Created on Thursday, 27 June 2013 Written by ALAN FRAM,Associated Press
WASHINGTON (AP) — The chief of the Internal Revenue Service is facing questions from Congress for the first time since revelations that progressives joined the tea party on a list of groups closely watched for by screeners handling applications for tax-exempt status.
FILE - This March 22, 2013 file photo shows the exterior of the Internal Revenue Service building in Washington. The Internal Revenue Service long has resisted efforts by an internal watchdog to help groups seeking tax-exempt status, creating a culture that enabled agents to improperly target such organizations for additional scrutiny, the National Taxpayer Advocate reported Wednesday. Nina E. Olson, who runs the independent office within the IRS, said in her annual report to Congress that culture continues today, despite the scandal that has rocked the tax agency for more than a month. (AP Photo/Susan Walsh, File)
Danny Werfel, invited to testify Thursday to the House Ways and Means Committee, seemed sure to face questions about whether the agency's tough scrutiny of conservative organizations extended to others as well.
Lawmakers also planned to ask Werfel about a report he issued Monday, six weeks after President Barack Obama named him to head the troubled agency. Werfel wrote that he found mismanagement but no purposeful wrongdoing at the IRS in a report that also pointed to the officials who have been replaced and other changes he has made.
Ways and Means Chairman Dave Camp, R-Mich., said Wednesday that Werfel's report didn't answer key questions Republicans have had about the IRS' screening of conservative groups.
"Who started it? Why was it allowed to go on for so long? Why were conservative groups targeted for their political beliefs?" Camp said.
Democrats seem determined to shift the focus to this week's disclosure that the term "Progressive" was also on the agency's watch lists.
They have complained that a May report by J. Russell George, the Treasury Department inspector general, mentioned tea party groups but did not say progressives were listed too. They also have criticized him for not revealing the inclusion of progressives even though lawmakers asked him about it at hearings, and for producing a report that focused too narrowly on the treatment of conservatives.
"There is increasing evidence that the May 14, 2013, audit was fundamentally flawed and that your handling of it has failed to meet the necessary test of objectivity and forthrightness," Rep. Sander Levin of Michigan, top Democrat on Ways and Means, wrote Wednesday in a letter to George.
George's audit was requested by Rep. Darrell Issa, R-Calif., chairman of the House Oversight Committee, and Rep. Jim Jordan, R-Ohio, a senior member of that panel.
Karen Kraushaar, spokeswoman for the inspector general, said Wednesday that lawmakers had asked George to investigate complaints from tea party groups that the IRS was treating their applications harshly. In a later interview, she said the audit focused on the criteria the IRS used to choose all applicants to examine for possible political activity — which could affect their eligibility for tax-exempt status.
Asked why George didn't acknowledge to lawmakers that "Progressive" appeared on the same list as "Tea Party," she said: "His response was appropriate. He wasn't able to give an exact answer at that particular instant. But our auditors are looking at it."
IRS regulations allow tax-exempt social welfare organizations to engage in some political activity but it cannot be their primary mission. The agency must decide whether each applicant's activities meet those vague guidelines.
The IRS has been under withering fire since May 10, when an agency official conceded publicly that it had targeted conservative groups seeking tax-exempt designations for tough examinations and apologized for it. Until then, IRS officials had insisted that conservatives had not been singled out for such treatment.
Some Republicans have suggested that the focus on conservative groups came from the White House or other Obama allies.
There has been no evidence of that so far. Instead, according to investigators and testimony from IRS workers to congressional committees, workers in the agency's Cincinnati office that handled tax-exempt applications developed the lists to help them find groups that merited additional scrutiny.
Obama and members of both parties in Congress have said such targeting is inexcusable. At least five top officials — including former Acting IRS Commissioner Steven Miller — have been removed.
On Monday, Werfel said that when he started his job last month, the IRS was still using "inappropriate" terms to choose applicants for close scrutiny. Werfel didn't specify what those terms were but said he ended the agency's use of the lists earlier this month.
Documents released this week by Democrats on the Ways and Means panel showed that the screening lists included terms like "Progressives" and "Healthcare legislation." Lists from April of this year included "Paying National Debt" and "Green Energy Organizations."
It remains unclear whether progressive groups faced the same extent of mistreatment as conservative organizations, dozens of which faced delays exceeding a year. In addition, many received scores of detailed questions that officials have since said were overly intrusive, including demands for information about their donors.