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US Congress committee grills ousted tax chief Steven Miller

world Updated: May 17, 2013 21:26 IST

AP
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US lawmakers questioned the ousted head of the internal revenue service as US Congress held its first hearing on the tougher scrutiny the federal tax agency gave tea party and other conservative groups that applied for tax-exempt status.

With the scandal joining the parade of political headaches buffeting President Barack Obama, a Republican-run congressional committee planned to question the agency's ousted chief, Steven Miller, on Friday.

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 the official who heads the IRS division that oversees tax-exempt groups acknowledged at a legal conference that conservative groups had been singled out, said it was wrong and apologised.

Even so, less than four months into his second term, the president has been on the defensive for the IRS controversy, along with questions about last September's attack in Benghazi, Libya, that killed the US ambassador and three other Americans, and the government's seizure of The Associated Press' telephone records as part of a leaks investigation.

Members of both parties have spent the past week bitterly chastising the agency for abandoning its charge of making nonpolitical decisions about which groups should qualify for tax-exempt status, which makes it easier for them to collect contributions from donors.

Miller, acting director until he resigned on Wednesday, got a hostile reception from the chairman of the House of Representatives Ways and Means Committee, who said the scandal seems to be part of a culture of cover-ups and political intimidation by the Obama administration.

Republican Dave Camp's remarks got a strong rebuke from the panel's top democrat, congressman Sander Levin, who warned that the hearing shouldn't be aimed at scoring points for election campaigns.

In a prepared statement, Miller said problems arose from a screening system agency workers set up to deal with a growing caseload of groups seeking tax-exempt status. Miller said it was not due to "any political or partisan viewpoint."

He said that the IRS has instituted new processes designed to prevent the problem from occurring again.

Lawmakers also have said that despite asking the IRS repeatedly about complaints from conservative groups that their applications were being treated unfairly, the agency - including Miller - never told them the groups were being targeted, even after May 2012, when the agency said Miller was briefed on the practice. Miller was previously a deputy commissioner whose portfolio included the unit that made decisions about tax-exempt status.

In one of the latest Republican attacks, Sen. Rob Portman wrote Obama on Thursday asking whether the White House or Treasury Department pressured the IRS on the treatment of conservative groups. In the letter, Portman accused the administration of "policies that threaten to chill disfavored political speech."

The inspector general's report said all IRS officials questioned said their actions "were not influenced by any individual or organisation outside the IRS."

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.

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.

Friday's hearing was just the start of Congress' probe of the IRS' actions, with the senate finance and house oversight committees planning hearings next week.

In addition, 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 on Thursday that the probes by Congress and the Justice Department would get to the bottom of who was responsible.

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

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

A report George issued this week concluded that the IRS office in a regional office that 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.