GOP probe finds 'culture of bias' at IRS

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IRS employees subverted the agency’s nonpartisan mission to further President Obama’s political goals, according to a new House GOP report that will be released Tuesday.

The report, from House Oversight Committee Chairman Darrell Issa (R-Calif.), seeks to undercut the administration’s explanations for the IRS’s improper scrutiny of Tea Party groups, including that the conduct was centered in a Cincinnati office and that confusing regulations played a role.

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While the 210-page report finds no evidence that Obama or White House officials ordered the special treatment of Tea Party groups, it says the record points to a “culture of bias against conservative organizations among certain IRS employees."

That bias, the report says, underscores that the IRS is no longer the neutral tax collector it claims to be, at a time when its employees are tasked with implementing Obama’s signature healthcare law.

“Evidence shows an IRS responsive to the partisan policy objectives of the White House and an IRS leadership that coordinates with political appointees of the Obama administration,” the report says. 

Issa says the IRS took cues from Obama’s criticism of the Supreme Court’s Citizens United decision, which gave corporations and unions freer rein to spend on elections.

“The rhetoric led the IRS to hold a deeply skeptical view of the merits of applications filed by new conservative groups,” the GOP report says. 

The report also says that as many as eight senior IRS officials could have stopped the improper scrutiny — which lasted for over two years — but the agency was frozen by “bad judgment, inexperience, and bureaucratic rigidity.”

The Oversight panel has yet to conclude its probe into the IRS’s handling of applications from Tea Party groups. But Issa is handing over the Oversight gavel to Rep. Jason ChaffetzJason ChaffetzFive memorable moments from Hillary Clinton’s newest book Clinton says she mistook Chaffetz for Priebus at Trump's inauguration Curtis wins GOP primary for House seat vacated by Jason Chaffetz MORE (R-Utah) in January, and decided to circulate a report laying out where the committee’s investigation stands.

Lois Lerner, a now former IRS official, started the controversy in May 2013 by acknowledging that the agency had singled out conservative organizations. Shortly thereafter, a Treasury inspector general report found that groups with “Tea Party,” “patriot” or “9/12” seeking tax-exempt status received extra scrutiny from the IRS.

Several senior IRS officials — including the acting commissioner, Steven Miller — lost their jobs over the practices, which Obama labeled “inexcusable.” The House eventually held Lerner, who quickly became the central figure in the investigation, in contempt of Congress, and Republicans referred her to the Justice Department for potential prosecution. 

The report says that the Oversight Committee’s investigation will continue, noting that Treasury’s inspector general for tax administration recently said it might have uncovered thousands of Lerner’s emails previously thought to be lost. Issa also charges that both the IRS and the Obama administration haven’t been particularly willing to help the GOP investigation.

Both the Obama administration and Democratic lawmakers receive their fair share of criticism in the report. In addition to knocking Obama for setting a tone that fostered the IRS’s actions, it calls out the president for saying there was “not even a smidgeon of corruption” in the case. 

It then criticizes Justice Department for failing to appoint a special prosecutor to investigate the improper scrutiny, and labels the Treasury Department “the IRS’s absentee parental agency.” 

Rep. Elijah Cummings (Md.), the top Democrat on the Oversight Committee, criticized Issa for giving the report to the media before the rest of the panel. A spokeswoman said Cummings couldn’t comment on the substance of the report because he hasn’t seen it.

Democrats have previously said that hundreds of thousands of pages of documents have found no evidence that the IRS’s actions were politically motivated, or that the White House was involved.

“It is revealing that the Republicans — yet again — are leaking cherry-picked excerpts of documents to support their preconceived political narrative without allowing committee members to even see their conclusions or vote on them first,” Cummings said.

The Treasury Department has said that there's no evidence it was involved in the screening of tax-exempt groups.

"It is a long-standing practice, spanning administrations of both parties, for Treasury not to be involved in the details of tax administration, particularly regarding the applications of individual taxpayers," a spokeswoman said.

The IRS didn't offer a comment on the report. But John Koskinen, the IRS commissioner, has said in the past that wants Congress to release the results of their investigations to allow the agency to move forward.

The congressional investigations into the IRS lost some steam over the last year, after finding no direct ties to the White House. But Republicans remain furious with the IRS, and lawmakers just slashed the agency’s budget for a fifth consecutive year.

The GOP is also waiting for the administration to release new rules governing tax-exempt groups, after oppositions from conservatives and some liberal groups dashed Treasury's first effort last year.

Issa’s report raises questions about how Miller and the previous IRS commissioner, Douglas Shulman, handled the controversy. Both senior agency officials weren’t as forthcoming as they could have been with lawmakers in 2012, and the report particularly singles out Shulman for assuring lawmakers that “there is absolutely no targeting.”

Lerner and other top officials dealing with tax-exempt groups, like Holly Paz, suggested they were reluctant to approve the conservative groups applying, according to emails released in the report.

But the issues at the agency, Issa maintains, are also spread out through the rank and file. One revenue agent from Cincinnati, the report says, distinguished between tax-exempt groups that concentrate on the poor and the limited government groups.

"This sounds like a bad org," another agent wrote about an applicant in an email. "This org gives me an icky feeling." 

Most Tea Party groups who applied to the IRS sought 501(c)(4) status, meant for groups whose primary purpose is promoting social welfare. 

“On one level, there is nothing wrong with career federal employees holding strong political beliefs so long as these beliefs play no role in their work at an apolitical federal agency,” Issa’s report says. 

“But when political beliefs affect work, and these political beliefs align with those being openly and loudly espoused by the president of the United States and his political allies, there is at minimum a correlation.”