Inquiry Finds No IRS Wrongdoing in Audits

A congressional inquiry has cleared the Internal Revenue Service of charges that it purposely targeted conservative groups for audits but investigators found that in one instance Vice President Al Gore’s office had sought to check on the status of a union request for a tax ruling.

In a 170-page report that followed a 2 1/2-year investigation, staff members of Congress’ Joint Committee on Taxation said they had found “no credible evidence” that the IRS had been guilty of political bias in audits or rulings on tax issues affecting such groups.

But the document cited one incident in 1997 in which “White House officials” asked IRS employees to provide them with information on a tax matter affecting members of “a tax-exempt group.” Investigators said that the IRS refused.

Neither the tax-exempt organization nor the “White House officials” were named in the report, but a source close to the joint committee said that the incident involved an inquiry by a member of Gore’s staff about the status of a ruling on withholding-tax procedures sought by a labor union.

The source said that Gore’s office was not trying to influence the IRS’ decision but merely wanted to check on the status of the application so Gore could update a union leader. Such an inquiry would have been improper under IRS rules, the source said, and the vice president’s staff “should have known better.”

Gore’s office declined to provide specifics, but Melissa Bonney Ratcliff, a spokesman for the vice president, insisted that the query was “a straightforward status check” and “was handled appropriately by our office.”

The White House prohibits its staff members from contacting the IRS about specific cases unless the matter is cleared first by a presidential counsel. Sources said that in the case involving the union, the contact was approved.

The report said that “White House officials”--apparently meaning Gore’s staff--first contacted the Treasury Department’s Office of Tax Policy and were referred, “in apparent violation of” a Treasury order, directly to the IRS.

“White House officials then, in violation of written White House policies, contacted several IRS employees . . . and attempted to secure taxpayer return information,” the report continued. But the IRS refused and referred the matter to an inspector general.

Congressional sources said that the report is to be made public by the joint committee today or Friday. A copy was obtained Wednesday by The Times.

The report has been long awaited by conservative groups, some of which have believed that they were being targeted by the administration for political reasons. The joint committee is a nonpartisan panel whose director was appointed by GOP congressional leaders.

The administration has been plagued before by allegations that it has sought improperly to obtain information about political opponents. In 1996, White House personnel security director D. Craig Livingstone resigned in the wake of charges that he and an aide improperly secured about 900 FBI background files on Republican political appointees in 1993 and 1994.

The White House said later that the files were never used and were not collected to attack political adversaries. An independent counsel’s investigation concluded that there had been no criminal wrongdoing.

Nevertheless, conservative groups have asserted that the White House repeatedly has pressured the IRS to audit tax-exempt organizations whose members opposed Clinton administration positions and to delay or deny them favorable rulings under existing tax law.

Despite the committee staff’s findings, the Landmark Legal Foundation--a conservative Herndon, Va., group that has filed a case in federal court seeking the names of officials who have asked the IRS to audit such organizations--said that his group would continue its efforts.

Mark Levin, president of the foundation, said that, no matter what the committee concludes, his organization has compiled evidence that dozens of members of Congress had pressed the IRS to conduct such audits and that the IRS had carried them out.