New tax chief Werfel pledges to correct 'serious problems' at IRS

The new acting IRS chief stressed Monday that he was pressing ahead to fix the problems that allowed the agency to target conservative groups, saying the current controversies had sparked a difficult time at the IRS.

Danny Werfel, in his first testimony on Capitol Hill, also stressed that the current controversy shouldn’t be used to tar the entire agency.

Werfel, who has been acting commissioner for less than two weeks, told a House Appropriations subcommittee Monday that the singling out of Tea Party groups seeking tax-exempt status was inexcusable.

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“We have a great deal of work ahead of us to review and correct the serious problems that have occurred at the IRS and continue the important work of the agency on behalf of taxpayers,” Werfel said in prepared remarks for his first congressional appearance in his new role.

The new acting chief is in the midst of a 30-day, top-to-bottom review of the IRS, undertaken at the request of Treasury Secretary Jack Lew.

In his testimony, Werfel said that review would deal with far more than just how the agency handles tax-exempt applications, and look at how broader IRS operations could be improved.

“We owe it to the American public to use this moment as an opportunity to take a hard look internally at the IRS and see where other deficiencies or risks may exits, and take action to address them,” he said.

Werfel also made clear that he believes the vast majority of IRS staffers are also disappointed in the recent controversies swirling around the agency.

“Like so many, the IRS community is shocked and appalled at the use of political labels inside one part of the organization, and considers it to be an affront to the mission of the IRS and their solemn duty as civil servants to fairly administer our tax laws,” Werfel said in his prepared remarks.

Top appropriators made clear that the IRS's budget is going to face heavy scrutiny in the coming months, and may face tighter restrictions in exchange for government funding.

House Appropriations Committee Chairman Hal Rogers (R-Ky.) said the committee may look into placing conditions the IRS would have to meet to obtain its funding, calling the targeting tantamount to a political enemies list that hearkens back to “a dark page in our past.”

“We cannot in good conscience continue to provide hard earned taxpayer dollars to the IRS and have them use those funds to abuse the rights of American citizens,” said Rep. Ander Crenshaw (R-Fla.), the subcommittee chair.

Democrats offered little cover to the IRS, but also sought to broaden the scope of the inquiry to reach beyond the years of the Obama administration.

Rep. Jose Serrano (D-N.Y.) said any probe of the IRS targeting should extend back into the administration of President George W. Bush. He said the complaints Tea Party groups are raising about improper targeting for scrutiny echo those raised by groups that were opposed to the war in Iraq.

“This latest scandal is only the most recent one that we know about,” he said.

The acting IRS chief was joined at the hearing by Russell George, the Treasury inspector general who outlined the IRS’s targeting of conservative groups.

George, Treasury’s inspector general for tax administration, is expected to release a new report on Tuesday that outlines excessive spending at IRS conferences, which has opened up a new trouble spot for the IRS.

“It seems we have a new misstep every day at the IRS,” said Rogers, citing the conference spending. “I'm very troubled as to what might come to light next.”