Correction:

A previous version of this article incorrectly reported that the Treasury Department had informed the White House about plans by the Internal Revenue Service to disclose the findings of an inspector general’s audit at a legal conference. Treasury did not tell the White House about those plans, officials said. This version has been updated.

IRS scandal focus of Senate hearing

Video: Former IRS commissioner Douglas Shulman testified before the Senate Finance Committee on the IRS’s inappropriate targeting of certain groups seeking tax-exempt status. Shulman said the IRS “does its job in an admirable way athe great majority of the time.”

The Bush administration appointee who led the Internal Revenue Service during President Obama’s first term told Congress on Tuesday that he was saddened by some of the agency’s actions regarding applications for tax-exempt status during his tenure.

But Douglas Shulman rebuffed attempts by some senators to blame him for the fiasco in which conservative groups were listed separately for special scrutiny.

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Who knew what, and when
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Who knew what, and when

“I certainly am not personally responsible for making a list that had inappropriate criteria on it,” Shulman said, adding: “With that said, this happened on my watch, and I very much regret that this happened on my watch.”

Asked at one point by Sen. John Cornyn (R-Tex.) whether he would apologize to Cornyn’s constituents who were unfairly targeted by the IRS, Shulman said that he was not sure what occurred specifically with Texas-based groups and announced his regret that the wrongdoing occurred on his watch.

“Well, I don’t think that qualifies as an apology,” Cornyn said.

The confrontation Tuesday was one more example of the growing acrimony surrounding congressional efforts to get to the bottom of the IRS targeting scandal as the outgoing acting IRS commissioner, his predecessor and the Treasury Department tax watchdog rejected the idea that political partisanship played any role in singling out conservative nonprofits for heightened scrutiny.

The theatrics are expected to continue Wednesday when Shulman appears at a second hearing, this time before the House Committee on Oversight and Government Reform. He will be joined in the witness chairs by J. Russell George, Treasury inspector general for tax administration; Deputy Treasury Secretary Neal Wolin; and Lois Lerner, head of the IRS’s tax-exempt organizations office, where the problems occurred.

Lerner will invoke her right not to testify for fear of self-incrimination, her attorney told the House committee in a letter Tuesday.

Ali Ahmad, a spokesman for the committee, said that Lerner is under subpoena and that the panel “has a constitutional obligation to conduct oversight.”

Appearing before the Senate Finance Committee on Tuesday, Steven T. Miller, the acting commissioner who submitted his resignation under pressure last week, sat alongside Shulman, who headed the IRS from March 2008 to November 2012, as each detailed how they first learned of the situation and the steps they took to remedy it.

Testifying for the first time since IRS officials admitted to the situation, Shulman was asked why he did not come forward before to acknowledge the improper screening that occurred before his departure.

“I did not have a full set of facts” before an IRS inspector general’s audit was made public last week, Shulman told the panel. He said he knew “sometime in the spring of 2012” that “there was a list being used” to designate groups for extra scrutiny and that the term “tea party” in a group’s name was a criterion. But he said that he did not know what other words were on the list and “didn’t know the scope and severity of this.”

“I agree that this is an issue that when someone spotted it, they should have brought it up the chain, and they didn’t,” Shulman said under questioning. “Why they didn’t, I don’t know.”

Shulman said several times that he was “dismayed” and “saddened” to read about the agency’s improper actions in the report released last week and said that he had made certain George’s office looked into the matter once he learned about it.

But Shulman refused several times to take personal responsibility for the situation or to explicitly apologize.

After Cornyn asked for an apology, Sen. Pat Roberts (R-Kan.) offered Shulman another opportunity: “Are you responsible?”

“I’m deeply regretful,” Shulman said.

“Okay, never mind,” Roberts said, cutting him off. “Let’s just move on.”

Miller, as he had last week, took full responsibility for the agency’s decision to publicly apologize for the targeting by planting a question to raise the issue.

Under questioning, Miller explained that IRS leaders were aware that George was on the verge of releasing his report, so “we thought we should begin talking about this. We’d thought we’d get out an apology.”

Miller said he worked with Lerner, who leads the agency’s tax-exempt unit, to ensure that she would be asked a question about the controversy during a panel discussion at a conference.

“We wanted to reach out to the — to Hill staff about the same time [the report would] come out,” Miller said. But that strategy “did not work out,” he said. “Obviously, the entire thing was an incredibly bad idea.”

At a separate hearing held by the Senate Banking, Housing and Urban Affairs Committee, Treasury Secretary Jack Lew said he would have “advised against” the decision by the IRS to plant the question at a conference hosted by the American Bar Association in Washington instead of first notifying lawmakers.

Lew told the committee that he was not involved in the decision to plant the question but that some Treasury and IRS officials discussed the strategy in advance. He emphasized that the management of the matter was up to the IRS’s discretion.

Discussions about the IRS’s plans to apologize began in late April, according to a senior department official. That’s when IRS officials first told the Treasury that Lerner was considering making a speech in which she would make a public apology for inappropriate conduct. Also in late April, the IRS told Treasury that Miller would apologize when asked in forthcoming congressional testimony.

Treasury did not advise the IRS what it should do, the official said.

Treasury was told ahead of time that Lerner would be asked a question about the controversy at the American Bar Association conference.

Treasury did not tell the White House about the planned disclosure at the ABA conference.

On Tuesday, White House press secretary Jay Carney defended the administration’s deliberations on the issue.

“It was very important, in our view . . . that we not take any action that could even be seen to create the appearance of intervening in an ongoing investigation like this. In this case, an independent inspector general audit. And so, of course, we did not,” Carney said.

Aaron Blake, Zachary A. Goldfarb, Juliet Eilperin and William Branigin contributed to this report.

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