Former IRS Exempt Organizations director Lois Lerner is off the hook legally.

Former IRS Exempt Organizations director Lois Lerner is off the hook legally. Lauren Victoria Burke/AP file photo

Lois Lerner and Other IRS Employees Will Not Be Prosecuted

Justice Department tells lawmakers “ineffective management is not a crime.”

This story has been updated. 

After more than two years, millions of transferred documents, and dozens of hearings and depositions, employees of the Internal Revenue Service who feared prosecution from the tax-exempt organizations targeting controversy are now legally off the hook.

The Justice Department on Friday, in letters to the chairmen and ranking members of the House Judiciary and Oversight and Government Reform committees, said there is “no evidence to support a criminal prosecution” of former IRS Exempt Organizations division director Lois Lerner or any other IRS employee involved in the 2010-2012 mishandling of applications from primarily conservative nonprofits seeking status as social welfare organizations.

Assistant Attorney General Peter Kadzik said, “The IRS mishandled the processing of tax-exempt applications in a manner that disproportionately impacted applicants affiliated with the Tea Party and similar groups, leaving the appearance that the IRS’s conduct was motivated by political, discriminatory, corrupt, or other inappropriate motive.” However, he added, “ineffective management is not a crime.”

Though Republicans for three years have sought prosecutions for what they saw as deliberate targeting and political bias orchestrated by Lerner, Kadzik said there was “no evidence of political, discriminatory or corrupt motive,” and no evidence of any attempts to obstruct justice.

The department’s two-year investigation, he said, involved 100 interviews, review of 1 million pages and examination of 500 nonprofit applications for tax-exempt status. Lerner herself “cooperated fully” in 12 hours of interview without grant of immunity, the letter said. Similar cooperation came from former Internal Revenue Service Commissioner Doug Shulman and former acting commissioner Steven T. Miller.

Justice found no evidence that Lerner intentionally crashed her computer’s hard-drive, which may have destroyed many of her emails, though it did say Lerner exercised “poor judgment” in some of her comments captured in emails.

In reaction on Friday, House Ways and Means Committee Chairman Rep. Paul Ryan, R-Wis., said in a statement that his panel will continue to seek answers and hold the agency accountable. "While predictable coming from this administration, this news is still deeply disappointing,” he said. “Over the past several years, Ways and Means along with other congressional committees have conducted a thorough bipartisan investigation into the IRS's targeting of organizations based on their political beliefs. Through these investigations we have uncovered serious and unprecedented actions taken by the most senior IRS official in charge of the nonprofit unit, Lois Lerner, to deprive conservative organizations of their constitutional rights.” 

Oversight Chairman Rep. Jason Chaffetz, R-Utah., said, “This announcement is a reminder that the Obama administration continues to refuse to hold anyone accountable at the IRS. Over two years ago, the [Treasury Inspector General for Tax Administration] conducted an audit confirming the IRS was targeting conservative organizations because of their political beliefs. While DoJ may have closed its investigation, as a coequal branch of government, Congress will continue to seek accountability for the American people.”

His predecessor on the panel, Rep. Darrell Issa, R-Calif., called Justice’s move “a low point of accountability in an administration that is better known for punishing whistleblowers than the abuse and misconduct they expose. After stating that their investigation confirms that Tea Party and conservative groups were improperly targeted, they dismiss it merely as a byproduct of gross mismanagement and incompetence – ignoring volumes of evidence in the public record and efforts to obstruct legitimate inquires,” he said. “Giving Lois Lerner a free pass only reinforces the idea that government officials are above the law and that there is no consequence for wrongdoing.”

The Oversight panel’s ranking Democrat, Rep. Elijah Cummings of Maryland, as he has for three years, took a contrasting position. In a joint statement with Judiciary ranking member John Conyers, D-Mich., he said, "Today, the Justice Department confirmed the same conclusions we had years ago. Over the past five years, Republicans in the House of Representatives have squandered literally tens of millions of dollars going down all kinds of investigative rabbit holes – IRS, Planned Parenthood, Benghazi – with absolutely no evidence of illegal activity. I believe the American people have higher expectations for their elected officials, and they want Congress to start doing its job and focusing on issues that matter instead of these ridiculous, partisan, taxpayer-funded attacks."

Democrats added that the IRS had reported it had spent $20 million and 160,000 working hours among 250 employees responding to inquiries about the alleged targeting.

The IRS did not respond to a request for comment by publication time.

"We are gratified but not surprised by today's news," said Lerner's counsel at Zuckerman Spaeder LLP, in a statement. "Anyone who takes a serious and impartial look at the facts would reach the same conclusion as the Justice Department ...Ms. Lerner is pleased to have this matter finally resolved and looks forward to moving forward with her life."