State of Play: Where the IRS Case Stands After 3 Hearings

Three IRS hearings are in the books. Two senior IRS officials are on their way out. And one key witness has invoked the Fifth Amendment. 

Round one of the IRS scandal hearings is now complete.

Despite the flurry of activity, some of the most basic details in the case remain foggy, including how exactly the targeting began, who began it, and how it was allowed to continue for so long. Both Democrats and Republicans want answers to those questions.

And after more than a dozen hours of often contentious testimony, Republicans have yet to tie the targeting of tea party groups for extra scrutiny to President Obama and the White House. 

J. Russell George, the Treasury inspector general for tax administration, has repeatedly emphasized that his findings of disparate treatment for conservative groups were part of an audit, not a full-fledged investigation. Congress appears more than ready to pick up the baton.

“We need more hearings. We need more investigations. We need to get to the bottom of this,” said Rep. Thomas Massie, R-Ky., on Wednesday.

Here are the story lines to follow next:

*Will Lois Lerner be forced back before Congress?

Lerner led the tax-exempt division of the IRS where the targeting took place and she has been the subject of some of the strongest bipartisan criticism coming from Capitol Hill. 

Lerner invoked the Fifth Amendment right not to testify on Wednesday, but before she did she declared: “I have not done anything wrong. I have not broken any laws. I have not violated any IRS rules and regulations, and I have not provided false information to this or any other congressional committee.”

Rep. Trey Gowdy, a Republican lawyer from South Carolina, quickly objected, saying she couldn’t say her piece and then decline to answer questions. By the end the six-hour hearing, House Oversight and Government Reform Chairman Darrell Issa, R-Calif., said he was “looking into the possibility of recalling her,” saying she may have abridged her right not to answer questions.

*Documents, documents, documents

The House Ways and Means, House Oversight and Government Reform, and Senate Finance Committees have each demanded additional documents and information from the IRS. The Finance Committee, in fact, made 41 separate line-item requests, including some that would significantly broaden the current inquiry.

Each panel has set different deadlines for the IRS to comply (Senate Finance said May 31). What they get back will fuel the next round of hearings.

*Can Republicans tie it to Obama?

So far, the answer is no. In his opening statement Wednesday, Issa dismissed the line of reasoning that the IRS is an independent agency. It’s part of the executive branch and, he noted, the tax commissioner “is a subordinate of a cabinet officer.” But there are only two political appointees in the sprawling agency and, while the White House has fumbled in answering exactly who knew what in April and May of this year, no evidence has emerged yet to show the administration knew the breadth of the targeting was occurring before they were informed by the auditor.

*Will Republicans overreach?

The GOP leadership is concerned about the image of blood-thirsty Republicans clawing at the White House. On Wednesday, Rep. Cynthia Lummis, R-Wyo., declared, "This is far worse than anything we've seen in Watergate.” Rep. Michele Bachmann, R-Minn., has gone on about impeachment. As congressional investigators begin to dig in, Republican leaders don’t want the party’s loudest and brashest voices to get ahead of the facts.

*What does it mean for tax reform?

Two of the committees with jurisdiction over the IRS – Senate Finance and House Ways and Means – also have chairmen dedicated to pursuing a rewrite of the tax code this year. Both have said they believe the targeting scandal only makes their case stronger. But it’s not clear that is how it will play out – especially if the investigations dominate precious staff time.

*Will another shoe drop?

George, the inspector general, has said that the initial audit into the tax-exempt division has spurred new lines of inquiry. “As a result of the work that was conducted in preparation of this audit, we have uncovered areas that need further review,” he told National Journal. Those include, he told Senate Finance, looking into 501(c)(4)s that have played in the political arena. “Suffice it to say, this matter is not over,” George told senators.

CORRECTION: In an earlier version of this article, the first name of Rep. Michele Bachmann, R-Minn., was misspelled.

CORRECTION: In an earlier version of this article, the first name of Rep. Michele Bachmann, R-Minn., was misspelled.