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New IRS leader touts changes following scandal but reveals little

  • McClatchy Washington Bureau
  • Published Monday, June 24, 2013, at 3:54 p.m.
  • Updated Monday, Sep. 23, 2013, at 3:46 p.m.

— The temporary head of the Internal Revenue Service on Monday released a much anticipated but ultimately disappointing report on how the agency came to unfairly target tea party and other conservative organizations.

“The IRS is committed to correcting its mistakes,” Daniel Werfel, the temporary head of the IRS, said at the start of a briefing for reporters about his first 30 days on the job in the wake of a scandal over the extra scrutiny of conservative-leaning tax-exempt organizations.

Neither Werfel nor the report, “Charting a Path Forward at the IRS,” shed new light on how the criteria used to single out certain groups was developed or how right-to-life groups were told they’d win tax-exempt designations only if they agreed not to picket in front of Planned Parenthood offices.

That violation of First Amendment protections is arguably the more egregious wrongdoing by IRS officials, and neither congressional investigators nor Werfel have yet said how it happened.

To date, said Werfel, there is no evidence of any intentional wrongdoing by IRS officials.

“I am not providing a definite conclusion that no intentional wrongdoing occurred,” he said, “but no evidence has yet surfaced.”

The lack of detail didn’t impress Rep. Darrell Issa, R-Calif., who heads the House Committee on Oversight and Government Reform and who has pressed the IRS for details for more than a year.

After a year of investigation by the IRS and a Treasury Department inspector general, “unsurprisingly the completion of this third internal review fails to meaningfully answer the largest outstanding questions about inappropriate inquiries and indefensible delays,” Issa said.

Werfel’s contention that he had found no evidence that anyone at the agency did anything intentionally wrong “can only be called premature,” the lawmaker added.

During the telephone briefing, Werfel announced that he had uncovered more of the now-infamous BOLO lists – shorthand for “be on the lookout for” – and that he’d ordered them halted.

“We took immediate action to suspend the use of these lists,” said Werfel, named by Treasury Secretary Jack Lew to take over the agency after President Barack Obama fired the acting IRS commissioner, Steve Miller, on May 15.

Although Werfel would not discuss the content of the other BOLO lists, a document annexed in the report was more descriptive.

“They involved cases with potential terrorist connections, abusive transactions, fraud issues, emerging issues, coordinated processing and watch-out cases to allow for more consistent treatment of similarly situated taxpayers,” said a June 20 letter from Karen Schiller, the acting director of the Rulings and Agreements Exempt Organizations Office, temporarily halting the use of all watch lists.

The BOLO lists are at the heart of the controversy engulfing the IRS. Former agency leaders acknowledged the use of such a list to target groups that had “tea party” in their name, as well as names based on themes of the Founding Fathers, such as “constitution,” “Bill of Rights” and others.

Under questioning from reporters, Werfel said the agency would make public the other BOLO lists and many other IRS internal documents once confidential taxpayer information had properly been redacted.

The top Democrat on the House Ways and Means Committee, Michigan Rep. Sander Levin, late Monday released what he said was one of the new, redacted BOLO lists. He noted that BOLO lists were previously known to have included conservative organizations, but that “this is the first evidence, however, that the lists included ‘progressives’ as an identifier.” Levin added that he wants answers as to why this was not disclosed during the initial outcry.

In a statement, the White House called Werfel’s report “an important step in ensuring accountability.”

Asked directly about the fate of two big names in the scandal, Lois Lerner and Holly Paz, Werfel deflected the question.

“There are limitations imposed by the (federal) Privacy Act . . . that prevent me from commenting . . . with respect to a particular individual,” he said, stressing that all the people in top positions that involved elements of the IRS scandal have either resigned or been placed on leave. “There has been leadership replaced at every level.”

Lerner triggered the probe by trying to get ahead of a negative report from the Treasury Department’s inspector general by apologizing at a legal conference where she was asked a planted question by an IRS advisory committee member.

When later called to testify before Congress, she declared that she did nothing wrong and then invoked her Fifth Amendment right to remain silent. Werfel placed her on administrative leave.

Holly Paz worked for Lerner and was present, for reasons not entirely clear, when the Treasury Department’s inspector general for tax administration questioned IRS employees in Cincinnati about how the criteria now deemed inappropriate was developed.

Werfel, who announced an expedited approval process for tax-exempt organizations, is scheduled to appear Tuesday before the House Ways and Means Committee.

Email: khall@mcclatchydc.com, dlightman@mcclatchydc.com; Twitter: @KevinGHall, @Lightmandavid

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