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House showdown set over IRS targeting of conservative groups

WASHINGTON -- The ousted top official of the Internal Revenue Service will appear before a House committee Friday morning, his first public appearance since controversy erupted last week over how the agency mishandled applications for tax-exempt status for conservative advocacy groups.

Steven T. Miller, who resigned as acting commissioner Wednesday, is to testify at a hearing of the House Ways and Means Committee beginning at 9 a.m.  Also on the witness list is J. Russell George, the treasury inspector general for tax administration who released a report this week detailing how employees in a Cincinnati field office inappropriately flagged conservative groups applying for nonprofit status and subjected them to extensive questioning and lengthy processing delays.

The report pointed to lax management and confusion over laws regulating the political activity of such groups. Miller, in an op-ed published this week in USA Today before his resignation, said that the mistakes “were in no way due to any political or partisan motivation.”

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The assurances did little to quell critics, particularly as it became clear that Miller had not disclosed the problems to Congress in letters and testimony despite being briefed on it.

“This Committee wants the facts, and the American people deserve answers to why they were targeted on the basis of their political beliefs,” House Ways and Means Committee Chairman Dave Camp (R-Mich.) said Wednesday in response to Miller’s resignation. “The IRS has demonstrated a culture of cover-up and has failed time and time again to be completely open and honest with the American people.  This investigation will continue so Congress can ensure that no taxpayer is unfairly targeted.

"The Committee and the American people deserve honest answers from Mr. Miller at our hearing this Friday," he added.

The congressional scrutiny will continue next week, with both the Senate Finance Committee and the House Oversight Committee set to hold their own hearings on the issue.              

On Thursday, President Obama named Daniel Werfel, a senior budget official in the Office of Management and Budget, to the post of acting IRS commissioner. He will start at the post  Wednesday.

A second IRS official, Joseph Grant, also announced he would step down over the scandal. Grant, who leads the division overseeing tax-exempt and government entities, will leave the agency in June, officials said.

DOCUMENT: The Inspector General’s report on the IRS

Some of the key figures who will testify or are likely be the focus of testimony are:

J. Russell George, the treasury inspector general for tax administration. George’s office prepared the May 14 report that detailed the IRS’ inappropriate reviews of some conservative groups’ applications for tax-exempt status.

President George W. Bush appointed George to the post in 2004. George, an attorney from New York, also held various posts in the George H.W. Bush administration.

Lois Lerner, the director of the exempt organizations division of the IRS. On May 10, Lerner became the first IRS official to publicly acknowledge that the agency had been improperly targeting conservative groups.

Lerner, who has been at the IRS since 2001, was promoted to her current post in 2006. Before starting work at the IRS, she was a general counsel at the Federal Election Commission.

Douglas Shulman, a former IRS commissioner who was appointed by President George W. Bush. He testified to Congress in a hearing on March 22, 2012, that there was “absolutely no targeting” of conservative groups seeking tax-exempt status. The IRS has not said when Shulman learned of the targeting.

Shulman’s six-year tenure as commissioner ended in November. Before he was appointed commissioner, Shulman worked as a private-sector regulator of U.S. securities firms.

Steven T. Miller, the acting IRS commissioner since November  who announced his resignation Wednesday at the request of Treasury Secretary Jacob Lew. Miller will remain with the agency until early June to aid a smooth transition.

Before starting at the IRS as a tax lawyer, Miller was a congressional staffer and also worked in private practice.

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melanie.mason@latimes.com

Twitter: @melmason

Wes.venteicher@latimes.com

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