Ousted US tax chief apologizes

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WASHINGTON (AP) The ousted head of the U.S. tax agency apologized to Congress on Friday for his agency’s tougher treatment of tea party and other conservative groups seeking tax-exempt status. He said they resulted from a misguided effort to handle a flood of applications, not political bias.

At a hearing that saw lawmakers from both parties harshly criticize his agency, former acting Internal Revenue Service head Steven Miller conceded that “foolish mistakes were made” by IRS officials trying to handle a flood of groups seeking tax-exempt status. He said the process that resulted in conservatives being targeted, “while intolerable, was a mistake and not an act of partisanship.”

Republicans are hoping to link the issues in an effort to raise questions about President Barack Obama’s credibility and make it harder for him to press a second-term agenda. Obama fired Miller on Wednesday.

The Obama administration has been forced on the defensive about last September’s terrorist attack in Benghazi, Libya, that killed a U.S. ambassador and three other Americans, and the government’s seizure of The Associated Press’ telephone records as part of a leaks investigation.

Friday’s hearing is the first of what are expected to be many on the tax targeting subject by congressional panels. Underscoring the seriousness of the episode, Miller was sworn in as a witness, an unusual step for the Ways and Means panel and one that could put Miller in jeopardy if he is later shown to have misled lawmakers with his testimony.

Though Miller and another top IRS official are stepping down, the Republican committee chairman said that would not be enough.

“The reality is this is not a personnel problem. This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers,” said Congressman Dave Camp.

Camp also said the tougher examinations that conservative groups encountered seemed to be part of a “culture of cover-ups and intimidation in this administration.” He offered no other examples.

Camp’s remark about cover-ups drew a sharp retort from the committee’s top Democrat, Congressman Sander Levin. Levin said if the hearing became a preview of the 2014 political campaigns, “we’ll be making a very, very serious mistake.”

The agency has said between 2008 and 2012, the number of groups applying for tax-exempt status as so-called social welfare groups more than doubled. Along with that was an increase in complaints that such groups were largely engaging in electoral politics, which is not supposed to be their primary activity.

“I do not believe partisanship motivated the people” at the IRS who engaged in the harsher screening for conservative groups, Miller said.

In recent months, Republicans on the Ways and Means panel had repeatedly asked the IRS about complaints from conservative groups that their applications were being treated unfairly.

On Friday, numerous Republicans wanted to know why Miller and others never told them the groups were being targeted, even after May 2012, when the IRS has said Miller was briefed on the practice. Miller was previously a deputy commissioner whose portfolio included the unit that made decisions about tax-exempt status.

Also testifying Friday was J. Russell George, the Treasury Department’s inspector general for tax administration.

In a report he issued this week, George said IRS officials reported they were not politically pressured to target conservative groups. Asked about that conclusion, George said Friday, “We have no evidence at this time to contradict that assertion,” but in prepared testimony to the committee he said he is continuing to investigate that question.

George’s report concluded that a regional IRS office that screened applications for the tax exemptions, improperly singled out tea party and other conservative groups for tougher treatment. The report says the practice began in March 2010 and lasted more than 18 months.

The report blamed “ineffective management” for letting IRS officials craft “inappropriate criteria” to review applications from tea party and other conservative groups, based on their names or political views. It found that the IRS took no action on many of the conservative groups’ applications for tax-exempt status for long periods of time, hindering their fundraising for the 2010 and 2012 elections.

Republicans have spent the past few days trying to link the IRS’ improper scrutiny of conservatives to Obama. The president has said he didn’t know about the targeting until last Friday, when Lerner acknowledged at a legal conference that conservative groups had been singled out.

Many of the groups were applying for tax-exempt status as social welfare organizations, which are allowed to participate in campaign activity if that is not their primary activity. The IRS judges whether that imprecise standard is met.

Attorney General Eric Holder has said the FBI was investigating whether the IRS may have violated applicants’ civil rights.

Obama has rejected the idea of naming a special prosecutor to investigate the episode, saying the investigations by Congress and the Justice Department were sufficient.

Obama has named Daniel Werfel, a top White House budget officer, to replace Miller.

(Copyright 2013 Associated Press.  All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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