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February 6, 2014
Koskinen Denies Targeting of Tax-Exempt Political Groups' Donors for Audit
by William Hoffman

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House Ways and Means Oversight Subcommittee members repeatedly sought assurances during a February 5 hearing with IRS Commissioner John Koskinen that the Service is not targeting for audits donors to conservative groups like those whose applications for tax-exempt status were scrutinized by the agency in recent years.

Koskinen said that to the best of his knowledge, political groups' applications for exemption are no longer being singled out. Donor lists compiled by the IRS have been destroyed, he said. Donors have not been audited for giving money to political groups, he added, insisting that the IRS's audit selection process is independent of political considerations.

Subcommittee members also pressed the commissioner for a promise that the IRS's proposed regulations on political activity by tax-exempt section 501(c)(4) groups would be shelved until investigations into last year's exempt organizations controversy are complete.

Oversight Subcommittee Chair Charles W. Boustany Jr., R-La., said the IRS's proposed regulations would "upend" 501(c)(4) rules that had been in place since 1959. While the IRS justified its proposal by citing "considerable confusion" among its employees over political activities by exempt organizations, Boustany said his committee's investigation found "IRS screeners were competent and well-equipped" to evaluate political groups' applications for tax-exempt status. "The new rules do not seek to clarify," Boustany said. "They seek to silence."

Koskinen said that the proposed rulemaking has already drawn an IRS-record 21,000-plus public comments and that there may be a public hearing on the matter. Any final regulation will depend in large measure on that feedback, he said.

Democrats Charge Hypocrisy

Ways and Means member Joseph Crowley, D-N.Y., protested what he called Republicans' repeated attempts to find a smoking gun to connect the exempt organizations investigation to President Obama, even though none of the investigations have been completed.

Crowley said that in Boustany's opening remarks, the chair excoriated the president for claiming there was "not even a smidgen of corruption" at the IRS, but that Boustany then claimed "this committee has actually investigated the matter, and found otherwise." Crowley said, "Those two statements don't necessarily jibe" because none of the investigations are complete.

"The truth of the matter is, we don't know yet what the answer is in the investigation of the IRS," said Rep. Mike Kelly, R-Pa.

Asked whether Obama's remarks about the absence of IRS corruption were imprudent given that congressional and other investigations are incomplete, Koskinen declined to answer directly.

"I wouldn't want to get into a big argument here, but . . . there have been a lot of statements made in the case of an open investigation that would appear to be drawing conclusions prior to the conclusion of that investigation," Koskinen said. "It's not my role to challenge what anybody is saying in terms of what's going on and what happened in the past. I said I'm looking forward to the investigation being concluded, we'll see what the facts are, and we'll respond appropriately."

GOP Plea for Lerner Docs

Ways and Means Committee Chair Dave Camp, R-Mich., made a surprise appearance at the Oversight hearing to ask Koskinen for all IRS communications about the proposed regulations up to the date of their release last November. Koskinen said he was "anxious to cooperate with the full committee as well as the subcommittee."

Camp also asked how many e-mails written by former IRS Exempt Organizations Division Director Lois Lerner have still not been received by his committee. Koskinen said he did not know, but observed that the Service has already turned over more than 500,000 documents, and had made several dozen IRS employees available for interviews. The commissioner later told reporters that the IRS has 150 employees working full time to comply with the congressional and other information requests.

Koskinen defended his decision February 3 to pay performance awards that had been suspended last year because of sequestration, calling it one way to show appreciation for IRS employees who have gone four years without a raise. He said that the recipients would be chosen by IRS management and that 30 to 40 percent of employees would not qualify for an award.

Koskinen also said he planned to find more money for employee training. Travel and training budgets have been slashed more than 80 percent in the past few years, he noted. "My experience is that the last thing that should go is training," he said. "We will spend more money this year on training, [though] not as much as we've spent in the past."

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