IRS employees have told congressional investigators that they were ordered by the agency’s Washington office to give extra scrutiny to tea party groups’ applications for tax-exempt status, according to excerpts from interviews with the employees that were released by House committee chairmen Wednesday.
Carter Hull, a tax law specialist with 48 years of experience at the IRS, told investigators that Lois Lerner, the former head of the Exempt Organizations division, demanded he send some of the reviews of tea party groups to the IRS chief counsel’s office in Washington. The chief counsel is one of two political appointees in the IRS.
The Internal Revenue Service has come under fire over the past several months after the agency’s auditor, J. Russell George, exposed that the agency was targeting conservative groups for intrusive scrutiny. This week, The Washington Times reported that government employees also improperly accessed IRS information to look at data on a handful of political candidates and donors.
Sen. Jeff Flake, Arizona Republican, said Wednesday that the investigation into the troubled agency must be expanded.
“It is clear that misconduct at the agency was not isolated to ‘rogue employees’ in the tax-exempt applications division,” Mr. Flake said. “This recent development suggests that political targeting was potentially more widespread.”
Even as Republicans push to broaden the inquiries, Democrats are preparing to go after Mr. George, the Treasury inspector general for tax administration, whose May report first exposed the IRS targeting of conservative groups. Mr. George and Mr. Hull are scheduled to testify Thursday before the House Committee on Oversight and Government Reform.
On Wednesday, Democrats accused Mr. George of suppressing evidence that the IRS also went after liberal groups, which they say would show the agency wasn’t following a political agenda when it asked intrusive questions of hundreds of groups applying for tax-exempt status.
Under questioning from Democrats on the House Small Business Committee, IRS acting Commissioner Danny Werfel said Mr. George blocked him from releasing documents that could have shown that progressive groups were also scrutinized.
Mr. Werfel said he disagreed with Mr. George but withheld the information “out of an abundance of caution.”
Mr. George has said that while some progressive groups were given scrutiny, it was just a small percentage. By comparison, the auditor said, every group with “tea party,” “patriot” or “9/12” in its name was subject to special scrutiny.
The back-and-forth underscores the stakes in the 2-month-old scandal, which Republicans say exposes a nasty political streak within the government, but which Democrats said only highlights the need for clearer rules about what tax-exempt groups can and cannot do in politics after they were unshackled by the 2010 Supreme Court ruling in the Citizens United case.
Mr. Hull told congressional investigators that the IRS was grappling with its response to the Supreme Court’s ruling in the Citizens United case, which left the door open for interest groups to play bigger roles in political activities.
Part of the answer of the IRS was to single out some tea party-affiliated groups’ applications as test cases, which Mr. Hull was handling. Some of those test cases still haven’t been decided, three years after they were filed, Mr. Hull said.
“That’s a very long time period,” he told investigators.
Mr. Hull described his own scrutiny of applications. He said he sent a letter and thought he received sufficient information to make a determination. But he was overruled by Ms. Lerner, who said the applications should get extra scrutiny.