IRS chief tells lawmakers: ‘We will uncover everything’

WASHINGTON — The new head of the Internal Revenue Service acknowledged that the embattled agency “undermined the public’s trust” when employees singled out conservative political groups seeking tax-exempt status for extra scrutiny, and he pledged full cooperation with lawmakers in pursuing reforms.

In his first public testimony since taking over at the IRS in mid-May, acting Commissioner Daniel Werfel called actions by employees “completely inexcusable and inherently damaging” to the agency, blaming what he called “a fundamental failure by IRS management” to prevent it. He said he would hold accountable any employees responsible for misdeeds, promising at one point, “We will uncover everything.”

“This important agency is founded on a principle of operating impartially. And we failed in that most basic core principle here, and it’s devastating to us as an agency and to the people in that agency,” he said.

Previous IRS officials who have testified gave much less definitive answers to such questions. Werfel has the advantage of having not been at the agency when the problems occurred. As a result, the tenor of Monday’s hearing contrasted with other sessions in which members often sparred with invited witnesses.

When Werfel said he would seek no new funding for the agency as it proceeded with an across-the-board review, House Appropriations Committee Chairman Harold Rogers (R-Ky.) quipped: “I’m beginning to like you.… That’s music to my ears.”

“I don’t know whether to admire you or pity you,” Rep. Steve Womack (R-Ark.) said to Werfel at one point. “You have the weight of the U.S. Constitution on your shoulders, literally and figuratively.”

But even as he presented himself as a willing partner in tackling the issues involving the IRS, Werfel’s answers to lawmakers’ questions revealed the difficulties he faces in overhauling the practices and personnel of the agency’s huge bureaucracy.

“There aren’t a lot of easy answers,” Werfel said when he was asked how he could ensure that future applicants would not face the same kind of scrutiny. “That doesn’t mean we’re not going to find those answers. We will.”

Asked whether he would “clean house,” Werfel noted that new individuals were in place at offices where the wrongdoing occurred, but that current employees could not be fired unless a full investigation provided cause.

J. Russell George, the Treasury Department inspector general for tax administration, also testified that no employees of the Cincinnati IRS office responsible for reviewing applications for tax-exempt status “would acknowledge who, if anyone,” ordered workers to identify certain groups for closer scrutiny.

And although members of Congress pressed Werfel to figure out what went wrong and fix it, George warned that if Werfel inserted “himself too much into the process” of investigating who may have ordered political targeting, it “might impact our ability and the Justice Department’s ability to continue our review.”

Several congressional committees are investigating a variety of allegations involving the IRS. On Tuesday, the House Ways and Means Committee is scheduled to hear testimony from at least six conservative groups that say they were targeted by the IRS.

On Thursday, the House Government Oversight and Reform Committee, chaired by Rep. Darrell Issa (R-Vista), will hold its second hearing on IRS activities. That hearing will look at findings of a Treasury Department inspector general audit that found the IRS spent up to $50 million on 220 separate employee conferences between 2010 to 2012.

The audit found that for one conference in Anaheim, several employees stayed in presidential suites that cost up to $3,500 a night. A newly released parody video showing employees dancing the “Cupid Shuffle” is the second such film produced, at a cost of up to $60,000, according to the audit.

The apparently wasteful spending has been decried by members of both parties.

michael.memoli@latimes.com