New details emerge in IRS targeting scandal

WASHINGTON—It’s been a little more than two years since a Treasury Department Inspector General report found the Internal Revenue Service used “inappropriate criteria” to target conservative nonprofit groups for extra scrutiny.

“It’s inexcusable, and Americans are right to be angry about it, and I’m angry about it,” said President Barack Obama in a statement issued May 15, 2013, the day after the report. “I’ll do everything in my power to make sure that nothing like this ever happens again.”

The investigation into what happened and who is responsible has unfolded slowly, but lost amid ISIS, presidential campaigns, and international crises, congressional probes continue to uncover new information. This week, during a House Oversight and Government Reform Committee hearing, Republican lawmakers honed in on an IRS official’s disclosure that the agency established a “special project team” to handle all information requests related to the targeting issue.

Republicans were instantly suspicious because the arrangement apparently involved the IRS chief counsel and acting commissioner—the only two political appointees at the agency. Mary Howard, IRS director of privacy, governmental liaison, and disclosure, said the team included hundreds of attorneys assigned to gather information for both congressional and public inquiries.

Howard told lawmakers the special team was set up because of the volume of requests: “It was a business reason.”

Rep. Jim Jordan, R-Ohio, who has taken a lead on investigating the targeting, said it could be just as Howard said, but “obviously I’m suspicious based on the track record. “

“If the acting commissioner [Danny Werfel], the guy the Obama administration hand-picked to come in and clean all this up, if he's reviewing all this, that's noteworthy,” Jordan told me after the hearing. “Were there times they were going to send something out, and the person who typically handles requests said, ‘Yeah, we can send it out,’ then someone who was part of this special team says, ‘No, you have to redact more than that’?”

According to Howard, 34 document requests submitted to the IRS in the wake of the IG report remain unfulfilled, although the special project team has ceased operation.

Jordan said Howard’s testimony raised many new questions the committee decided to formally ask the IRS in a letter sent today.

One area of focus is an April 15, 2009, memo from the White House chief counsel to all chief counsels at federal government agencies, including the IRS. The memo directed agencies to send through the White House any information requests that included White House “equities.”

Howard testified she was “amazed” to see the memo but “ignored it.” She said it’s “likely” the IRS chief counsel also ignored it and didn’t send documents to the White House for approval. Democrats said the memo is not unlike directives from previous administrations and specifically cited one from the Reagan administration.

More pieces of the targeting scandal may fall soon. After the IRS last June informed Congress it had lost thousands of emails belonging to IRS official Lois Lerner—thought to be the lynchpin of the investigation—an inspector general recovered some 6,400 messages from between 2004 and 2013. The House Ways and Means Committee and Senate Finance Committee received the emails in April.

The two-year-old controversy involves conservative groups who were singled out for extra scrutiny when they applied for 501(c)4 nonprofit status. The Government Accountability Office is currently studying whether the IRS also singled out existing conservative nonprofit groups through the auditing process. Jordan said lawmakers anticipate a report in the near future.