IRS Inspector General To Review Handling Of Conservative Groups

One commissioner ran the IRS when it engaged in targeted scrutiny of conservative groups applying for tax-exempt status. A second commissioner was in charge when the agency continued to withhold information from Congress. On Tuesday, they testified together for the first time, to the Senate Finance Committee.

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Inspector general from the Treasury Department says his office will review the ways the IRS enforces a critical law on political money. He spoke today at a Capitol Hill hearing.

There, senators questioned two former chiefs of the IRS on the agency's aggressive scrutiny of conservative groups that had applied for tax-exempt status. NPR's Peter Overby reports.

PETER OVERBY, BYLINE: Inspector General J. Russell George had signaled the broader investigation last week, a small footnote in his scathing audit report on the targeting of Tea Party and patriot groups that applied for a 501(c)(4) status. The audit said IRS employees had improperly zeroed in on the conservative groups and agency management had failed to exert proper oversight.

At today's hearing of the Senate Finance Committee, Democrats said a deeper problem is the muddle of laws and regulations that govern political activity by 501(c)(4)s. And George said that will be getting the attention of his office, the Treasury Inspector General for Tax Administration.

J. RUSSELL GEORGE: TIGTA will be conducting a review of the IRS's oversight of the level of campaign intervention by 501(c)(4)s shortly.

OVERBY: Last week, President Obama demanded that Steven Miller resign as acting commissioner of the IRS. And the FBI is investigating the agency. Miller testified today along with his predecessor, Douglas Shulman. Committee Democrats were united in challenging both the IRS conduct and the law on social welfare groups that get into politics. Here's Senator Ron Wyden of Oregon.

SENATOR RON WYDEN: If political organizations do not want to be scrutinized by the government, they shouldn't seek privileges like tax-free status and anonymity for their donors. To argue otherwise is to advantage tax cheats to the detriment of law-abiding Americans.

OVERBY: But that wasn't the only agenda at the hearing. Republicans pressed George on possible criminal conduct in the IRS. Michael Enzi of Wyoming asked if leaking taxpayer information was illegal. George answered this way.

GEORGE: We, thus far, have not uncovered any actions that we would deem illegal in this instant matter, sir.

OVERBY: Several Republicans asked about possible political influence, perhaps from the White House. George said his auditors interviewed IRS workers who did the targeting and they said the idea originated in their own office. He said he'd found no political influence. That led to this exchange with Senator Michael Crapo of Idaho.

SENATOR MICHAEL CRAPO: Now, have you reached the conclusion that there was none or that you haven't found it?

GEORGE: It's the latter, that we have not found any, sir.

CRAPO: Because it seems to me that it's almost unbelievable to look at what's happening and then say, well, there is no political motivation here.

OVERBY: Senate Finance is hardly the only committee probing the IRS. Treasury Secretary Jack Lew was at the Senate Banking Committee this morning, where the debate ran along the same partisan lines. Peter Overby, NPR News, Washington.

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