Hearing on IRS: What ousted chief offers, Republicans don't buy

Was the Internal Revenue Service criminal in layering on extra scrutiny to tea party groups seeking nonprofit status, or just bureaucratically shortsighted and “obnoxious,” as the agency’s former head put it Friday?

The first position was taken by Republican members of the House Ways and Means Committee, which grilled Steven Miller, the IRS’s former acting head, during Friday’s committee hearing on the IRS scandal – the first such panel since the subject came to light a week ago.

The latter position was the counterclaim by Mr. Miller, the man who recently tendered his resignation at President Obama’s request even though he took over the agency last November, after the targeting had stopped.

“I think that what happened here was that foolish mistakes were made by people trying to be more efficient in their workload selection,” said Miller, who offered he found out about the issue in May of last year, when he was deputy commissioner for services and enforcement.

Miller’s explanation for why the IRS targeted conservative groups that applied for tax-exempt status and unduly delayed those applications tracked with what the Treasury Department’s inspector general for tax administration found in a report issued earlier this week.

“The listing described in the report, while intolerable, was a mistake and not an act of partisanship,” Miller said.

Agency employees thought they had found a useful heuristic for sorting a great number of groups that potentially required more research – flagging the names of organizations containing the words “tea party” or “9/12,” for example. Such research can determine if the group applying for tax exemption spent more of its time and money on politics than allowed by the 501(c)(4) designation being sought.

IRS staffers had no outside political interference, the report found.

On Friday Miller, echoing points made by Democrats on the panel, asked the committee to help sharpen the relevant tax law to make it easier to enforce – and beef up the agency’s budget.

“With respect to political activity, it would be a wonderful thing to get better rules, to get more clear rules,” he said. “In terms of our ability to get to this work, it would be good to get a little budget to get more than the people we have to do 70,000 applications and do our job.”

The panel’s Republicans simply weren’t buying what Miller was saying.

“On the one hand, you're arguing today that the IRS is not corrupt, but the subtext of that is you're saying, ‘Look, we're just incompetent,’ ” said Rep. Peter Roskam (R) of Illinois. “It is a perilous pathway to go down.”

House Republicans see the tendrils of malfeasance reaching into the White House, and many GOP members of the committee attempted to present the IRS scandal as evidence of an agency running amok.

“We also know that these revelations are just the tip of the iceberg,” said Rep. Dave Camp (R) of Michigan, the committee’s chairman. “It would be a mistake to treat this as just one scandal.”

In addition to the discussion of extra scrutiny of applications, Representative Camp offered up the fact that a White House official shared details of a private company’s tax status with reporters in August 2010 and that in May of the following year, the IRS asked donors to 501(c)(4) groups about whether they were paying appropriate gift taxes. Camp also said that the IRS leaked details of the donor list of a conservative organization and tax applications from other conservative groups to media organizations in 2012.

To Camp’s list of complaints, conservatives would add one more: the fact that a woman who helped oversee the IRS’s tax-exempt division was transferred to head IRS-related implementation of the president’s health-care law.

Senate minority leader Mitch McConnell (R) of Kentucky, a lawmaker who has frequently criticized the Obama administration for what he sees as the abuse of its power against conservative groups, called that revelation “stunning – just stunning.”

Asked Rep. Pat Tiberi (R) of Ohio: “Why would you promote somebody to that position who was in charge of the exempt organization division, which certainly has had some controversy over the last couple years, under an investigation?”

“Because she's a superb civil servant, sir,” Miller responded.

While neither Miller nor Republican members of the committee offered a clear timeline of when the woman, Sarah Hall Ingram, switched roles, Miller added that he “wouldn’t imagine” she was involved in the tea party issue.

Overall, Republicans were furious that the IRS testimony before their committee appeared to steer away from the ongoing investigation into the extra IRS scrutiny that some of their constituents reported.

Miller argued that he had always been truthful to the committee and that at previous hearings, he and other senior staffers did not have all the facts the committee wanted because the investigation by the inspector general was still pending.

Two facts stood out as emblematic of the larger discussion over dates and times.

At the time of the inspector general’s audit, some 300 applications for 501(c)(4) status were being held out for special attention by the IRS. Miller pointed out that only about 70 of those cases were for conservative groups.

At another juncture in the hearing, J. Russell George, the Treasury inspector general who conducted the report, responded to questions from Rep. Adrian Smith (R) of Nebraska about the IRS requesting donor lists from various applicants. He offered that of the 27 organizations that received requests for a donor list, about half (13) were tea party groups.

In Miller’s mind, these facts show that the IRS was not simply nailing conservative groups to the exclusion of all others.

But the inspector general found that all the groups with “tea party” or similar names were forwarded for special screening.

And while groups of other political persuasions got extra screening, “there were no ‘progressive’ or ‘organizing’ buzzwords that were used for targeting, is that correct?” asked Rep. Paul Ryan (R) of Wisconsin.

“That’s correct,” Miller said.