The Internal Revenue Service (IRS) found itself in the spotlight again this week as two Congressional Committees brought in top IRS officials before them for questioning spurred by a Treasury Inspector General’s report of “inappropriate” targeting of conservative organizations by the tax agency. Headlining these hearings was news that Congressional investigators had received testimony connecting the IRS Chief Counsel’s office in Washington, DC, with the targeting efforts.
“As a part of this ongoing investigation, the Committees have learned that the IRS Chief Counsel’s office in Washington, DC, has been closely involved in some of the applications. Its involvement and demands for information about political activity during the 2010 election cycle appears to have caused systematic delays in the processing of Tea Party applications,” stated House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA), House Ways and Means Committee Chairman Dave Camp (R-MI), Oversight Subcommittee Chairman Jim Jordan (R-OH), and Ways and Means Subcommittee Chairman Charles Boustany (R-LA) in a letter to Acting IRS Commissioner Daniel Werfel. These Congressmen highlighted that investigators had found evidence that Lois Lerner, who earlier pleaded the 5th Amendment before Chairman Issa’s committee, had steered the tax exempt applications of interest to the Chief Counsel’s office, among others in the agency, and they noted that the Chief Counsel is one of two positions at the IRS appointed by the White House. The House Oversight and Government Reform Committee pressed at length on this subject in a hearing Thursday.
Additionally, the House Small Business Committee entered the fray. In a hearing at which Acting IRS Commissioner Daniel Werfel was the sole witness, Chairman Sam Graves (R-MO) declared, “In May, the Inspector General for Tax Administration issued a report that found the IRS had used inappropriate criteria to target certain conservative organizations that sought non-profit status. Since that time, Congressional investigations have raised additional questions about the IRS’s improper targeting, and whether the IRS may have also improperly targeted the tax returns of small businesses for added scrutiny or audit. We must ensure that all taxpayers, including small businesses, are treated fairly.” In the hearing, Acting Commissioner Werfel pointed out the differences in tax-exempt and small business enforcement and asserted, “[W]e don’t have any particular evidence at this time that the objective and analytical criteria that we put in place to review small businesses for potential increased scrutiny has any fundamental flaw that would lead one to the conclusion that there’s unfair targeting.”
By Aaron Mercer, Vice President of Government Relations
Published: July 19, 2013