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'I Was Dismayed' To Learn What Agency Did, Ex-IRS Chief Says

Facing questions for the first time about why Internal Revenue Service personnel singled out some conservative groups for inappropriate scrutiny while he was head of the agency, former IRS Commissioner Douglas Shulman told Congress on Tuesday that "I was dismayed and I was saddened" to learn about what had happened under his watch.

Shulman, an appointee of President George W. Bush who ran the IRS from March 2008 into November 2012, told the Senate Finance Committee that the actions outlined in a report from the Treasury Department's inspector general "have justifiably led to questions" about whether the agency was treating conservative groups fairly when they applied for tax-exempt status.

The former commissioner said he did not know what some IRS staff had been doing in the years 2010-12, when they gave extra scrutiny to applications from groups who used such phrases as "tea party" or "patriot" when describing their organizations. "This is an issue that if someone spotted it, they should have brought it up the chain," Shulman said.

Both he and acting IRS commissioner Steven Miller disputed assertions from committee chairman Sen. Max Baucus, D-Mont., and Sen. Orrin Hatch, R-Utah, that they and other agency officials had misled Congress by not telling them earlier about the targeting of conservative groups.

"It's a lie by omission," Hatch told Miller, referring to the fact that Miller did not alert Congress even though lawmakers had been asking about such targeting.

"I did not lie, sir," Miller responded, adding that he feels he truthfully responded to questions he was asked in recent years. Miller is leaving the agency. His resignation was asked for, and accepted, by Treasury Secretary Jack Lew last week as the scandal built.

Word of what the IRS had been doing has ignited a political firestorm on Capitol Hill, where Republicans are accusing the agency of partisan bias. At Tuesday's hearing, Republican Sen. Pat Roberts of Kansas said "we can all see what has happening. ... Partisan harassment and abuse."

The inspector general's report did not accuse the IRS of acting for partisan purposes, but rather blamed "ineffective management." J. Russell George, Treasury's inspector general for tax administration, stressed at Tuesday's hearing that while his audit did not find evidence of partisan motivation, that is not the same thing as saying there was no such motivation.

The Justice Department has launched an investigation into whether IRS personnel broke the law.

On Friday, Miller said "foolish mistakes were made by people trying to be more efficient in their workload selection."

Update at noon ET. Asked To Apologize, Shulman Expresses Regret:

After being asked by Sen. John Cornyn, R-Texas, if he owes an apology to American taxpayers, Shulman said, "I very much regret what happened on my watch." He added that he was not "personally responsible for creating a list that had inappropriate criteria on it."

Does the buck stop with him, Cornyn asked? "This happened on my watch and I very much regret that it happened on my watch," Shulman responded.

"I don't think that qualifies as an apology," Cornyn observed.

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