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Published: Saturday, 5/18/2013

Ousted IRS leader faces heat of panel’s inquiry

He admits to poor ‘customer service,’ offers few answers

BY TRACIE MAURIELLO
BLOCK NEWS ALLIANCE
Members of the audience applaud after Rep. Mike Kelly (R., Pa.), a member of the House Ways and Means Committee, criticized ousted IRS chief Steven Miller during a hearing on IRS scrutiny of conservative groups.  Members of the audience applaud after Rep. Mike Kelly (R., Pa.), a member of the House Ways and Means Committee, criticized ousted IRS chief Steven Miller during a hearing on IRS scrutiny of conservative groups.
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WASHINGTON — A book club was asked to account for what it had been reading. An Iowa anti-abortion group was asked to “detail the content” of members’ prayers.

Another anti-abortion organization was asked what kinds of signs it planned to use for protests at Planned Parenthood clinics. A Texas Tea Party group was asked for a list of every email message it ever sent. Dozens of organizations were asked for their lists of contributors.

Those are among the examples outraged lawmakers brought out Friday during a House Ways and Means Committee hearing aimed at dissecting the reasons the Internal Revenue Service singled out conservative groups for extra scrutiny of applications for tax-exempt status.

“This is a huge blow to the faith and trust the American people have in government,” Rep. Mike Kelly (R., Pa.) said in an impassioned speech that drew prolonged applause from observers who had come to hear answers from recently ousted interim IRS chief Steven Miller.

“You should be outraged by this, but you’re not,” Mr. Kelly told Mr. Miller.

“Is there any limit to the scope of where you folks can go? Is there anything at all?” Mr. Kelly asked. “Is there any question you should not have asked? My goodness, ‘How much money do you have in your wallet?’ ‘Who do you get emails from?’ ‘Whose signs do you put up in your front yard?’ This is a tax question?”

To members’ frustration, Mr. Miller offered few direct answers and little new information but did apologize for “the mistakes that we made and the poor service we provided.” The affected organizations and the public deserve better, he said in a statement before lawmakers unleashed their torrent of questions.

Steven Miller, right, and J. Russell George, Treasury inspector general for tax administration, testify on Capitol Hill in Washington. Steven Miller, right, and J. Russell George, Treasury inspector general for tax administration, testify on Capitol Hill in Washington.
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“Partisanship, or even the perception of partisanship, has no place at the IRS,” he said even while insisting that partisanship did not motivate employees who singled out applicants for extra scrutiny.

“We provided horrible customer service here. I will admit that, we did. Horrible customer service. Whether it was politically motivated or not is a very different question,” Mr. Miller testified.

In an unusual move, the committee required Mr. Miller to swear an oath of truthfulness before he testified. That’s because lawmakers said he and other IRS officials misled them during previous inquiries about whether Tea Party groups were targeted for extra scrutiny.

Mr. Miller denied that, saying he truthfully answered all the questions he had been asked.

Meanwhile, J. Russell George, the Treasury Department’s inspector general for tax administration, testified that an audit he conducted turned up no evidence that the IRS practices were politically motivated.

Rather, he said the audit “raised troubling questions over whether the IRS has effective management, oversight, and control … so that the public can be assured that the IRS is impartial in administering the nation’s laws fairly.”

His report found that the IRS office in Cincinnati targeted specific groups, delayed the processing of their applications, and subjected them to extra scrutiny between 2010 and 2011, hindering their fund-raising efforts in two election cycles.

Mr. Miller said conservative groups weren’t the only ones to undergo additional scrutiny, although his testimony did not specify any other kinds of groups singled out.

Mr. George’s report found that 296 applications had been singled out for extra review. Ultimately 180 were approved, 28 were withdrawn, 160 remain open, and none was denied tax-exempt status.

Some Democrats on the committee attributed the problems partially to understaffing, human error, and to a lack of clear guidance on 501(c)4 qualifying status. Unlike 501(c)3 groups, 501(c)4 organizations are allowed to participate in politics as long as that is not their primary activity. It’s up to IRS examiners to determine whether they cross the line.

Ousted IRS chief Steven Miller, center, arrives on Capitol Hill for the hearing on the IRS's targeting of applicants for tax-exempt status based on political leanings. Ousted IRS chief Steven Miller, center, arrives on Capitol Hill for the hearing on the IRS's targeting of applicants for tax-exempt status based on political leanings.
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“The law is not clear and people have to make judgments,” said Rep. Jim McDermott (D., Wash.). “There is a difference in my mind between stupid mistakes and malicious mistakes,” he said. “Examiners took a shortcut which they clearly regret, deeply regret.”

Republicans, meanwhile, used their time to blast Mr. Miller and say his response to the scandal has been offensive.

“In my private experience, you would have been fired on the spot,” Rep. Tom Reed (R., N.Y.) said. “All you were allowed to do was resign and retire? … Nothing bad is going to happen to you. You’re going to get your full benefits. You’re going to get everything that’s associated with your retirement as an IRS employee,” he said to Mr. Miller.

Other Republicans fired questions more quickly than Mr. Miller could answer then.

“If you think it’s uncomfortable sitting over there, you ought to be a private individual when the IRS is across from you questioning you,” Mr. Kelly said. “It’s terror.”

The Senate Finance Committee will get an opportunity to question IRS and Treasury officials at a similar hearing Tuesday.

The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Tracie Mauriello is Washington bureau chief for the Post-Gazette.

Contact Tracie Mauriello at: tmauriello@post-gazette.com, or 703-996-9292.



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