Tea party storm largely inside IRS _ so far

Associated Press
IRS official Lois Lerner is sworn in on Capitol Hill in Washington, Wednesday, May 22, 2013, before the House Oversight Committee hearing to investigate the extra scrutiny IRS gave to Tea Party and other conservative groups that applied for tax-exempt status. Lerner told the committee she did nothing wrong and then invoked her constitutional right to not answer lawmakers' questions. (AP Photo/Carolyn Kaster)
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WASHINGTON (AP) — Three days of congressional hearings about the Internal Revenue Service's targeting of conservative political groups have lawmakers looking for ways to widen an investigation that has so far been largely contained within the tax collection agency.

More than 11 hours of testimony and an inspector general's report have revealed plenty of wrongdoing within the IRS. But so far, investigators have not produced evidence that anyone outside the IRS authorized the targeting, or even knew about it before a few weeks ago.

They will keep trying.

Three congressional committees are investigating the matter, and the leaders of those committees say they are just getting started. The Justice Department has launched a criminal investigation, and the new acting head of the IRS says he is conducting an internal review.

Congressional investigators have already started interviewing IRS employees, said Rep. Charles Boustany, R-La., chairman of the House Ways and Means oversight subcommittee. In the coming days, they plan to interview IRS workers in the Cincinnati office where agents singled out conservative political groups for additional scrutiny when they applied for tax-exempt status, Boustany said.

Expect more congressional hearings in June, he added.

On Thursday, the two leaders of the Senate Investigations subcommittee accused a key IRS official of misleading committee staff just a few days before it became public that agents had been targeting conservative groups.

Subcommittee Chairman Carl Levin, D-Mich., and the top Republican member, Arizona Sen. John McCain, called on the IRS to immediately suspend Lois Lerner from her job as director of the IRS division that handles applications for tax-exempt status.

Lerner is the IRS official who first publicly disclosed that matter at a legal conference on May 10. On April 30, committee staff interviewed Lerner and seven of her colleagues for six hours, the senators said in a letter to Danny Werfel, the new acting IRS commissioner.

"That interview covered, among other topics, how the IRS determines which groups to review, what actions are taken in connection with the IRS reviews, and how the laws and regulations are used to examine those groups," the senators wrote. "Ms. Lerner failed to disclose the internal controversy."

Lerner has denied doing anything wrong or misleading Congress.

The inspector general's report, which was released last week, said IRS agents in a Cincinnati office targeted tea party and other conservative groups for additional scrutiny when they applied for tax-exempt status. They started targeting these groups in March or April of 2010. By August 2010, "tea party" became part of a "be on the lookout," or "BOLO," list of terms to flag for additional screening.

Lerner learned in June 2011 that agents were singling out groups with "Tea Party" and "Patriots" in their applications for tax-exempt status, the report said. She ordered agents to scrap the criteria immediately, but later they evolved to include groups that promoted the Constitution and the Bill of Rights.

It finally stopped in May 2012, when top agency officials say they found out and ordered agents to adopt appropriate criteria for determining whether tax-exempt groups were overly political.

Former IRS Commissioner Douglas Shulman told two congressional committees this week that he first learned in the spring of 2012 that conservative groups had been improperly singled out for additional scrutiny. However, after learning that the practice had stopped and that the inspector general was investigating, Shulman said he didn't tell anyone in the Treasury Department or the White House about it. The IRS is part of the Treasury Department.

Shulman, who was appointed by President George W. Bush, left office in November, when his five-year term expired.

Lerner was subpoenaed to testify Wednesday before the House Oversight and Government Reform Committee. Her appearance was brief. She read an opening statement in which she denied any wrongdoing. Then she refused to answer questions, invoking her constitutional right against self-incrimination.

"I have not done anything wrong," Lerner said. "I have not broken any laws, I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee."

Committee Chairman Darrell Issa, R-Calif., said he might recall her. He and other Republicans say they believe she forfeited her Fifth Amendment privilege not to testify by giving an opening statement in which she proclaimed her innocence, but several law professors were skeptical lawmakers could make that stick.

Lerner, a career civil servant, is still in her position at the IRS.

J. Russell George, the Treasury Department inspector general for tax administration, has blamed ineffective management for allowing agents to improperly target conservative groups for so long.

On Wednesday, he hinted there may be more revelations to come. He told the oversight committee that his office has since uncovered other questionable criteria used by agents to screen applications for tax-exempt status. But he refused to elaborate.

"As we continue our review of this matter, we have recently identified some other BOLOs that raised concerns about political factors," George said. "I can't get into more detail at this time as to the information that is there because it's still incomplete."

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Associated Press writers Alan Fram and Julie Pace contributed to this report.

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