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IRS Offers  New Details In Testimony

Washington — Tough congressional grilling yesterday of fired IRS chief Steven Miller failed to get answers about which agency employees subjected applications from Tea Party groups to special scrutiny but yielded a startling new admission: The Internal Revenue Service actually planted the question posed at a legal conference a week earlier that trigged the current political firestorm.

Miller, fired Wednesday by President Obama, parried with lawmakers during a nearly four-hour hearing by the House Ways and Means Committee. He defended as proper the actions taken by IRS employees who selected for close scrutiny tea party groups and other conservative organizations, arguing that the term “targeting” was pejorative.

What lower-level employees did, Miller insisted, was use terms such as “Tea Party” and “patriot” as shortcuts to identify groups that might not actually be social welfare organizations as required, but rather political groups with campaign motives. Once their actions were known to higher-ups, changes were made.

But Republican lawmakers pushed back, reading from the IRS questionnaires reportedly sent by agency officials to some of the conservative groups, questions about the content of prayers read and what is written on signs that would be displayed during pickets of groups such as Planned Parenthood.

Those sorts of questions led Rep. Kevin Brady, R-Texas, to accuse the Obama administration of being “drunk on power.” Brady alleged that some Texas Tea Party advocates were harassed by other branches of the government, ranging from the FBI to Labor Department inspectors.

“The broader question here is, is this still America?” said Brady.

While the televised hearings were full of bombastic theatrics, they also revealed important new information. Miller acknowledged that the Washington-based IRS executive who sparked the controversy with her apology for inappropriate treatment of Tea Party applications for tax-exempt status did so when answering a question planted by the agency itself.

The original IRS narrative was that Lois Lerner, the internal director who oversees approval of tax-exempt entities, let the apology slip when answering a question at a May 10 conference by the American Bar Association. The question was asked by Celia Roady, a tax partner in the law firm of Morgan Lewis & Bockius, who later told Reuters that she was surprised to get an answer.

Roady sits on the IRS advisory committee for tax-exempt entities, and Miller acknowledged to Rep. Devin Nunes, R-Calif., yesterday that Lerner answered a question first suggested by the agency itself.

Asked Nunes: “Was Ms. Roady’s question to Ms. Lerner about targeting conservative groups planned in advance?”

Miller responded: “I believe that we talked about that, yes.”

Miller added that he was OK with the question since a Treasury Department inspector general’s audit had been completed. He acknowledged he did not first share the apology with congressional committees that had been asking about the very issue for more than a year.

Miller also revealed that the woman who previously headed Lerner’s division was not punished for the action of her subordinates and instead was promoted. He called the woman, Sarah Hall Ingram, a “superb” employee who now heads a division responsible for implementing the tax provisions related to the Affordable Care Act health care law. Republican lawmakers said she had received more than $100,000 in bonuses, even though during the hearing Miller had said the IRS division she headed had displayed “horrible customer service.”

At the same hearing, the Treasury Department’s inspector general for tax administration offered some important new timelines. J. Russell George, a Bush administration appointee, told lawmakers he informed former IRS Commissioner Doug Shulman on May 30, 2012, of the forthcoming audit into alleged targeting of conservative groups.

Both Shulman and Miller, who took over as acting chief in November, had told Congress last year that no targeting was happening. Shulman and Miller will both appear before the Senate Finance Committee on Tuesday.

George also testified that he informed the Treasury Department’s general counsel about the audit on June 4, 2012, and the now-No. 2 man at Treasury, Neal Wolin, days later. The pending audit also had been published on the inspector general’s webpage. Wolin never passed along word to anyone outside of the department that an audit was being conducted, a Treasury official, speaking on condition of anonymity because of the sensitivity of the issue, told McClatchy late yesterday.

George said he briefed new Treasury Secretary Jacob Lew on the report soon after Lew took the helm Feb. 28, well after the IRS policy in question had been halted.

It all raises the question of why Lew or anyone else didn’t tell Obama, who has expressed outrage about the IRS targeting. Obama said repeatedly this week that he learned of it at the same time the American public did on May 10.

But the president did not answer a direct question at a news conference Thursday when asked whether he should have been told earlier.

In a statement later yesterday, the Treasury Department said Lew and Wolin were never presented audit findings, just word of the audit from the Treasury inspector general for tax administration, shorthanded as TIGTA.

“Treasury first became aware of TIGTA’s draft audit findings in March 2013,” the statement said. “In mid-March 2013, TIGTA provided to the IRS . an initial draft report for the Section 501(c) (4) audit. Shortly thereafter, IRS staff described the general contents of the draft report to Treasury.

“In mid-April 2013, TIGTA provided an updated draft report to IRS staff. In late April 2013, after notifying TIGTA, IRS staff shared a copy of the updated draft report with Treasury. Because the report was not yet final . Treasury staff did not share it with the Secretary or Deputy Secretary.”

McClatchy has asked the White House on a daily basis this week, with no response, whether or not White House lawyers shared information about the audit and its results with anyone else in the executive office and why the information did not make its way up to Obama, and whether it should have.

Republicans yesterday also pushed on another part of the IRS scandal, involving the publication by an investigative news organization of applications to the IRS from organizations that had not yet been approved for tax-exempt status.

On Monday, ProPublica wrote that the IRS division that had targeted conservative groups provided ProPublica with “nine pending confidential applications of conservative groups” for tax-exempt status when responding to a November 2012 request for applications of 67 nonprofit groups. Under federal law, those nine applications should not have been released.

Miller testified yesterday that the release of information was accidental and the employee, whose name was not provided, had been reprimanded. But Committee Chairman Dave Camp, R-Mich., accused the IRS of leaking the information to a news organization that Republicans are now labeling a liberal, pro-Democrat group.