Domestic Taxes

Cincinnati IRS staffer: D.C. showed interest in Tea Party cases

An IRS staffer in Cincinnati told congressional investigators that a Washington official was the driving force behind the targeting of Tea Party organizations in 2010, and showed unprecedented interest in those groups’ tax-exempt applications.

Elizabeth Hofacre, the Cincinnati staffer, said that she started receiving applications from Tea Party groups to sift through in April, 2010. Hofacre’s handling of those cases, she said, was highly influenced by Carter Hull, an IRS lawyer in Washington.

Hofacre said that she integrated questions from Hull into her follow-ups with Tea Party groups, and that Hull had to approve the letters seeking more information that she sent out to those organizations. That process, she said, was both unusual and “demeaning.”

“One of the criteria is to work independently and do research and make decisions based on your experience and education,” Hofacre said, according to transcripts reviewed by The Hill. “Whereas in this case, I had no autonomy at all through the process.”

“I thought it was over the top,” she added, in interviews held by investigators in both parties from the House Oversight and Ways and Means committees. “I am not sure where it came from, but it was a bit unusual.”

{mosads}Hofacre, who oversaw Tea Party applications from April, 2010, to October, 2010, said Hull eventually became slow to endorse her letters. She eventually took another position within the IRS that year, after dealing with what she called “irate” applicants.

“And I see their point,” Hofacre said. “Even if a decision isn’t favorable, they deserve some kind of treatment and they deserve, you know, timeliness.”

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The investigators’ interviews with Hofacre and another Cincinnati staffer, Gary Muthert, cast some doubt on statements from the former acting IRS commissioner, Steven Miller, and other agency officials that the targeting of Tea Party groups was limited to Cincinnati.

They also show the tension that developed between officials in Cincinnati and Washington, especially after Lois Lerner – the D.C.-based director at the center of the targeting storm – placed the responsibility for the singling out on the Ohio office. Lerner was the IRS official who first disclosed, and apologized for, the targeting.

Hofacre told investigators that officials trying to blame the Cincinnati office were misleading the public on purpose.

“I was appalled and I was infuriated,” Hofacre said. “Because they are inaccurate, and everybody that has been making those statements should know they are inaccurate.”

Still, the interviews also contain few answers on who exactly ordered the targeting, and contain no suggestions that White House or Treasury officials – or even the top IRS brass – knew about the extra scrutiny.

Treasury’s inspector general for tax administration found that the IRS inappropriately screened for Tea Party groups seeking tax-exempt status, asked them inappropriate questions and kept some waiting for years for a verdict.

In addition to the congressional inquest, the tax administration inspector general is further investigating the targeting, as is the Justice Department.

The controversy swirling around the IRS has also only grown since the inspector general’s report came out almost a month ago, with a separate audit finding that the agency spent more than $4 million on a single conference in 2010.

Muthert told investigators that he started collecting Tea Party applications in March, 2010, and eventually sent seven cases to Washington after hearing officials there had shown an interest in those applications.

The number of cases he found ultimately grew from less than 10 to roughly 40, after broadening his search beyond “Tea Party” to include “patriots” and “9/12.”

Hofacre, the Cincinnati staffer charged with dealing with the Tea Party applications after they were found, said the 20 cases she was originally given mushroomed into 40 to 60.

Hofacre’s Ohio-based supervisor directed her to deal with the Tea Party cases. But it was unusual, Hofacre told investigators, for one agent to have such exclusive oversight of applications from one type of organization.

The Cincinnati staffer also said that the letters she sent to follow up with Tea Party groups asked for information about the groups’ rallies, emails and web sites.

Those questions, developed after her consultations with Hull, were pretty standard, Hofacre said.

But Hofacre added that she found one request from Washington – that they press groups for information on contracts they might have in the future – to be odd.

She also said that some requests she suggested came after she stopped working Tea Party cases in 2010 – like for donor lists – were “appalling.”

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