Acting IRS commissioner didn't reveal tea party targeting

WASHINGTON -- Acting Internal Revenue Service Commissioner Steven T. Miller repeatedly failed to tell Congress that tea party groups were being inappropriately targeted, even after he had been briefed on the matter.

The IRS said Monday that Miller was first informed on May, 3, 2012, that applications for tax-exempt status by tea party groups were inappropriately singled out for extra, sometimes burdensome, scrutiny.

At least twice after the briefing, Miller wrote letters to members of Congress to explain the process of reviewing applications for tax-exempt status without revealing tea party groups had been targeted. On July 25, 2012, Miller testified before the House Ways and Means oversight subcommittee but again was not forthcoming on the issue -- despite being asked about it.

At the hearing, Rep. Kenny Marchant, R-Texas, told Miller that some politically active tax-exempt groups in his district had complained about being harassed. Marchant did not explicitly ask if tea party groups were being targeted. But he did ask how applications were handled.

Miller responded, "We did group those organizations together to ensure consistency, to ensure quality. We continue to work those cases," according to a transcript on the committee's website.

He added, "It is my hope that some of the noise that we heard earlier this year has abated as we continue to work through these cases."

Earlier, Rep. Charles Boustany, R-La., had raised concerns with the IRS about complaints that tea party groups were being harassed. Boustany specifically mentioned tea party groups in his inquiry.

In a June 15, 2012, letter to Boustany, Miller gave a generic response. He said that when the IRS saw an increase in applications from groups that were involved in political activity, the agency "took steps to coordinate the handling of the case to ensure consistency."

He added that agents worked with tax law experts "to develop approaches and materials that could be helpful to the agents working the cases."

Miller did not mention that in 2011 those materials included a list of words to watch for, such as "tea party" and "patriot." He also didn't disclose that in January 2012, the criteria for additional screening was updated to include references to the Constitution or the Bill of Rights.

"They repeatedly failed to disclose and be truthful about what they were doing," said Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee.

Camp's committee is holding a hearing on the issue Friday and Miller is scheduled to testify.

"We are going to need to find out how much he knew," Camp said of Miller.

The Senate Finance Committee announced Monday that it will join a growing list of congressional committees investigating the matter.

The IRS apologized Friday for what it acknowledged was "inappropriate" targeting of conservative political groups during the 2012 election to see whether they were violating their tax-exempt status. In some cases, the IRS acknowledged, agents inappropriately asked for lists of donors.

The agency blamed low-level employees in a Cincinnati office, saying no high-level officials were aware.

When members of Congress repeatedly raised concerns with the IRS about complaints tea party groups were being harassed last year, a deputy IRS commissioner took the lead in assuring lawmakers that the additional scrutiny was a legitimate part of the screening process.

That deputy commissioner was Miller, who is now the acting head of the agency.

Camp and other members of the Ways and Means Committee sent at least four inquiries to the IRS, starting in June 2011. Utah Sen. Orrin Hatch, the top Republican on the Senate Finance Committee, sent three inquiries. Rep. Darrell Issa, R-Calif., chairman of the House oversight committee, sent at least one.

None of the responses they received from the IRS acknowledged that conservative groups had ever been targeted, including a response to Hatch dated Sept. 11, 2012 -- four months after Miller had been briefed.

In several letters to members of Congress, Miller went into painstaking detail about how applications for tax-exempt status were screened. But he never mentioned that conservative groups were being targeted, even though people working under him knew as early as June 2011 that tea party groups were being targeted, according to an upcoming report by the agency's inspector general.

"It is almost inconceivable to imagine that top officials at the IRS knew conservative groups were being targeted but chose to willfully mislead the committee's investigation into this practice," said Boustany, who chairs the Ways and Means oversight subcommittee. "This revelation goes against the very principles of free speech and liberty upon which this country was founded, and the blatant disregard for which the agency has treated Congress and the American taxpayer raises serious concerns about leadership at the IRS."

The IRS issued a statement Monday saying that Miller had been briefed on May 3, 2012 "that some specific applications were improperly identified by name and sent to the (exempt organizations) centralized processing unit for further review." That was the unit in Cincinnati that handled the tea party applications.

Miller became acting commissioner in November, after Commissioner Douglas Shulman completed his five-year term. Shulman had been appointed by President George W. Bush.

On June 29, 2011, Lois G. Lerner, who heads the IRS division that oversees tax-exempt organizations, learned at a meeting that groups were being targeted, according to a draft of the report by the Treasury inspector general for tax administration.

At the meeting, Lerner was told that groups with "Tea Party," `'Patriot" or "9/12 Project" in their names were being flagged for additional and often burdensome scrutiny, the report says. Lerner instructed agents to change the criteria for flagging groups "immediately."

However, when Lerner responded to inquiries from the House oversight committee, she didn't mention the fact that tea party groups had ever been targeted. Her responses included 45-page letters in May 2012 to Rep. Darrell Issa, R-Calif., who chairs the committee, and Rep. Jim Jordan, R-Ohio, who chairs a subcommittee.

Lerner also met twice with staff from the House Ways and Means oversight subcommittee to discuss the issue, in March and in May 2012, according to a timeline constructed by committee staff. She didn't mention at either meeting that conservative groups had been targeted, according to the timeline.

"Knowing what we know now, the IRS was at best being far from forth coming, or at worst, being deliberately dishonest with Congress," Hatch said Monday.

On Monday, President Barack Obama said he first learned about the issue from news reports on Friday. White House spokesman Jay Carney said the White House counsel's office was alerted the week of April 22 that the inspector general was finishing a report concerning the IRS office in Cincinnati. But, he said, the counsel's office did not get the report and the president did not learn the focus until Friday.

"If, in fact, IRS personnel engaged in the kind of practices that had been reported on and were intentionally targeting conservative groups, then that's outrageous and there's no place for it," Obama said Monday at a press conference. "And they have to be held fully accountable, because the IRS as an independent agency requires absolute integrity, and people have to have confidence that they're applying it in a non-partisan way, applying the laws in a non-partisan way."

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Associated Press reporters Jim Abrams and Henry C. Jackson contributed to this report.

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