WASHINGTON (CBSDC/AP) — Two Internal Revenue Service
agents working in the agency’s Cincinnati office say higher-ups in
Washington directed the targeting of conservative political groups when
they applied for tax-exempt status, a contention that directly
contradicts claims made by the agency since the scandal erupted last
month.
The Cincinnati agents didn’t provide proof that senior IRS officials
in Washington ordered the targeting. But one of the agents said her work
processing the applications was closely supervised by a Washington
lawyer in the IRS division that handles applications for tax-exempt
status, according to a transcript of her interview with congressional
investigators.
Her interview suggests a long trail of emails that could support her claim.
The revelation could prove to be significant if investigators are
able to show that Washington officials were involved in singling out tea
party and other conservative groups for extra scrutiny. IRS officials
have said repeatedly that the targeting was initiated by front-line
agents in the Cincinnati office and was stopped once senior officials in
Washington found out.
A yearlong audit by the agency’s inspector general found no evidence
that Washington officials ordered or authorized the targeting. However,
the inspector general blamed ineffective management by senior IRS
officials for allowing the targeting to continue for nearly two years
during the 2010 and 2012 elections.
Since the revelations were made public last month, much of the
agency’s top leadership has been replaced. President Barack Obama forced
acting IRS Commissioner Steven Miller to resign, replacing him with
Danny Werfel, a former White House budget official who is conducting a
review of the agency’s operations.
Three congressional committees and the Justice Department are also
investigating. Investigators for the House Oversight and Government
Reform Committee and the House Ways and Means Committee have interviewed
at least four IRS workers as part of their probe.
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The Associated Press viewed transcripts of interviews with two IRS agents working in the Cincinnati office.
Gary Muthert, an IRS agent there, said his local supervisor told him
in March 2010 to check the applications for tax-exempt status to see how
many were from groups with “tea party” in their names. The supervisor’s
name was blacked out in the transcript.
“He told me that Washington, D.C., wanted some cases,” Muthert said of his supervisor.
Muthert said he came up with fewer than 10 applications. But after
checking some of the group’s websites, he noticed similar groups with
“patriots’ or “9-12 project” in their names, so he started looking for
applications that mentioned those terms too.
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Over a two-month period, Muthert said he found about 40 applications
that mentioned tea party, patriots or 9-12 project — the latter being
groups which aspire to reinstill a post-9/11 spirit of unity in the
country.
“I used ‘patriots’ because some of the tea partiers wouldn’t, they
would shorten their name to TP Patriots,” Muthert said. “I thought, OK, I
will use ‘patriot.’”
Muthert said his supervisor told him that someone in Washington
wanted to see seven of the applications, so Muthert prepared the files.
Whom did you send them to? An investigator asked.
“I don’t know,” Muthert answered.
Muthert did not respond to requests by the AP for comment.
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The IRS was screening the groups’ applications because agents were
trying to determine their level of political activity. IRS regulations
say tax-exempt social welfare organizations may engage in some political
activity but the activity may not be their primary mission. It is up to
the IRS to make that determination.
Elizabeth Hofacre, also an agent in the Cincinnati office, told
investigators she was in charge of processing applications from tea
party groups — once they were selected by other agents — from April 2010
to October 2010. Hofacre said her supervisor in Cincinnati, whose name
was blacked out in the transcript, told her to handle the applications.
But, she said, an IRS lawyer in Washington, Carter Hull, micromanaged
her work and ultimately delayed the processing of applications by tea
party groups.
Hull is a lawyer in the division that handles applications for
tax-exempt status. But, Hofacre said, his interest in the cases was
highly unusual.
“It was demeaning,” she said. “One of the criteria is to work
independently and do research and make decisions based on your
experience and education, whereas on this case, I had no autonomy at all
through the process.”
Hofacre said Hull signed off on letters she sent to the groups asking
them for additional information and then reviewed their responses.
Hofacre complained that Hull was slow to sign off on the letters.
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“All I remember saying and thinking is, ‘This is ridiculous.’ Because
at the same time, you are getting calls from irate taxpayers. And I see
their point,” Hofacre said.
Hofacre said she became so frustrated with the delays that she
applied for a different job within the agency and transferred in October
2010.
Neither Hofacre nor Hull responded to requests for comment.
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Associated Press contributed to this report.)
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