Hatch wonders about IRS discipline over political scrutiny

The Senate’s top tax writer asked Tuesday why the IRS has cleared most employees referred for potential improper political scrutiny since the agency’s Tea Party controversy erupted in 2013.

Finance Chairman Orrin HatchOrrin HatchTreasury officials to meet with lawmakers on inversion rules A bipartisan bright spot we can’t afford to pass up: child welfare reform Medicare trust fund running out of money fast MORE (R-Utah) noted that Treasury’s inspector general for tax administration had referred 47 employees to the IRS in recent years for potentially breaking the rules for reviewing tax-exempt applications.

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The inspector general sent those referrals when it thought an employee’s actions weren’t criminal, leaving any potential punishment up to the IRS.

But of those 47 referrals, the IRS found that 20 employees had done nothing wrong, and another five resigned during their investigations.

The IRS found another eight employees could face disciplinary action for future conduct, after the agency found “no clear” evidence of misconduct. Eleven referrals are still pending, while the rest of the 47 are protected by privacy laws.

In a Tuesday letter, Hatch asked for more details about how the IRS investigates those referrals and about any role the National Treasury Employees Union plays in those inquiries.

Hatch also pressed John Koskinen, the IRS commissioner, about the status of the 11 open investigations and what happens when an employee quits in the middle of an investigation.

“As chairman, I take special interest in the inspector general’s oversight and your agency’s response to its findings and referrals,” Hatch wrote.

In a statement, the IRS said that Hatch's letter showed "some misunderstanding and confusion" about referrals, and stressed that "the mere existence of a TIGTA referral does not necessarily mean there was a finding of inappropriate employee conduct."

"Each TIGTA referral is addressed by the IRS based on the particular facts, evidence and circumstances of the case. Some referrals may result in findings of wrongdoing and administrative punishment of the IRS employee, while others may result in clearing the IRS employee of any wrongdoing," the agency statement said.

The Finance chairman’s letter comes weeks after his committee released the findings of a multiyear investigation into the IRS’s improper scrutiny of Tea Party groups.

But even with all that time spent, Republicans and Democrats on the committee split over the key questions in the Tea Party controversy — including whether the groups were intentionally targeted for their political beliefs. 

This post was updated at 8:37 p.m.