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Holder launches probe into IRS targeting of Tea Party groups

 

Attorney General Eric Holder said Tuesday that he's ordered a Justice Department probe into an IRS program that singled out Tea Party and other conservative groups for additional scrutiny in their applications for tax-exempt status. 

Holder announced the investigation during a press conference in Washington. He said the FBI was coordinating with the Department of Justice to see if any laws were broken. He called the practice "outrageous and unacceptable," echoing remarks from President Obama a day earlier. 

The probe comes as newly obtained documents show the current IRS chief knew about the agency's targeting of Tea Party groups as early as May 2012 and other officials in Washington were clued in more than a year before that. 

The additional details were provided in a timeline from the office of Sen. Orrin Hatch, R-Utah, based on briefings by the inspector general's office investigating the case. Together, they challenged the agency's initial claims that the practice of flagging conservative groups for additional scrutiny was contained to low-level staffers at a Cincinnati office. 

The timeline shows that Steven Miller, the acting IRS chief who at the time was a deputy commissioner, was briefed on the practice on May 3, 2012. Despite this briefing, Miller wrote letters to members of Congress at least twice to explain the process of reviewing applications for tax-exempt status without disclosing that Tea Party groups had been targeted. On July 25, 2012, Miller testified before the House Ways and Means oversight subcommittee, but again did not mention the additional scrutiny -- despite being asked about it. 

House Ways and Means Committee Chairman Dave Camp, R-Mich., blasted Miller over the revelation. 

"It is almost inconceivable to imagine that top officials at the IRS knew conservative groups were being targeted but chose to willfully mislead the Committee's investigation into this practice," he said in a statement. 

Further, the timeline shows that managers, after compiling a list of Tea Party and other cases, decided to send their report "up the chain in Washington" in April 2010. The timeline says this report was shared with two executives in Washington, including Lois G. Lerner. Lerner heads the IRS division that oversees tax-exempt organizations and is the official who first revealed the controversial practice on Friday. 

The timeline suggests she knew about the practice even earlier than previously thought. Further, it suggests other Washington officials were aware early on. Meanwhile, The Washington Post reported that IRS officials at the D.C. headquarters were sending inquiries to conservative groups on their donors, and in at least one case an application came under review in Washington. 

Miller's actions are sure to come under increased scrutiny. 

At the June hearing, Rep. Kenny Marchant, R-Texas, told Miller that some politically active tax-exempt groups in his district had complained about being harassed. Marchant did not explicitly ask if tea party groups were being targeted. But he did ask how applications were handled. 

Miller responded, "We did group those organizations together to ensure consistency, to ensure quality. We continue to work those cases," according to a transcript on the committee's website. 

Earlier, Rep. Charles Boustany, R-La., had raised concerns with the IRS about complaints that tea party groups were being harassed. Boustany specifically mentioned tea party groups in his inquiry. 

But in a June 15, 2012, letter to Boustany, Miller said that when the IRS saw an increase in applications from groups that were involved in political activity, the agency "took steps to coordinate the handling of the case to ensure consistency." 

He added that agents worked with tax law experts "to develop approaches and materials that could be helpful to the agents working the cases." 

Miller did not mention that in 2011, those materials included a list of words to watch for, such as "tea party" and "patriot." He also didn't disclose that in January 2012, the criteria for additional screening was updated to include references to the Constitution or the Bill of Rights. 

The House Ways and Means Committee, chaired by Camp, is holding a hearing on the issue Friday and Miller is scheduled to testify. 

The Senate Finance Committee announced Monday that it will join a growing list of congressional committees investigating the matter. 

The IRS apologized Friday for what it acknowledged was "inappropriate" targeting of conservative political groups during the 2012 election to see whether they were violating their tax-exempt status. In some cases, the IRS acknowledged, agents inappropriately asked for lists of donors. 

The agency blamed low-level employees in a Cincinnati office, saying no high-level officials were aware. 

When members of Congress repeatedly raised concerns with the IRS about complaints that tea party groups were being harassed last year, a deputy IRS commissioner took the lead in assuring lawmakers that the additional scrutiny was a legitimate part of the screening process. 

That deputy commissioner was Miller, who is now the acting head of the agency. 

Camp and other members of the Ways and Means Committee sent at least four inquiries to the IRS, starting in June 2011. Hatch, the top Republican on the Senate Finance Committee, sent three inquiries. And Rep. Darrell Issa, R-Calif., chairman of the House oversight committee, sent at least one. 

"This was a targeting of the president's political enemies, effectively, and lies about it during the election year so that it wasn't discovered until afterwards," Issa said Tuesday on "CBS This Morning." The fact is this is the kind of investigation that has to be open and transparent to the American people." 

None of the responses they received from the IRS acknowledged that conservative groups had ever been targeted, including a response to Hatch dated Sept. 11, 2012 -- four months after Miller had been briefed. 

In several letters to members of Congress, Miller went into painstaking detail about how applications for tax-exempt status were screened. But he never mentioned that conservative groups were being targeted, even though people working under him knew as early as June 2011 that tea party groups were being targeted, according to an upcoming report by the agency's inspector general. 

The IRS issued a statement Monday saying that Miller had been briefed on May 3, 2012 "that some specific applications were improperly identified by name and sent to the (exempt organizations) centralized processing unit for further review." That was the unit in Cincinnati that handled the tea party applications. 

When Lerner responded to inquiries from the House oversight committee, she also didn't mention the fact that tea party groups had ever been targeted. Her responses included 45-page letters in May 2012 to Issa and to Rep. Jim Jordan, R-Ohio, who chairs a subcommittee. 

The Associated Press contributed to this report.