The Washington Post

Treasury official defends IRS audit report

FILE - In this June 3, 2013, file photo, Treasury Inspector General for Tax Administration J. Russell George testifies on Capitol Hill in Washington. (Charles Dharapak/AP)

Treasury Inspector General J. Russell George said Thursday that the Internal Revenue Service failed to provide his office with important documents before he issued a report in May detailing problems with IRS methods for reviewing tax-exemption applications.

“I am disturbed that these documents were not provided to our auditors at the outset, and we are currently reviewing this issue,” George said during testimony before the House Oversight and Government Reform Committee.

Democrats in recent weeks have questioned the credibility of the inspector general’s report, saying it focused on the screening of conservative groups while missing important details about how the agency treated progressive organizations.

An audit by George found that the IRS had inappropriately targeted groups for additional scrutiny by focusing on political ideology instead of using politically neutral criteria.

Rep. Elijah E. Cummings (Md.), the committee’s ranking Democrat, requested that the inspector general appear before the panel to explain why his report did not mention the information about progressive groups. Cummings also wanted George to explain why he intervened last week to stop the release of new details about the agency’s search criteria, a fact that acting IRS Commissioner Daniel Werfel revealed during testimony before the panel on Wednesday.

“Mr. George, our goal is to have as much information as possible so we can draw accurate conclusions about the treatment of all of the groups — all of them,” Cummings said.

George said revealing the withheld information could violate taxpayer privacy protections, adding that career IRS lawyers had arrived at the same conclusion but later reversed their decision as more details became known about the agency’s handling of progressive groups. He promised Cummings that he would continue his discussions with the IRS to determine whether the details could be released to the committee.

Days before the inspector general’s findings were released in May, IRS official Lois Lerner acknowledged the agency’s mistakes and apologized for them. Her comments suggested that the agency’s actions applied only to conservative groups, and that notion quickly became the narrative.

“They used names like ‘tea party’ or ‘patriots,’ and they selected cases simply because the applications had those names in the title,” Lerner said during a May 10 American Bar Association conference. “That was wrong, that was absolutely incorrect, insensitive and inappropriate.”

Key Republicans, including the oversight panel’s chairman, Rep. Darrell Issa (R-Calif.), said the audit findings suggested that the IRS had systematically delayed tax-exemption applications for President Obama’s opponents during the 2010 and 2012 election cycles. Some GOP lawmakers suggested that high-ranking administration officials must have been involved in the alleged effort.

There has been no evidence of White House involvement.

The hearing also featured testimony from retired IRS tax-law expert Carter Hull, who said the IRS’s chief counsel’s office, headed by an Obama political appointee, helped develop the agency’s controversial review guidelines. His remarks reiterated statements he had already made to congressional investigators.

Issa and other GOP lawmakers released Hull’s comments in advance of the hearing.

White House officials suggested early on in the controversy that “line IRS employees in Cincinnati” were responsible for the agency’s actions.

But where the GOP has seen scandal, Democrats have said the IRS was trying to execute its mission, even though it fumbled its screening process.

House Democrats have published slides from a 2010 “Screening Workshop” and a list of screening criteria, both of which instructed agents to be on the lookout for “progressive” groups.

An IRS processor testified Thursday that she dealt exclusively with conservative groups.

“I was on this project until October of 2010, and I was only instructed to work ‘tea party’-
slash-‘patriot’-slash-‘9/12’ organizations,” said Elizabeth Hofacre, who had primary responsibility for handling the applications at the outset of the screening initiative.

Rep. Jackie Speier (D-Calif.) challenged Hofacre, asking whether she attended the 2010 screening workshop in which agents were told to also look for progressive groups.

“I do not specifically recall attending that training,” Hofacre said. “I do not dispute that I was there, either.”

All witnesses at Thursday’s hearing testified that they did not know of any political motivations for the IRS’s controversial actions.

Josh Hicks covers Maryland politics and government. He previously anchored the Post’s Federal Eye blog, focusing on federal accountability and workforce issues.

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