The ousted head of the IRS on Friday said he was sorry for his agency's targeting conservative and tea party groups for special scrutiny, while a Republican leader said blame could reach as high as the White House.
Acting IRS Commissioner Steven Miller told the House Ways and Means Committee that his agency failed the public trust when it singled out tea party and other conservative groups applying for tax exempt status from 2008 to 2012, but repeatedly denied agency officials misled Congress when lawmakers explicitly asked about the program.
"I want to apologize on behalf of the Internal Revenue Service for the mistakes that we made and the poor service we provided," said Mr. Miller before the panel, which was holding the first of several expected Capitol Hill hearings on the matter.
"The affected organizations and the American public deserve better. Partisanship, or even the perception of partisanship, has no place at the IRS."
He added that the IRS provided "horrible customer service."
Mr. Miller denied that political motivation was behind his agency's singling groups for special scrutiny that included the conservative buzzwords "tea party," "patriot" or "9/12" in their names. Rather, he portrayed a scenario of overworked IRS agents simply looking for shortcuts to tackle burgeoning caseloads of groups applying for tax-exempt status.
"What happened here was that foolish mistakes were made by people trying to be more efficient in their workload selection," he said.
Mr. Miller said the problem was internal and that no outside entities — such as the Treasury Department or the White House — were involved. He said his agency is still reviewing the matter and said changes already have been made to ensure the problem doesn't happen again.
But the panel's chairman, Rep. Dave Camp, Michigan Republican, said the matter shows a "culture of cover-ups" and "political intimidation" within the Obama administration.
Mr. Camp suggested the White House hid the scandal until after the 2012 elections.
"These revelations are just the tip of the iceberg. It would be a mistake to treat this as just one scandal," he said.
The chairman said the scandal shows the IRS has become too large and powerful and called for widespread reforms within he tax collecting agency.
"This systematic abuse cannot be fixed with just one resignation or two," he said. "And as much as I expect more people need to go, the reality is this is not a personnel problem."
President Obama on Wednesday forced Mr. Miller to resign, and other top IRS official is stepping down. Mr. Miller, a career civil servant, while not in charge of the agency at the time of the time of the misconduct, did hold a high-ranking position.
But lawmakers of both parties grilled Mr. Miller during the three-and-a-half hour hearing.
"This outrage is not Democrat and Republican. It involves the credibility of government as it relates to American citizens," said Rep. Charles B. Rangel, New York Democrat.
Rep. Sander Levin of Michigan, the panel's senior Democrat, has called for Lois Lerner, who heads the IRS division that oversees tax-exempt groups, to step down.
But Republicans were particularly harsh on the IRS official, saying they weren't satisfied with his apology and explanations.
"I'm sad and I'm sick to my stomach that Americans could be targeted by a government agency based on their political beliefs," said Rep. Lynn Jenkins, Kansas Republican.
Rep. Tom Price, Georgia Republican, said called the IRS's action "chilling" and "very, very serious."
Conservative groups have complained for more than a year that the IRS was targeting tea party groups, and repeatedly asked the agency last year for information on the matter.
On Friday Republicans accused Mr. Miller of failing to inform Congress of the IRS's practice of targeting conservative groups even after he had been briefed on the matter last year. The IRS official denied he mislead Congress.
But Rep. Earl Blumenauer, Oregon Democrat, said lawmakers are partially to blame for the problem because Congress has "slowly been starving" the IRS budget while their caseload has ballooned. This, coupled with an expanded tax code, led lower-level agency officials to make dangerous shortcuts, he said.
"I also hope that we look at the task they've been given, the budget they've been given and think a little bit about maybe a rate of return that would more than pay for itself if we invested in training, in management and having more than 150 people to deal with the avalanche of these applications," he said.
J. Russell George,Treasury's inspector general for tax administration who oversaw a yearlong investigation of the IRS scandal, told the committee his probe has found no examples so far of a political motivation in the IRS' targeting of conservative groups. Mr. George, the hearing's only other witness, called the IRS's actions improper but said his investigation didn't find any criminal activity by IRS personnel — though he added there will be "subsequent review on our part on this matter."
The inspector general's audit, released Tuesday, said the IRS's singling out of conservative groups for "burdensome" scrutiny delayed approving some applications for so long that the groups simply gave up. Mr. George said that of the 170 cases in which the IRS asked for follow-up information, 98 included "unnecessary questions" that slowed down the application process.
Of the 296 applications for tax-exempt status the independent watchdog reviewed for its audit, 108 cases had been approved, 160 were still open and 28 were withdrawn. No cases had been denied.
The watchdog recommended the IRS make nine major reforms aimed at speeding up but also clarifying the agency's approval process for tax-exemption — two of which the IRS initially rejected.
But on Friday, Mr. Miller suggested the House committee his agency would implement all of the recommendations.
"There's no air between us on the recommendations," he said.
The scandal broke open May 10, when Lois Lerner, who heads the IRS division that oversees tax-exempt groups, admitted organizations were singled out if they had "tea party" or "patriot" in their titles. In one more revelation from the hearing, Mr. Miller acknowledged that a question had been planted at an unrelated American Bar Association seminar last Friday to allow Ms. Lerner to "break" the news just days before the IG report was released.
In some cases, Ms. Lerner acknowledged. groups were asked for their lists of donors, which usually violates IRS policy. Attorney General Eric H. Holder said he launched an investigation the same day.
The Senate Finance Committee on Tuesday will hold the next hearing on the scandal. A witness list wasn't released as of Friday.
The following day the House Oversight and Government Reform Committee will conduct a hearing on the scandal, with Mr. George, Ms. Lerner, former IRS Commissioner Shulman and Treasury Deputy Secretary Neal S. Wolin all scheduled to testify.
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