Washington • Hurrying to check a growing controversy, President Barack Obama ousted the acting commissioner of the Internal Revenue Service late Wednesday amid an outcry over revelations that the agency had improperly targeted tea party groups for scrutiny when they filed for tax-exempt status.
Obama said Treasury Secretary Jacob Lew had asked for and accepted Steven T. Miller’s resignation. Obama made no public criticism of Miller but spoke of inexcusable “misconduct” by IRS employees and said new leadership at the agency was critical.
“Americans are right to be angry about it, and I am angry about it,” Obama said in a televised statement from the White House. “I will not tolerate this kind of behavior in any agency but especially in the IRS, given the power that it has and the reach that it has into all of our lives.”
Meanwhile, the FBI is investigating potential civil rights violations at the IRS, Attorney General Eric Holder said earlier Wednesday. Other potential crimes include making false statements to authorities and violating the Hatch Act, which prohibits federal employees from engaging in some partisan political activities, Holder said.
Miller, a 25-year IRS veteran, took over the agency in November, when the five-year term of Commissioner Douglas Shulman ended.
In an email to employees, Miller said, “This has been an incredibly difficult time for the IRS given the events of the past few days, and there is a strong and immediate need to restore public trust in the nation’s tax agency. I believe the Service will benefit from having a new acting commissioner in place during this challenging period.”
At the time when tea party groups were targeted, Miller was a deputy commissioner who oversaw the division that dealt with tax-exempt organizations.
An inspector general’s report does not indicate that Miller knew conservative groups were being targeted until after the practice ended. But documents show that Miller repeatedly failed to tell Congress that tea party groups were being targeted, even after he had been briefed on the matter.
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, sometimes burdensome 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 revealing that tea party groups had been targeted. On July 25, 2012, Miller testified before the House Ways and Means oversight subcommittee but again was not forthcoming on the issue — despite being asked about it.
Miller was scheduled to testify Friday at a Ways and Means hearing. It was not immediately clear whether he would still testify.
Holder announced Tuesday that the Justice department had opened a criminal investigation, joining three committees in Congress that are looking into the matter.
“I can assure you and the American people that we will take a dispassionate view of this,” Holder told the House Judiciary Committee at a hearing Wednesday. “This will not be about parties, this will not be about ideological persuasions. Anybody who has broken the law will be held accountable.”
But, Holder said, it will take time to determine if there was criminal wrongdoing.
Legal experts, however, said it could be difficult to prove that IRS officials or employees knowingly violated the civil rights of conservative groups. If there is a violation, the experts said, investigators can sometimes prove more easily that officials made false statements or obstructed justice in some other way.
“I think it’s doubtful that any of these knuckleheads who engaged in the conduct that gave rise to this controversy knowingly believed that they were violating the law,” said David H. Laufman, a former Justice Department lawyer. “But that remains to be seen. That’s what investigations are for.”
“It’s more likely than not that,” he said, “the conduct at issue here may constitute violations of IRS rules or standards or protocols or procedures but may fall short of what is necessary to constitute a criminal offense.”
Even if IRS agents broke criminal laws in targeting conservative groups, investigators may have to prove they knowingly did it, a high standard, said Brian Galle, a former Justice Department lawyer who teaches law at Boston College.
“If the reason they were pursuing them was in order to punish them for their political activity, there might be a First Amendment concern there,” Galle said. “On the other hand, if the reason that they were looking for tea party groups is because there had been press reports about this new group, the tea party, who was aimed primarily at getting more conservative people elected to office, then they were just responding to the evidence. It really depends on what their motives were.”
Wednesday’s hearing was the first of several in Congress that will focus on the issue.
The House Oversight Committee announced Wednesday that it would hold a hearing May 22, featuring Lois Lerner, the head of the IRS division that oversees tax exempt organizations, and former IRS Commissioner Douglas Shulman, whose five-year term ended in November.
The Senate Finance Committee announced a hearing for next Tuesday.
At Wednesday’s hearing, Rep. Jim Jordan, R-Ohio, said Lerner misled him and his staff when they asked her about complaints from conservative groups that they were being harassed by the IRS.
“I know for a fact, Lois Lerner lied to me, she lied to our personal staff, she lied to committee staff, she lied in correspondence,” Jordan said.
Lerner learned about the targeting on June 29, 2011, according to a report Tuesday by the inspector general.
The report said ineffective management at the IRS allowed agents to improperly target tea party and other conservative groups for more than 18 months.
The report said that while their applications for tax exempt status languished, tea party groups were asked a host of inappropriate questions, including: Who are your donors? What are the political affiliations of officers? What issues are important to the organization, and what are your positions on those issues? Will any officers in the group run for public office? Where do you work?
The IRS started targeting groups with “Tea Party,” ‘‘Patriots” or “9/12 Project” in their applications for tax exempt status in March 2010, the inspector general’s report said. By August 2010, it was part of the written criteria used to flag groups for additional scrutiny.
Colleen M. Kelley, president of the National Treasury Employees Union, said Wednesday that no union employees had been disciplined, as far as she knew. She noted that the IG’s report said agents were not motivated by political bias.
Kelley told The Associated Press that low-level workers could not have specifically targeted conservative groups for long without the approval of supervisors. However, she noted, there are many levels of supervisors at the IRS.
“No processes or procedures or anything like that would ever be done just by front-line employees without any management involvement,” Kelley said. “That’s just not how it operates.”