IRS grilled for political motives

WASHINGTON - The firestorm buffeting the Internal Revenue Service intensified Friday as lawmakers began what they promised would be an extensive effort to learn whether there was any political motivation or White House involvement in the agency's recently acknowledged misdeeds.

Fueling those concerns, J. Russell George, the Treasury Department's top tax watchdog, said Friday that he had informed top Treasury officials last summer about problems related to the special attention the agency was paying some conservative organizations seeking tax-exempt status. George said he shared the information with the Treasury's general counsel in June and with Deputy Treasury Secretary Neal Wolin "shortly thereafter."

Such a timeline could be significant, as Republicans have been trying to establish how early the Obama administration learned about the agency's conduct, which officials were informed, and whether the coming presidential election affected their response.

The agency officials on the front lines of the controversy deny any political motives and say the problems were mostly the result of sloppy work.

At a hearing before the House Ways and Means Committee on Friday, Steven Miller, the former acting commissioner of the IRS, apologized for what he described as "horrible customer service" following revelations that IRS employees singled out for scrutiny conservative groups seeking tax-exempt status.

Miller, who resigned Wednesday, acknowledged "foolish mistakes" and described some of what occurred as "obnoxious," but insisted that none of it was politically driven.

Republicans were unconvinced and envision a more nefarious set of circumstances.

"The reality is, this is not a personnel problem," said Rep. Dave Camp (R., Mich.), the committee's chairman. "This is a problem of the IRS being too large, too powerful, too intrusive, and too abusive of honest, hardworking taxpayers."

Camp said he believed the problem reached beyond the tax-collection agency.

"This appears to be just the latest example of a culture of cover-ups and political intimidation in this administration," he said. "It seems like the truth is hidden from the American people just long enough to make it through an election."

Under almost four hours of questioning, Miller said he recently met with Treasury officials to discuss how the agency had targeted tax-exempt groups, but insisted that he never had contact with White House officials.

"Absolutely not," he said when asked by Rep. Devin Nunes (R., Calif.).

"How about President Obama's reelection campaign?" Nunes asked later.

"No," Miller replied.

Miller even challenged the notion that the groups were "targeted" because they were conservative. Instead, he said, they were "listed" because they were politically active.

Friday's session was the first of several hearings expected in coming weeks as lawmakers in both chambers plan to summon current and former IRS officials to Capitol Hill.

One measure of the potential political fallout from the controversy is that Democrats also felt compelled to denounce the agency even as they defended the administration.

"All of us are angry on behalf of the nation, and we are determined to get answers," said Rep. Sander Levin of Michigan, the panel's top Democrat. But Levin took exception to Camp's remarks about the Obama administration. "If this hearing becomes essentially a bootstrap to continue the campaign of 2012 and to prepare for 2014," he said, "we will be making a very, very serious mistake."

George, who leads the Treasury Inspector General for Tax Administration, released an audit this week saying that the IRS used "inappropriate criteria" to identify tea party and other conservative groups for review.

Levin asked Miller and George whether they had found any evidence of political motivation by the IRS employees who reviewed the applications for tax-exempt status. "We did not, sir," each of them replied.

George also told the panel that he began informing top Treasury officials about his audit last spring as part of an annual review of forthcoming investigations.