Ousted IRS Commissioner: Two 'rogue' Cincinnati agents responsible for tea party scandal

CINCINNATI - Ousted Internal Revenue Service Commissioner Steven Miller said the agency pinpointed two "rogue" employees in the Cincinnati IRS office as being responsible for "overly aggressive" handling of tea party requests for tax-exempt status over the past two years, according to a CNN report.

According to CNN, Miller described the employees in a meeting on Capitol Hill and said they were "off the reservation."

CNN reports the staffers have already been disciplined.

Miller was ousted from his job Wednesday when Treasury Secretary Jacob Lew asked for his resignation. Miller is leaving in June.

There is speculation in Washington that Lori Lerner, head of the IRS division that oversees tax exempt organizations, could be next on the chopping block. Both Miller and Lerner knew about the goings-on in the Cincinnati IRS office for more than a year but didn't inform Congress.

As the investigation widens, House Speaker John Boehner says he has a question: "Who's going to jail over this scandal?"

"There are laws in place to prevent this type of abuse. Someone made a conscious decision to harass and to hold up these requests for tax exempt status," Boehner told reporters Wednesday after the
Justice Department announced it would conduct a criminal investigation.

One of the tea party groups whose application was help up more than three years by the IRS is located in Boehner's Ohio district.

"I think we need to know who they are and whether they violated the law. Clearly someone violated the law," Boehner said.

A Treasury Department Inspector General's probe concluded that lax management enabled Cincinnati agents to improperly target tea party groups for extra scrutiny when they applied for tax exempt status. The report lays much of the blame on IRS supervisors in Washington.

The report said that while their applications languished in the Cincinnati office, tea party groups were asked a host of inappropriate questions, including: Who are your donors? What are the political affiliations of officers? What issues are important to the organization, and what are your positions on those issues? Will any officers in the group run for public office? Where do you work?

You can read an example of an extra questionnaire some tea party members were sent from the IRS seeking more information about trying to obtain 501 C3 status below or at http://goo.gl/ph8mW.

The report does not indicate that Washington initiated the targeting of conservative groups. But it does say a top supervisor in Washington did not adequately supervise agents in the field even after she learned the agents were acting improperly.

"The report's findings are intolerable and inexcusable," President Barack Obama said in a statement. "The federal government must conduct itself in a way that's worthy of the public's trust, and that's especially true for the IRS. The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity. This report shows that some of its employees failed that test."

The Cincinnati IRS office employs more than 700 people working in 14 divisions from taxpayer assistance to Tax Exempt/Government Entities (TEGE). That's the division that handles applications for tax-exempt status.

Cincinnati TEGE workers started targeting groups with "Tea Party," `'Patriots" or "9/12 Project" in their applications for tax exempt status in March 2010, the inspector general's report said. By August 2010, it was part of the written criteria used to flag groups for additional scrutiny.

Lerner had been briefed on the matter in June 2011. She ordered the initial tea party criteria to be scrapped, but it later evolved to include groups that promoted the Constitution and the Bill of Rights. The practice was ended in May 2012, the report said.

IRS agents were trying to determine whether the political activities of such groups disqualified them for tax exempt status. These groups were claiming tax exempt status as organizations promoting social welfare. Unlike other charitable groups, they can engage in political activity. But politics cannot be their primary mission.

It is up to the IRS to make the determination.

But by using improper criteria, the IRS targeted some groups even though there were no indications that they engaged in significant political activities, the report said. Other non-tea party groups that had significant political activities were not screened, the report said.

"The criteria developed by the Determinations Unit (in Cincinnati) gives the appearance that the IRS is not impartial in conducting its mission," the report said.

"Unfortunately, the report raises more questions than it answers," said House Oversight Committee Chairman Darrell Issa, R-Calif. "What we do know for sure is that the IRS personnel responsible for granting tax exemptions systematically targeted conservative groups for extra scrutiny, and that officials in Washington, D.C., were aware of this practice, even while publicly claiming that it never happened."

Lerner on Friday apologized for singling out tea party and other conservative groups.

Associated Press reporter Andrew Miga contributed to this report.

You can read the Treasury inspector's general report on these incidents below or at http://goo.gl/o5mCN.


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