Taxes

WASHINGTON (AP) — 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, a top IRS official said Friday.

Organizations were singled out because they included the words "tea party" or "patriot" in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups.

In some cases, groups were asked for their list of donors, which violates IRS policy in most cases, she said.

WASHINGTON (AP) — The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes.

The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike. But opposition from some conservatives who view it as a tax increase will make it a tougher sell in the House. President Barack Obama has conveyed his support for the measure.

WASHINGTON (AP) — The Senate moved closer Thursday to passing a bill to tax purchases made over the Internet. But a final vote in the Senate was delayed until senators return from a weeklong vacation.

Although opponents hope senators will hear from angry constituents over the next week, they have a steep hill to climb to defeat the bill in the Senate.

The Senate voted 63-30 Thursday to end debate on the bill, setting up a final Senate vote to pass the bill on May 6. The final vote will only require a majority to pass the bill, so 14 supporters would have to flip to stop it.

WASHINGTON (AP) — Worried the Internal Revenue Service might target you for an audit? You probably should be if you own a small business in one of the wealthy suburbs of Los Angeles.

You might also be wary if you're a small-business owner in one of dozens of communities near San Francisco, Houston, Atlanta or the District of Columbia.

A new study by the National Taxpayer Advocate used confidential IRS data to show large clusters of potential tax cheats in these five metropolitan areas. The IRS uses the information to target taxpayers for audits.