Hearing will examine IRS’s internal review of screening practices

Acting IRS Commissioner Daniel Werfel is scheduled to deliver a 30-day progress report to the House Ways and Means Committee on Thursday, when he testifies before lawmakers about his agency’s efforts to address screening practices that sparked a controversy.

President Obama and Treasury Secretary Jack Lew ordered the analysis after an inspector general’s report faulted the IRS for inappropriate behavior toward groups seeking tax-exempt status.

In a hearing announcement, the Republican-led House Ways and Means Committee described the IRS actions as “discriminating against applicants for tax-exempt status based on their personal beliefs.”

(Andrew Harrer/Bloomberg) - Principal Deputy IRS Commissioner Daniel Werfel.
Principal Deputy IRS Commissioner Daniel Werfel. (Andrew Harrer/Bloomberg)

On Monday, the IRS released its findings from an internal review relating to the controversy. Werfel acknowledged in a conference call that the agency’s screening methods had been inappropriate, but he said the agency had “not found evidence of intentional wrongdoing by anyone in the IRS.”

Treasury Inspector General Russell George is not scheduled to testify Thursday, but Democratic lawmakers are likely to use the hearing as an opportunity to question the audit he led.

Reps. Gerry Connolly (D-Va.) and Sandy Levin have already have raised doubts about the credibility of the inspector general’s findings, basing their skepticism on new revelations about the IRS’s screening criteria.

Democrats this week released a November 2010 BOLO, or be on the lookout list, the IRS used to consolidate groups for various types of actions, including extra scrutiny. The criteria included terms such as “progressive,” “medical marijuana” and “healthcare legislation.”

The inspector general’s report focused primarily on the targeting of conservative groups, and George told Congress that his office was unable to determine whether any of the cases reviewed in the audit involved progressive groups.

George’s spokeswoman, Karen Kraushaar, told the Hill newspaper on Tuesday that House Oversight Committee chairman Darrell Issa (R-Calif.) had asked for auditors to “narrowly focus on tea party organizations.”

“The audit served as the basis and impetus for a wide range of congressional investigations, and this new information [about search criteria] shows that the foundation of those investigations is flawed in a fundamental way,” Levy said in a statement on Tuesday.

Issa’s office has disputed Kraushaar’s characterization. Spokesman Ali Ahmad said that “the Committee engaged TIGTA in a discussion about the determinations process and asked that they broadly focus on concerns about the disparate treatment of applications.”

Kraushaar clarified her comments in an e-mail to the Post on Wednesday, saying: “Some members of Congress did express concern about the way tea party organizations were being treated,” but that the objective of the audit was to “assess the consistency of the EO function’s identification and review of applications for tax-exempt status involving potential political advocacy issues.”

To connect with Josh Hicks, follow his Twitter feed, friend his Facebook page or e-mail josh.hicks@washpost.comFor more federal news, visit The Federal Eye, The Fed Page and Post Politics. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Eric Yoder · June 26, 2013