New IRS chief: Inappropriate screening was broader

ALAN FRAM, Associated Press

WASHINGTON (AP) — The Internal Revenue Service's screening of groups seeking tax-exempt status was broader and lasted longer than has been previously disclosed, the new head of the agency said Monday.

An internal IRS document obtained by The Associated Press said that besides "tea party," lists used by screeners to pick groups for close examination also included the terms "Israel," ''Progressive" and "Occupy." The document said an investigation into why specific terms were included was still underway.

In a conference call with reporters, Danny Werfel said that after becoming acting IRS chief last month, he discovered wide-ranging and improper terms on the lists and said screeners were still using them. He did not specify what terms were on the lists, but said he suspended the use of all such lists immediately.

"There was a wide-ranging set of categories and cases that spanned a broad spectrum" on the lists, Werfel said. He added that his aides found those lists contained "inappropriate criteria that was in use."

Werfel's comments suggest the IRS may have been targeting groups other than tea party and other conservative organizations for tough examinations to see if they qualify. The agency has been under fire since last month for targeting those groups.

His comments also indicate that the use of inappropriate terms on such lists lasted longer than has been revealed previously. A report last month by a Treasury Department inspector general said agency officials abolished targeting of conservative groups with those lists in May 2012.

Werfel said preliminary results of an examination he has conducted of his agency have so far found no indication of improper screening beyond the IRS offices that examines groups seeking tax-exempt status.

He said he believes there was "insufficient action" by IRS managers to prevent and disclose the problem involving the screening of certain groups, but has discovered no specific clues of misconduct.

"We have not found evidence of intentional wrongdoing by anyone in the IRS or involvement in these matters by anyone outside the IRS," he told reporters.

Werfel's comments came as he released an 83-page report containing his assessments of the embattled agency and initial steps he is taking to make improvements.

The report describes several new procedures the agency is installing to prevent unfair treatment of taxpayers in the future. They include a fast-track process for groups seeking tax-exempt status that have yet to get a response from the IRS within 120 days of applying.

In addition, the top five people in the agency responsible for the tax-exempt status of organizations have been removed, including the former acting commissioner, Steven Miller, whom President Barack Obama replaced with Werfel.

"The IRS is committed to correcting its mistakes, holding individuals accountable as appropriate" and establishing new controls to reduce potential future problems, Werfel told reporters.

Werfel's comments and report drew negative reviews from one of the IRS's chief critics in Congress, Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee.

Issa said the review "fails to meaningfully answer the largest outstanding questions about inappropriate inquiries and indefensible delays. As investigations by Congress and the Justice Department are still ongoing, Mr. Werfel's assertion that he has found no evidence that anyone at IRS intentionally did anything wrong can only be called premature."

The IRS has provided congressional committees investigating the agency documents related to the screening problems. He said work was continuing on removing sensitive taxpayer information from those documents, and he said he expects them to be released soon.

Werfel had promised to produce a report within a month of taking over the embattled agency.

Werfel said he briefed Obama and Treasury Secretary Jacob J. Lew on the report earlier Monday.

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AP reporter Stephen Ohlemacher contributed to this report.