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Washington IRS office played role in scrutiny case: Republicans

A woman walks out of the Internal Revenue Service building in New York in this May 13, 2013 photo. REUTERS/Shannon Stapleton
A woman walks out of the Internal Revenue Service building in New York in this May 13, 2013 photo. REUTERS/Shannon Stapleton

By Kim Dixon

WASHINGTON (Reuters) - A high-level Internal Revenue Service office in Washington played a role in delaying reviews of some conservative groups' applications for tax-exempt status, according to excerpts of interviews released by Republicans on Wednesday.

The excerpts came from mid-level IRS officials in Washington, including one who expressed frustration that the IRS chief counsel's office above him interfered with his review.

Democrats responded that Republicans were "cherry picking" quotes to bolster their contention that partisan politics influenced decisions by IRS officials in Washington.

The controversy erupted in May when an IRS official apologized for the tax agency's extra scrutiny of applications from groups linked to the then-emerging Tea Party movement.

It has become a charged battle with Democrats downplaying the case and Republicans trying to trace the practices back to the White House.

Republicans in the House of Representatives probing the matter wrote IRS acting chief Danny Werfel on Wednesday seeking emails between IRS, the Treasury Department and the White House.

"Demands for information about political activity during the 2010 election cycle appears to have caused systemic delays in the processing of Tea Party applications," the letter said.

Democrats released their own interview excerpts, including one from another IRS official who said it was not uncommon for the chief counsel's office to review controversial cases.

At a House hearing on another matter on Wednesday, Werfel said an internal review found that groups beyond the Tea Party received tax-exempt application scrutiny equivalent to the targeting of conservative groups.

A report in May by the Treasury Inspector General for Tax Administration had mentioned the involvement of the chief counsel's office. The excerpts provide more details and identify the officials involved.

Democrats have blasted TIGTA's chief, who Werfel said personally intervened to halt the IRS from sharing information on other targeted groups with investigators, having concerns that personal information would be released.

On Tuesday Democrats released a summary of 15 interviews with IRS employees that they said found no evidence of political motivation or White House involvement.

'TAKEN ABACK'

Under the tax code in question, groups eligible for the federal exemption must engage in social welfare activity exclusively. However, IRS regulations provide some leeway for political activity, making a ruling sometimes difficult.

Carter Hull, a Washington IRS official overseeing the applications after lower-level agency officials sought guidance, said he was "taken aback" by the queries from the chief counsel's office, according to Republicans.

Hull is one of two IRS workers set to testify before the House Oversight and Government Reform Committee on Thursday. That panel is one of several probing the matter, with Republicans and Democrats interviewing IRS officials privately and then releasing excerpts.

The head of the chief counsel's office, William Wilkins, was appointed by Democratic President Barack Obama. The president has said he learned of the added scrutiny in May.

The IRS has said that Wilkins, who oversees an office of 1,600 employees that provide legal advice to the IRS, was not himself involved in the added scrutiny.

The top Democrat on the oversight panel, Elijah Cummings, called the excerpts "cherry picked" and questioned why only two of the 16 IRS employees interviewed so far were invited to testify.

According to another IRS official quoted by Republicans, Lois Lerner, the IRS tax exempt chief who first apologized for the scrutiny, said that the chief counsel's office would need to get involved.

Lerner, who is now on administrative leave, infuriated Republicans in May when she asserted her constitutional right not to testify before the oversight panel.

(Reporting By Kim Dixon; Editing by Xavier Briand)

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