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Tuesday July 7th, 2015 1:38PM

House chairman sees IRS errors as part of pattern

By The Associated Press
WASHINGTON (AP) -- The Internal Revenue Service's improper use of tougher scrutiny of conservative groups seeking tax-exempt status seems part of a broader pattern of intimidation and cover-ups by the Obama administration, a top House Republican said Friday.

The House Ways and Means Committee, led by Rep. Dave Camp, R-Mich., held the first congressional hearing into the tax agency's improper targeting of tea party and other conservative groups.

The just-ousted acting chief of the IRS, Steven Miller, expressed regret for the heightened reviews.

"I want to apologize on behalf of the Internal Revenue Service for the mistakes that we made and the poor service we provided," Miller told the committee.

"The affected organizations and the American public deserve better. Partisanship and even the perception of partisanship has no place at the Internal Revenue Service."

Camp referred to a "culture of cover-ups and intimidation in this administration," but offered no other examples.

The administration has been forced on the defensive about last September's terrorist attack in Benghazi, Libya, that killed the U.S. ambassador and three other Americans, and the government's seizure of The Associated Press' telephone records as part of a leaks investigation.

Republicans are hoping to link the issues in an effort to raise questions about President Barack Obama's credibility and make it harder for him to press a second-term agenda.

Camp's remark drew a sharp retort from the committee's top Democrat, Rep. Sander Levin of Michigan. Levin said if the hearing became a preview of the 2014 political campaigns, "we'll be making a very, very serious mistake."

Even so, Levin also was harshly critical of the IRS's treatment of conservative groups. He said Lois Lerner, who heads the IRS division that makes decisions about tax-exempt groups, should be "relieved of her duties."

Though Miller and another top IRS official are stepping down, Camp said that would not be enough.

"The reality is this is not a personnel problem. This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers," Camp said.

Miller said the IRS struggled to efficiently handle growing numbers of applications for tax-exempt status, and that political bias was not the reason for the increased scrutiny.

Lawmakers had asked the IRS repeatedly about complaints from conservative groups that their applications were being treated unfairly, but said Miller and others never told them the groups were being targeted.

Members of Congress said this continued even after May 2012, when the agency says Miller was briefed on the practice. Miller was previously a deputy commissioner whose portfolio included the unit that made decisions about tax-exempt status.

Also testifying Friday was J. Russell George, the Treasury Department's inspector general for tax administration.

In a report he issued this past week, IRS officials said they were not politically pressured to target conservative groups. George is continuing to investigate that question.

George's report concluded that the IRS office in Cincinnati, which screened applications for the tax exemptions, improperly singled out tea party and other conservative groups for tougher treatment. The report says the practice began in March 2010 and lasted more than 18 months.

The report blamed "ineffective management" for letting IRS officials craft "inappropriate criteria" to review applications from tea party and other conservative groups, based on their names or political views. It found that the IRS took no action on many of the conservative groups' applications for tax-exempt status for long periods of time, hindering their fundraising for the 2010 and 2012 elections.

Republicans have spent the past few days trying to link the IRS' improper scrutiny of conservatives to Obama. The president has said he didn't know about the targeting until last Friday, when Lerner acknowledged at a legal conference that conservative groups had been singled out.

"I promise you this, that the minute I found out about it, then my main focus was making sure that we get the thing fixed," Obama said Thursday.

Many of the groups were applying for tax-exempt status as social welfare organizations, which are allowed to participate in campaign activity if that is not their primary activity. The IRS judges whether that imprecise standard is met.

Attorney General Eric Holder has said the FBI was investigating whether the IRS may have violated applicants' civil rights.

Obama has rejected the idea of naming a special prosecutor to investigate the episode, saying the investigations by Congress and the Justice Department were sufficient.

Obama has named Daniel Werfel, a top White House budget officer, to replace Miller.

Also Thursday, Joseph Grant, one of Miller's top deputies, announced plans to retire June 3, according to an internal IRS memo. Grant is commissioner of the agency's tax exempt and government entities division, which includes the agents that targeted tea party groups for additional scrutiny.

Grant joined the IRS in 2005 and took over as acting commissioner of the tax exempt and government entities division in December 2010. He was just named the permanent commissioner May 8.

When asked whether Grant was pressured to leave, IRS spokeswoman Michelle Eldridge said Grant had more than 31 years of federal service and it was his personal decision to leave.

Grant's predecessor at the IRS was Sarah Hall Ingram, who is now director of the agency's Affordable Care Act Office. Ingram was in charge of the tax exempt division when IRS agents first started targeting conservative groups.

The IRS said Ingram was assigned to help the agency implement the health care law in December 2010, about six months before the Treasury inspector general's report said her subordinate, the director of exempt organizations, learned about the targeting.
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