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FBI, Justice Dept. investigating IRS audits

By Stephen Ohlemacher

Associated Press

LAST UPDATED: 10:02 a.m. HST, May 14, 2013

WASHINGTON » The Justice Department is opening a criminal investigation into the Internal Revenue Service's targeting of tea party groups for extra scrutiny over whether they qualified for tax exempt status, Attorney General Eric Holder announced today.

Holder said the FBI is coordinating with the Department of Justice to see if any laws were broken.

At a news conference today, Holder called the practice, "outrageous and unacceptable."

Numerous congressional committees already are investigating the IRS for singling out tea party and other conservative groups during the 2010 congressional elections and the 2012 presidential election. But Holder's announcement takes the matter to another level, if investigators are able to prove that laws were broken.

Holder's comments came a day after President Barack Obama said that if the agency intentionally targeted such groups, "that's outrageous and there's no place for it."

Steven Miller, the IRS acting chief, acknowledged "a lack of sensitivity" in the agency's screenings of political groups seeking tax-exempt status and insisted those mistakes won't be repeated.

The IRS apologized Friday for what it acknowledged was "inappropriate" targeting of conservative political groups. The IRS admission was made at an American Bar Association conference.

The agency started targeting groups with "Tea Party," ''Patriots" or "9/12 Project" in their applications in March 2010. The criteria later evolved to include groups that promoted the Constitution and the Bill of Rights. The practice ended in May 2012, according to a draft of an upcoming report by the Treasury inspector general for tax administration.

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.

Miller has emerged as a key figure in the controversy. In his first public comment on the case, Miller said there was "a shortcut taken in our processes" for determining which groups needed special screening.

In an opinion piece in today's editions of USA Today, Miller conceded that the agency demonstrated "a lack of sensitivity to the implications of some of the decisions that were made." He said screening of advocacy groups is "factually complex, and it's challenging to separate out political issues from those involving education or social welfare."

"The mistakes we made were due to the absence of a sufficient process for working the increase in cases and a lack of sensitivity to the implications of some of the decisions that were made," Miller wrote.

Miller said the agency has implemented new procedures that will "ensure the mistakes won't be repeated."

On Monday, the IRS said Miller was first informed on May, 3, 2012, that applications for tax-exempt status by tea party groups were inappropriately singled out for extra scrutiny.

At least twice after the briefing, Miller wrote letters to members of Congress 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.

Miller's op-ed did not address why he did not inform Congress after he was briefed.

Miller was a deputy commissioner at the time. He became acting commissioner in November, after Commissioner Douglas Shulman completed his five-year term. Shulman had been appointed by President George W. Bush.

Sen. Charles Grassley, R-Iowa, questioned the timing of the IRS admission. It came days before the expected release of the inspector general's report.

"This timing is curious," Grassley says in a letter today to Miller. "The IRS chose not to fully answer long-standing congressional questions on the issue, even though they had been posed months before this particular question was asked at the conference."

Grassley asks Miller to provide records relating to the agency's decision to disclose the targeting of tea party groups at a Friday conference rather than to members of Congress who had been asking about it for more than a year. He also asks for any communications on the issue between the IRS and the White House.

At least three congressional committees have made similar requests. The House Ways and Means Committee, chaired by GOP Rep. Dave Camp of Michigan, is holding a hearing on the issue Friday and Miller is scheduled to testify.

Meanwhile, two Republican governors urged Obama to appoint a special prosecutor to investigate the case. Louisiana Gov. Bobby Jindal and Wisconsin Gov. Scott Walker call the allegations "Big Brother come to life." They want a special prosecutor to find out if any laws were broken and say Obama should fire any IRS employees responsible for the situation.

Sen. Roy Blunt, R-Mo., called today for Miller to step down or for Obama to replace him.

"If the reports are accurate that Steven Miller knew about the IRS' egregious targeting of conservative groups last year and misled members of Congress about those actions, he should step down or be removed immediately," Blunt said today.

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typroctor wrote:
Not good enough. Independant Council
on May 14,2013 | 10:15AM
aumakua wrote:
Small independent bag would be better.
on May 16,2013 | 09:32PM
cojef wrote:
Obama implemented the Czar positions soon after he was installed as the President. These individual were in charge of the various government agencies and were in charge over the career agency heads. That really padded the payroll and assumed the leadership role that may have been the cause of all the mishaps that are emerging. Wondering what percentages of liberal causes non-profit applications were approved during the same period, as compared to the conservative groups.
on May 14,2013 | 10:37AM
AhiPoke wrote:
What I find most interesting is the president's apparent lack of knowledge about just every controversy that's happened on his watch. A few that come to mind are: fast and furious, Benghazi, and now this. He's either lying or very disconnected from his job.
on May 14,2013 | 10:53AM
cojef wrote:
Could be disconnected except for the Ben Lauden slaying, he took charge and gave the order. Strange that he is disconnected with the others because he received the benefits and got re-elected.
on May 14,2013 | 11:30AM
dctaira wrote:
He's both.
on May 14,2013 | 12:23PM
palani wrote:
The Article 2 impeachment count against then President Nixon involved misusing the IRS to pursue those on his enemies list. From http://classes.lls.edu/archive/manheimk/371d1/nixonarticles.html

He has, acting personally and through his subordinates and agents, endeavoured to obtain from the Internal Revenue Service, in violation of the constitutional rights of citizens, confidential information contained in income tax returns for purposed not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.

Now that this despot has, perhaps irreversibly, antagonized his main base of support, the mainstream press, how long will the truth be suppressed?

on May 14,2013 | 11:00AM
entrkn wrote:
I'm a tax payer and I want the IRS to go after entities that claim that they are exempt from the taxes I gladly pay... they didn't invent America and they are not going to re-invent America but they certainly have my blessings if they choose to leave America.
on May 14,2013 | 11:36AM
sluggah wrote:
Dick Nixon is reserving a seat next to him in the hot place.
on May 14,2013 | 11:56AM
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