Highly Charged IRS Case Pulls In Political Agendas

NPR's Peter Overby reports on the Congressional testimony of IRS officials in response to the scandal over special scrutiny of tea party groups. Underneath all the politics, there's a policy question that hasn't been addressed.

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At the other end of Pennsylvania Avenue, Congress is getting ready for another week of grilling the Internal Revenue Service. Yesterday, the agency's commissioner was the target of a House committee hearing, even though he'd left his job earlier in the week. NPR's Peter Overby reports.

PETER OVERBY, BYLINE: The House Ways and Means Committee called just two witnesses. One was the acting commissioner of the IRS, Steven Miller. He was forced to resign this week by President Obama. The other witness was J. Russell George, the Treasury Department's inspector general for tax administration. He wrote an audit report that exposed 18 months of IRS targeting for conservative groups as they sought tax-exempt status. The report ended years of IRS denials. Despite the focus on the two witnesses, the highly charged case constantly pulled bigger political agendas into the hearing. Here's the committee chairman, Republican Dave Camp of Michigan.

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

OVERBY: Democrats were not ready to defend the IRS. Here's the committee's ranking Democrat, Sander Levin, also from Michigan.

REPRESENTATIVE SANDER LEVIN: The IRS leadership has demonstrated a total disregard for the oversight role of the Congress and this committee.

OVERBY: That said, Levin warned the Republicans to stay on policy, not politics.

LEVIN: If instead this hearing essentially becomes an effort to score political points, it will be a disregard of the duties of this committee.

OVERBY: The committee grilled Miller on the details of the scandal, how IRS employees in Cincinnati used keywords, like Tea Party and patriot, to pick applicants for greater scrutiny. Most of the groups were seeking status as 501(c)(4) social welfare organizations. The agency hit some of them with intrusive questions and groups ran into delays that lasted as long as three years. But Russell George, the inspector general, said his investigation found no evidence that the idea of targeting came from IRS leadership or from political appointees higher up in the Obama administration.

J. RUSSELL GEORGE: This was an ongoing matter and we didn't have any indication from those initial interviews that they were implicated in this matter.

OVERBY: The questions to Miller were much more pointed. Several lawmakers asked why he had withheld information from them. He said he had always responded to their questions. He told Illinois Republican Peter Roskam that his office asked to meet with Ways and Means about the targeting as another IRS official was planning to make a public apology.

STEVEN MILLER: We were reaching out to the committee at the same time.

REPRESENTATIVE PETER ROSKAM: What form did that outreach take?

MILLER: We called to try to get on the calendar.

ROSKAM: You called to try and get on the calendar. Is that all you got?

MILLER: It's the truth.

OVERBY: New York Republican Tom Reed expressed amazement that Miller had been allowed to resign and even got paid to appear at the hearing.

REPRESENTATIVE TOM REED: Nothing bad is going to happen to you. You're going to get your full benefits. You're going to get everything that's associated with your retirement as an IRS employee.

MILLER: Nothing bad is happening to me, congressman?

REED: Yeah, financially. You're allowed to retire. That's the level of accountability in Washington, D.C. now.

OVERBY: Besides the scandal, there is a policy issue here. The 501(c)(4) tax-exempt status being sought by most of the groups allows a limited amount of partisan politicking that's sponsored by secret donors. How limited is unclear. And there's no agreement on how to fix those rules. Ellen April is a professor at Loyola Law School in Los Angeles and author of a textbook on tax-exempt law. She says that when the IRS failed to handle those applications fairly, it just made things worse.

ELLEN APRIL: I am afraid that all of this attention rather than leading to some sort of clearer rules are going to make it even harder to do so, and that's one of the sad consequences.

OVERBY: Congress will likely keep Miller and George busy for a while. They're due back on Capitol Hill Tuesday at the Senate Finance Committee and two other panels are planning hearings as well. Peter Overby, NPR News, Washington.

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