IRS officials still don’t have full explanation of targeting


WASHINGTON – The outgoing head of the IRS said the agency still doesn’t know which staff members were responsible for using politically loaded language to screen out nonprofit groups, as senators pressed them to explain how certain conservative organizations applying for tax-exempt status received extra scrutiny.

The last two heads of the agency, Steven T. Miller and Douglas Shulman, testifying Tuesday before the Senate Finance Committee, once again linked the problems to poor decisions by lower-level employees working in the IRS’ Cincinnati field office, but Miller said they haven’t figured out who all of those employees were. They said the IRS has not done its own internal investigation, leaving that examination to the inspector general’s office.

Miller was forced out as acting IRS commissioner last week, after the release of an audit by the Treasury inspector general for tax administration revealed that the IRS, starting in 2010, improperly selected some groups applying for nonprofit status by using words like “tea party” and “patriot,” starting in 2010.


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Miller said that was apparently ordered by a “group manager in Ohio,” but he could not identify the manager. And both he and the head of the office of the Treasury inspector general for tax administration said they still hadn’t learned who, in January 2012, ordered that the criteria be changed again to pull in groups that were involved in “educating on the Constitution,” among other matters.

The lack of details left some senators frustrated.

“So why is that less than clear even now?” said Sen. Pat Toomey, R-Pa. “...I don’t know how we could come to the conclusion that this was not politically motivated. We don’t even know who made the decision.”

J. Russell George, the inspector general, repeated that his audit turned up no evidence that anyone in the White House or in senior IRS management directed the improper screenings. He said the examination was not an investigation, and employees were not under oath, and said his agency would be following up.

Shulman, who retired in November 2012 after five years as IRS commissioner, said he regretted that the problems happened on his watch, but he resisted a suggestion by one senator that he apologize to several Texas groups who received long lists of intrusive questions during the screening process. Shulman said “I didn’t touch individual cases and I certainly didn’t touch cases that involved political activity.”

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“The buck doesn’t stop with you,” said Sen. John Cornyn, R-Texas.

“I certainly am not personally responsible for creating a list that had inappropriate criteria on it,” Shulman said.

Shulman and Miller also were taken to task for failing to address the underlying issue that helped create the mess – determining how much political activity is permitted by social welfare organizations that get tax-exempt status. Since the Citizens United decision in 2010, such groups – which don’t have to report their donors to the public – have been used as vehicles for hundreds of millions in political spending.

Federal tax law says these groups should be “exclusively” devoted to the public welfare. But the IRS later issued a rule that said politics could not be the group’s “primary purpose,” though neither the agency nor Congress has ever defined what that means.

Miller agreed the IRS has done a poor job of providing guidance on the political spending guidelines.

“How long do we wait?” asked Sen. Sherrod Brown, D-Ohio.

“That’s a question that you’ll have to ask my successor, sir,” Miller said.

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