IRS puts head of problem office on leave

WASHINGTON — The Internal Revenue Service has replaced the head of the office under fire for improperly targeting conservative groups, a day after she invoked the 5th Amendment and refused to answer questions before a congressional committee.

Lois Lerner was suspended Thursday from her job as head of the IRS office of exempt organizations, the unit that polices charities and other nonprofits that get tax-exempt status.

In an email to agency employees, acting IRS Commissioner Daniel Werfel said he had chosen Ken Corbin as Lerner’s replacement. Corbin, a 27-year agency employee, was a deputy director in the IRS division that processes tax returns. Werfel said Corbin’s experience and strong management background “make him an ideal choice to help lead the exempt organizations area through this difficult period.”

Werfel, a career budget analyst, was named last week by President Obama to take over the agency. He replaced the previous acting commissioner, who was pushed out after the targeting became public.

“I have not done anything wrong,” Lerner said in an opening statement Wednesday to the House Oversight and Government Reform Committee. “I have not broken any laws, I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee.” But Lerner then declined to answer questions, prompting calls for her firing.

Sen. Charles E. Grassley (R-Iowa) said in a statement that the new head of the IRS asked Lerner to resign, but she refused. She then was placed on administrative leave.

“The IRS owes it to taxpayers to resolve her situation quickly,” said Grassley, a member of the Senate Finance Committee, which oversees the IRS. “The agency needs to move on to fix the conditions that led to the targeting debacle. She shouldn’t be in limbo indefinitely on the taxpayers’ dime.”

An inspector general’s audit found that staff in a Cincinnati field office used terms like “tea party” and “patriot” to select applications for extra scrutiny. Congress is investigating the IRS’ actions and the FBI has begun a criminal investigation.

The IRS did not respond to questions about Lerner’s departure, which was first reported by the National Review. Lerner’s attorney did not immediately respond to requests for comment.

A lawyer and career government employee, Lerner has spent 12 years at the IRS. The inspector general’s audit said that the improper screening had begun in 2010, but that Lerner did not learn about it until more than a year later, in June 2011. She ordered the staff to stop using politically charged terms — but other improper criteria surfaced again months later, the audit found.

J. Russell George, the Treasury inspector general for tax administration, said Wednesday that senior IRS managers failed to follow up to make sure the process had been fixed.

“So it was mismanagement. It was a lack of fulfilling the responsibility that they have,” George said, testifying at the House oversight panel hearing.

In a written response to the inspector general’s findings in November, Lerner said the screening language was not reviewed by senior IRS managers. Instead, she wrote, staff was looking for a way to identify nonprofit organizations that might be primarily focused on politics, which would be a violation of IRS rules.

“To the best of my knowledge, no individual or organization outside the IRS influenced the creation of these criteria,” Lerner wrote.

On Thursday, the top two senators on the Senate Permanent Subcommittee on Investigations sent a letter to Werfel urging that Lerner be suspended.

“We believe that the immediate removal of Ms. Lerner from office would be a vital step in helping to restore public trust in the agency,” said the letter, signed by subcommittee Chairman Carl Levin (D-Mich.) and Sen. John McCain (R-Ariz.).

The chairman of the House oversight panel, Rep. Darrell Issa (R-Vista), said committee lawyers believed that Lerner waived her 5th Amendment privilege when she gave a statement. She may be recalled for more questions, he said.

joseph.tanfani@latimes.com

Lisa Mascaro and Melanie Mason in the Washington bureau contributed to this report.