reviewed by Reuters do not show that Shulman had any role. 
 
 In May 2012, the criteria for scrutiny were revised again to cover a variety of tax-exempt groups "with indicators of significant amounts of political campaign intervention (raising questions as to exempt purpose and/or excess private benefit)," according to a TIGTA timeline included in the findings. 
 
 THOUSANDS OF APPLICATIONS 
 
 Each year the IRS reviews as many as 60,000 applications from groups ranging from charities to labor unions that want to be classified as tax-exempt. "Social welfare" groups dedicated to the general good can be tax-exempt under tax law 501(c)4. 
 
 These groups do not have to disclose the identities of their donors and they can spend money on advertising for general issues, but they may not endorse specific candidates or parties. 
 
 The U.S. Supreme Court's January 2010 "Citizens United" ruling unleashed a torrent of new political spending and 501(c)4 groups became a popular conduit for some of it, on both ends of the political spectrum, but especially for conservatives. 
 
 The number of applications sent to the IRS by groups seeking 501(c)4 status rose to 3,400 in 2012 from 1,500 in 2010. As money poured into 501(c)4 groups, campaign finance activists began to raise questions and demanded a crackdown by the IRS. 
 
 (Reporting by Kevin Drawbaugh, Kim Dixon and Patrick Temple-West; Editing by Eric Walsh) ||||| The Internal Revenue Service's scrutiny of conservative groups went beyond those with "tea party" or "patriot" in their names—as the agency admitted Friday—to also include ones worried about government spending, debt or taxes, and even ones that lobbied to "make America a better place to live," according to new details of a government probe. 
 
 The investigation into the IRS's targeting of conservative groups has revealed that high-ranking IRS officials knew as early as 2011 of the practice. John McKinnon reports. 
 
 The investigation also revealed that a high-ranking IRS official knew as early as mid-2011 that conservative groups were being inappropriately targeted—nearly a year before then-IRS Commissioner Douglas Shulman told a congressional committee the agency wasn't targeting conservative groups. 
 
 Enlarge Image Close Associated Press Tax-exempt groups organized under section 501(c)(4) of the Internal Revenue Code are allowed to engage in some political activity, but the primary focus of their efforts must remain promoting social welfare. 
 
 The new disclosures are likely to inflame a widening controversy over IRS handling of dozens of applications by tea-party, patriot and other conservative groups for tax-exempt status. 
 
 The details emerged from disclosures to congressional investigators by the Treasury Inspector General for Tax Administration. The findings, which were reviewed by The Wall Street Journal, don't make clear who came up with the idea to give extra scrutiny to the conservative groups. 
 
 The Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax exempt status. John McKinnon reports on the News Hub. 
 
 The inspector general's office has been conducting an audit of the IRS's handling of the applications process and is expected to release a report this week. The audit follows complaints last year by numerous tea-party and other conservative groups that they had been singled out and subjected to excessive and inappropriate questioning. Many groups say they were asked for lists of their donors and other sensitive information. 
 
 On Sunday, a government official said the report will note that IRS officials told investigators that no one outside the IRS was involved in developing the criteria the agency now acknowledges were flawed. 
 
 On Friday, Lois Lerner, head of the IRS tax-exempt-organizations division, said the agency was "apologetic" for what she termed "absolutely inappropriate" actions by lower-level workers. She said those workers had selected some conservative groups for extra scrutiny to determine whether their applications should be approved. She said they had picked groups for extra scrutiny according to whether they had "tea party" or "patriot" in their names, among other criteria. 
 
 Ms. Lerner came to the IRS in 2001 from the Federal Election Commission, and assumed her current position in 2006. IRS officials said Sunday that Ms. Lerner wasn't available for comment, and she didn't respond to an emailed request. 
 
 GOP lawmakers stepped up their criticism on Sunday. "The bottom line is [IRS officials] used key words to go after conservatives," Rep. Darrell Issa (R., Calif.), said Sunday on NBC's "Meet the Press." "There has to be accountability for the people who did it. And, quite frankly…there's got to be accountability for people who were telling lies about it being done." 
 
 Some Democrats also voiced criticism. "I'm concerned about that," said Sen. Dianne Feinstein (D., Calif.), also on NBC. "Somebody made the decision that they would give extra scrutiny to this particular group. And I think we have to understand why." 
 
 The IRS said over the weekend it is in the process of independently confirming the dates mentioned on the timeline of events contained in the inspector general report, "but we believe the [inspector general's] timeline is correct." The IRS said the report supports its view that its missteps weren't politically motivated and were limited to lower-level workers. 
 
 The IRS also said the report reflects that "IRS senior leadership was not aware of this level of specific details" at the time of a March 2012 hearing where Mr. Shulman denied any targeting of conservative groups. Mr. Shulman, who no longer works for the IRS, declined to comment. 
 
 The new details suggest that agency workers were examining statements in applications for tax-exempt status to determine whether groups had political leanings. 
 
