Controversy at IRS Continues to Churn

While the issue no longer is front and center within the mainstream media, the IRS continues to be under scrutiny for its handling of applications for exempt status from conservative organizations. A couple of interesting developments occurred within the past week:

Subpoena for Documents

Last Friday, congressional frustration over the production of documents from the IRS culminated in a subpoena from Rep. Darrell Issa (R-CA), Chairman of the House Government Reform and Oversight Committee, to Treasury Secretary Jacob Lew demanding production of all requested documents, stating that the IRS had failed to produce requested documents and had engaged in a systematic effort to delay, frustrate, impede, and obstruct the Committee’s investigation.

As background, investigation around the issue was spurred by an announcement on May 10 from a then-IRS director that conservative organizations had been improperly subjected to heightened scrutiny, followed by a report indicating the same from the Treasury Inspector General for Tax Administration.

Members of the Senate Finance Committee then sent requests for related information to the IRS, and two House committees also instituted their own investigations. Concerns and complaints were raised to IRS Acting Commissioner Daniel Werfel (appointed by President Obama after Acting Commissioner Steve Miller resigned in May) about the speed of production. Werfel responded that the IRS is fully cooperating, but needed to be cautious because some of the documents contained confidential taxpayer information that needed to be redacted. Werfel also indicated that, to be responsive to the concerns raised by the House Committees, IRS switched to more focused search terms that it expected to boost the percentage of documents reviewed that were responsive to the requested information.

Following Werfel’s response, members of the Senate Finance Committee noted last Friday that the outstanding document requests contain the bulk of the relevant information including key emails and documents belonging to the relevant decision makers both in IRS and elsewhere in government. The House subpoena was issued the same day.

FEC Connection

Also last week, it was revealed that email exchanges between the Federal Election Commission and Lois Lerner, then Director of the IRS Exempt Organizations Division, indicate that the IRS may have unlawfully shared confidential taxpayer information with the FEC. The emails were discovered in the course of the House Ways and Means Committee’s investigation into the conservative organization matter.

A letter sent July 30 by two House Ways and Means Committee leaders requests Acting IRS Commissioner Daniel Werfel to produce by August 14 all communications between the IRS and the FEC between 2008 and 2012, including specific communications to and from Lerner with respect to certain organizations.

We’ll continue to monitor the investigation, and report important developments on this blog.

See Our Services