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Obama ousts IRS chief over inquiry

In a bid to restore Americans' trust, the president says targeting conservative groups was 'inexcusable.'

May 15, 2013|By Matea Gold, Joseph Tanfani and Melanie Mason, Washington Bureau
  • President Obama talks to reporters at the White House.
President Obama talks to reporters at the White House. (Alex Wong / Getty Images )

WASHINGTON — President Obama forced out the head of the IRS on Wednesday, seeking to restore the public's faith in the tax agency while asserting a measure of control over a rapidly growing political problem.

Making a hastily scheduled statement at the White House, Obama denounced the targeting of conservative groups by the Internal Revenue Service as "inexcusable" and pledged to "do everything in my power to make sure nothing like this ever happens again."

"Americans are right to be angry about it, and I am angry about it," he said. "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."

Steven Miller, a tax lawyer and career IRS official, agreed to resign at the request of Treasury Secretary Jacob J. Lew after coming under fire following revelations that the agency had singled out conservative organizations for special scrutiny. Miller, who has been the acting commissioner since November 2012, will remain at the agency until early June to allow a smooth transition.

Questions mounted about his role this week as it became clear that he had not disclosed the problems to Congress in letters and testimony despite being briefed on it.

Several lawmakers, including Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. Marco Rubio (R-Fla.), had called for Miller's resignation.

Obama's announcement capped a day of growing furor on Capitol Hill over how IRS agents mishandled applications for tax-exempt status by conservative advocacy groups, one of several controversies threatening the White House.

Three congressional committees have scheduled hearings, with Miller set to testify at the first on Friday.

The hearings will build on an audit by a Treasury Department inspector general that found IRS staff in Cincinnati inappropriately flagged conservative organizations, pulling aside applications with keywords such as "tea party" and policy objectives such as "educating on the Constitution and Bill of Rights."

The organizations were seeking recognition as tax-exempt social welfare groups, which are permitted to do a limited amount of political activity, as long as it is not their primary purpose.

The audit concluded that dozens of advocacy groups were forced to answer exhaustive and intrusive questions about their activities and donors. Their applications languished — some for more than three years. The inspector general blamed poor management and a lack of clarity within the IRS about how much political engagement is allowed of such organizations.

Lawmakers on Wednesday said many questions remained, even after the audit. House Speaker John A. Boehner (R-Ohio) escalated the rhetoric early in the day, telling reporters that his question "isn't about who's going to resign" over the controversy. "My question is, who's going to jail?" he said.

In a statement issued after Miller's resignation, McConnell said, "More than two years after the problem began, and a year after the IRS told us there was no problem, the president is beginning to take action."

"If the president is as concerned about this issue as he claims, he'll work openly and transparently with Congress to get to the bottom of the scandal — no stonewalling, no half-answers, no withholding of witnesses," he said.

A separate criminal investigation is already underway. Testifying on Capitol Hill, Atty. Gen. Eric H. Holder Jr. said the Justice Department investigation would look at possible civil rights violations and false statements.

Most important, he said, "if we have to bring criminal actions to make sure this kind of activity does not happen again," the department will do so.

Holder did not say whom the Justice Department was targeting in its investigation. Legal experts noted that it was difficult to prosecute false statement cases.

"You see very, very few of these cases ever brought. The standard is very high," said Nathan J. Hochman, a former assistant attorney general for the tax division at the Justice Department. Hochman, now a partner at Bingham McCutcheon, said a misleading statement was "usually not enough."

Miller also serves as deputy IRS commissioner for services and enforcement, a role in which he fielded questions from members of Congress who said their constituents were complaining about intrusive questions the IRS was posing to conservative organizations.

According to the inspector general's report, Miller became aware that there were potential problems more than a year ago. In late March 2012, amid news reports that tea party groups were having difficulty getting their applications approved by the IRS, he asked one of his managers to find out what was going on.

On May 3, 2012, Miller learned that the agency had improperly singled out groups that used conservative terms in their paperwork, the IRS said this week.

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