 Tax-exempt social-welfare groups organized under section 501(c)(4) of the Internal Revenue Code are allowed to engage in some political activity, but the primary focus of their efforts must remain promoting social welfare. That social-welfare activity can include lobbying and advocating for issues and legislation, but not outright political-campaign activity. But some of the rules leave room for IRS officials to make judgment calls and probe individual groups for further information. 
 
 Organizing as such a group is desirable, not just because such entities typically don't have to pay taxes, but also because they generally don't have to identify their donors. 
 
 IRS officials said last week that the focused review of conservative groups was initiated by lower-level civil servants in the IRS Cincinnati office, not by political appointees in Washington, and that it wasn't politically motivated. They say it stemmed from a misguided effort to centralize review of a growing number of applications for tax-exempt 501(c)(4) status. 
 
 But questions continued to swirl about the failure of IRS officials to disclose the problems until the inspector general's report was about to become public. 
 
 The timeline contained in the draft report indicates that IRS scrutiny of tea-party and other conservative groups began as early as 2010 and came to the attention of Ms. Lerner, the head of the tax-exempt-organizations division, at least by the following year. 
 
 The report's timeline indicates that the criteria were changed to be more neutral in July 2011 after Ms. Lerner "raised concerns." The criteria for heightened scrutiny continued to evolve over the next year or so, even as complaints from tea-party groups—and questions from GOP lawmakers—mounted over IRS inquiries to various groups about their activities. 
 
 Letters from Ms. Lerner in April and May 2012 responding to questions by Republican lawmakers made no mention of the problems that had surfaced in the IRS unit. 
 
 According to the draft report, on April 24 and 25 of last year, officials in Ms. Lerner's office were reviewing "troubling questions" that had been asked of organizations, including "the names of donors." 
 
 Ms. Lerner's April 26 letter to Mr. Issa, the chairman of the House Oversight and Government Reform Committee, said that "there are instances where donor information may be needed…such as when the application presents possible issues of…private benefit." 
 
 The report indicates that in 2010 and 2011, some IRS workers weren't just singling out groups because their names contained certain words, as IRS officials suggested on Friday, but appeared to be probing for indications of political interests or leanings. 
 
 According to the report, by June 2011 some IRS specialists were probing applications using the following criteria: "issues include government spending, government debt or taxes; education of the public by advocacy/lobbying to 'make America a better place to live'; statements in the case file criticize how the country is being run." 
 
 Write to John D. McKinnon at john.mckinnon@wsj.com and Siobhan Hughes at siobhan.hughes@dowjones.com 
 
 A version of this article appeared May 13, 2013, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: Wider Problems Found at IRS. ||||| At various points over the past two years, Internal Revenue Service officials singled out for scrutiny not only groups with “tea party” or “patriot” in their names but also nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general. 
 
 The documents, obtained by The Washington Post from a congressional aide with knowledge of the findings, show that the IRS field office in charge of evaluating applications for tax-exempt status decided to focus on groups making statements that “criticize how the country is being run” and those that were involved in educating Americans “on the Constitution and Bill of Rights.” 
 
 The staffers in the Cincinnati field office were making high-level decisions on how to evaluate the groups because a decade ago the IRS assigned all applications to that unit. The IRS also eliminated an automatic after-the-fact review process Washington used to conduct such determinations. 
 
 Marcus Owens, who oversaw tax-exempt groups at the IRS between 1990 and 1999, said that delegation “carries with it a risk” because the Cincinnati office “isn’t as plugged into what’s [politically] sensitive as Washington.” 
 
 Owens, now with the firm Caplin & Drysdale, said that before the agency’s most recent reorganization, it had a series of “tripwires in place” that could catch unfair targeting, including the fact that the IRS identified its criteria for special scrutiny in a public manual. 
 
 View Graphic A report due this week says the IRS targeted groups with names containing “tea party” and “patriot.” 
 
 “There’s no longer that safety valve, and as a result, the IRS has been rolling the dice ever since,” said Owens, who worked at the agency for nearly a quarter-century and now represents some organizations seeking tax-exempt status. 
 
 The IRS came under withering attack from GOP lawmakers Sunday. Sen. Susan Collins of Maine, a moderate Republican, described the practice as “absolutely chilling” and called on President Obama to condemn the effort. 
 
 “This is truly outrageous,” she said on CNN’s “State of the Union,” adding that even though White House spokesman Jay Carney has said the matter deserves an investigation, “the president needs to make crystal clear that this is totally unacceptable in America.” 
 
 In March 2012, then-IRS Commissioner Douglas H. Shulman, who was appointed by President George W. Bush, told Congress that the agency was not targeting conservative groups. On Sunday, the agency declined to answer questions about whether senior officials asked IRS exempt organizations division chief Lois G. Lerner and her staff in Cincinnati about this heightened scrutiny before testifying it did not take place. 
 
 “There has to be accountability for the people who did it,” House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) said on NBC’s “Meet the Press,” adding: “And, quite frankly, up until a few days ago, there’s got to be accountability for people who were telling lies about it being done.” 
 
