Democrats Find More Flaws in Inspector General Report on IRS Targeting

House Democrats on Friday intensified criticisms of the May inspector general report that triggered the scandal over political targeting by the Internal Revenue Service. They released more raw documents from 2010 that they say prove that more progressive groups than reported were included in the sorting lists used by a Cincinnati-based unit in processing applications for tax-exempt benefits primarily from conservatives.

Democrats on the tax-writing and oversight panels also renewed calls for new testimony from Treasury Inspector General for Tax Administration J. Russell George, to explain the omissions, as Republican chairmen prepared to hold a new hearing on the IRS controversy next Thursday.

“This new information underscores the fact that the Treasury Inspector General’s audit was fundamentally flawed and created widespread misperceptions that Republicans seized on in an effort to attack the White House,” said Rep. Sander Levin, D-Mich., ranking member on the House Ways and Means Committee.

“It is now clear that screeners were instructed, in a 2010 PowerPoint presentation using images of a donkey and an elephant, to look for the term ‘progressive’ alongside ‘tea party’ in reviewing tax-exemption applications,” Levin said. “This directly contradicts the inspector general's statement on June 26, 2013, that ‘We did not find any evidence that the criteria you identified labeled ‘Progressives’ were used by the IRS to select potential political cases during the 2010 to 2012 timeframe we audited.’ “

Rep. Elijah Cummings, D-Md., ranking member of the Oversight and Government Reform Committee, on Friday released a letter he’d sent to panel chairman Rep. Darrell Issa, R-Calif., asking for TIGTA to be called back as a witness. A review of 5,500 internal IRS emails, the letter said, “indicated the organizations needed to be pulled because the IRS employees were not sure how to process them, not because they wanted to stall or hinder the application. There was no indication that pulling these selected applications was politically motivated. The email traffic indicated there were unclear processing directions and the group wanted to make sure they had guidance on processing the applications so they pulled them. This is a very important nuance.”

New testimony from George, Cummings continued, is needed to clear up why the auditors framed the procedural mistakes as targeting conservative groups when the documents show the IRS unit in 2012 had added a new “Be on the Lookout” entry for the so-called Occupy protest groups generally considered to be leftist. Recent explanations from George stated that references to progressive groups were strictly “historical.” Cummings also wants to ask auditors why they had not mentioned that IRS managers had directed the applications from Occupy groups to the same IRS unit handling the Tea Party groups’ applications.

Cummings criticized his chairman for running an “investigation characterized by one-sided and partial information leading to unsubstantiated accusations with no basis in fact. You did not consult with me before asking Mr. George to undertake his review, and Mr. George did not provide me with copies of his subsequent correspondence with you. In addition, Democratic staff were not invited to meetings your staff had with Mr. George’s staff to discuss the scope of his work.”

The oversight committee on Wednesday released a statement announcing a hearing titled, “The IRS’ Systematic Delay and Scrutiny of Tea Party Applications.” The witness list is still being determined, though it will include IRS officials from Washington and Cincinnati offices, a release said. An Issa spokesman told Government Executive the committee is still reviewing the Cummings letter calling on TIGTA to again testify, and a Ways and Means Committee spokeswoman also said no decision has been made.

“Washington and Cincinnati IRS officials have told committee investigators that they understood Tea Party applications were being isolated from other cases and subjected to extra scrutiny to ensure fair, efficient, and consistent treatment,” Issa said in a statement. “While President Obama has already dismissed the head of the IRS in the wake of this scandal, this hearing will examine why decisions to elevate cases to more senior levels of the IRS led to unjust delays and unfair treatment of Tea Party applications.

“The evidence gathered in this investigation makes clear that had Washington IRS officials simply kept their hands off these cases and allowed employees in the Cincinnati office to process applications independently, instead of facing excessive delays, these cases would have been processed just like other advocacy cases.”