Democrats pressure IRS inspector over scrutiny of liberal groups

WASHINGTON Wed Jun 26, 2013 5:46pm EDT

J. Russell George, Treasury Inspector General for Tax Administration of the U.S. Treasury, testifies before the Senate Finance Committee in Washington May 21, 2013. REUTERS/Gary Cameron

J. Russell George, Treasury Inspector General for Tax Administration of the U.S. Treasury, testifies before the Senate Finance Committee in Washington May 21, 2013.

Credit: Reuters/Gary Cameron

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WASHINGTON (Reuters) - Democrats on Wednesday intensified pressure on Internal Revenue Service Inspector General Russell George, who is becoming entangled in the controversy over the targeting of conservative groups for extra scrutiny begun by his office.

Last month's report by the Treasury Inspector General for Tax Administration (TIGTA), headed by George, set off a furor in Washington, leading President Barack Obama to fire the agency's chief as the FBI and Congress opened investigations.

A key component of the report was the use of a "be on the lookout" (BOLO) list, which included partisan terms like "Tea Party" and "Patriot," and was used by low-level IRS workers in Cincinnati to screen tax-exempt applicants for greater scrutiny.

Sander Levin, the top Democrat on the Ways and Means Committee in the U.S. House of Representatives, this week released IRS documents showing that words like "progressive" and "blue" were also used to identify liberal-leaning groups.

On Wednesday, Levin wrote to George, questioning his office's statements that the scope of the original audit was limited to conservative terms because it was responding to a request from Republican Representative Darrell Issa.

"There is increasing evidence that the May 14, 2013 audit was fundamentally flawed and that your handling of it has failed to meet the necessary test of objectivity and forthrightness," Levin wrote in the letter.

George, an appointee of Republican President George W. Bush, has up to this point escaped much scrutiny, at least compared to IRS officials under fire at various congressional hearings probing the matter.

Any member of Congress can request an audit. Republicans had asked TIGTA to investigate whether Tea Party and other conservative, tax-exempt applications were receiving inappropriate treatment by the IRS, said TIGTA spokeswoman Karen Kraushaar.

DEMOCRATS RESPOND

Levin said TIGTA's audit examined a group of tax-exempt applicants broader than the conservative groups it was requested to investigate. He cited several pages from the May report suggesting it studied whether any groups were targeted and delayed while seeking tax exempt status.

Democrat Representative Gerald Connolly of Virginia said the new information about progressives on the BOLO list raises concerns about testimony George gave to Congress last month.

In a letter to George, Connolly said George's sworn statements "were at best incomplete, if not misleading."

When asked if TIGTA uncovered any targeted progressive groups, George said a range of tax-exempt applicants investigated had "neutral" names.

"You couldn't necessarily attribute it to one particular affiliation or another," George told the oversight committee on May 22.

Republicans say that simply being on the "BOLO" list does not mean that progressive groups were subject to extra scrutiny. Democrats claim that based on their analysis of the nearly 300 cases reviewed by George, liberal groups were stalled as well.

(Reporting By Kim Dixon; Editing by Cynthia Osterman)

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