 The appendix of the inspector general’s report — which was requested by the House Oversight and Government Reform Committee and has yet to be publicly released — chronicles the extent to which the IRS’s exempt organizations division kept redefining what sort of “social welfare” groups it should single out for extra attention since the 2010 Supreme Court ruling Citizens United v. Federal Election Commission. That decision allowed corporations and labor unions to raise and spend unlimited sums on elections as well as register for tax-exempt status under Section 501(c)(4) of the tax code, as long as their “primary purpose” was not targeting electoral candidates. 
 
 The number of political groups applying for tax-exempt status more than doubled in the wake of the Citizens United ruling, forcing agency officials to make a slew of determinations despite uncertainty about the category’s ambiguous definition. 
 
 Of the 298 groups selected for special scrutiny, according to the congressional aide, 72 had “tea party” in their title, 13 had “patriot” and 11 had “9/12.” Lerner, who apologized Friday for the targeting of such groups, described it as a misguided effort to deal with a flood of applications for tax-exempt status. She did not release the names of the groups. 
 
 On June 29, 2011, according to the documents, IRS staffers held a briefing with Lerner in which they described giving special attention to instances where “statements in the case file criticize how the country is being run.” She raised an objection, and the agency adopted a more general set of standards. Lerner, who is a Democrat, is not a political appointee. 
 
 But six months later, the IRS applied a new political test to social welfare groups, the document says. On Jan. 15, 2012, the agency decided to look at “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform movement,” according to the appendix in the IG’s report. 
 
 The agency did not appear to adopt a more neutral test for 501(c)(4) groups until May 17, 2012, according to the timeline in the report. At that point, the IRS again updated its criteria to focus on “organizations with indicators of significant amounts of political campaign intervention (raising questions as to exempt purpose and/or excess private benefit.)” 
 
 Campaign reform groups have been pressing the IRS for several years to conduct greater oversight of nonprofits formed in the wake of the Citizens United case, given that many have become heavily involved in elections. “But this isn’t the type of enforcement we want,” said Paul Ryan, a senior counsel at the Campaign Legal Center. “We want nonpartisan, non-biased enforcement.” 
 
 Loyola Law School professor Ellen Aprill, who specializes in tax law, said any groups that have applied for tax-exempt status has “opened themselves up to scrutiny” by the IRS. “It’s part of their job to look for organizations that may be more likely to have too much campaign intervention,” she said. “But it is important to try to make these criteria as politically neutral as possible.” 
 
 Aprill said one of the problems is the agency’s top officials have not provided clear enough guidelines on what constitutes too much political activity for a social welfare group because it’s been “a hot potato,” and that now with this new controversy, “it’s going to make it even more difficult to do so.” 
 
 Toby Marie Walker, president of the Waco Tea Party, said the IRS subjected her group to a series of unreasonable requests after it applied for tax-exempt status in June 2010. The requests came in early 2012, Walker said, after being initially informed by an official in the Cincinnati field office that he was “sitting on a stack of tea party applications and they were awaiting word from higher-ups as to how to process them.” 
 
 The agency asked the group’s treasurer to supply information on its “close relationship” with current candidates and elected officials as well as future candidates, along with detailed information about its contributors and members. It also asked for transcripts of any radio interviews its officials had done and hard copies of any news articles mentioning them. 
 
 “That would take me years to do,” Walker said, noting that in some cases, Chinese media outlets referred to her organization. “Am I responsible for every news article across the globe?” 
 
 The group had even more difficulty providing transcripts and details of speakers at its events, since they hosted informal gatherings such as “rant contests” where anyone could come and express their views. 
 
 While the IRS awarded the Waco Tea Party tax-exempt status about six weeks ago, Walker said the group was now considering suing the agency since the process not only consumed time and effort but prompted the group to scale back its 2012 get-out-the-vote operation. “We were afraid to do it and get in trouble,” she said. 
 
 Sal Russo, chief strategist for the Tea Party Express, said that even though the agency’s actions intimidated tea party adherents, he gives the IRS “credit for standing up and admitting” it targeted them. And while only two of the agency’s officials — the commissioner and the chief counsel — are political appointees, Russo said the administration needs to conduct better oversight. 
 
 “The culture is set at the top,” Russo said. “Obviously you can’t control what every employee does. But you have to set a standard, particularly with the IRS, to be squeaky clean.” 
 
 Josh Hicks and Julie Tate contributed to this report. 
 
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– The IRS scandal goes beyond the Tea Party: Documents show that over the past two years while evaluating applications for tax-exempt status, officials also zeroed in on groups that criticized the government or educated Americans about the Constitution or the Bill of Rights; as well as groups that were interested in taxes, government spending, or government debt; limiting or expanding the government; improving America; or "social economic reform." The documents show how the Cincinnati office frequently redefined the types of groups that should be targeted for increased scrutiny, even after division chief Lois Lerner objected in June 2011, the Washington Post reports. In March 2012, then-IRS Commissioner Doug Shulman testified before Congress that the IRS was not singling out conservative groups, the Wall Street Journal reports. It wasn't until May 2012 that a neutral policy was adopted, with the IRS agreeing to target any group that was significantly concerned with political campaigns. The documents don't make it clear who the decision-maker was, Reuters reports.