May 14, 2013 / 9:23 PM / 5 years ago

US senator probing why IRS revealed mistakes at lawyer meeting

WASHINGTON (Reuters) - The decision by the IRS to reveal to a small room of tax lawyers last week that it had targeted conservative groups is now itself the subject of a Congressional inquiry.

In a letter Tuesday to Steven Miller, acting commissioner of the IRS, Iowa Republican Senator Charles Grassley asked for all records relating to the decision to reveal its mistakes at a meeting on Friday of an American Bar Association committee instead of to Congress.

Lois Lerner, the IRS director of Tax Exempt Organizations, “revealed this bombshell” at a lawyers conference “prior to informing Congress, despite multiple Congressional requests for information about these practices,” he wrote.

“An IRS official apologized for activities the IRS previously denied,” Grassley said in a comment released by his office. “She explained the activities in a detailed way. Why now and why at a conference instead of to Congress?”

Democratic Senator Barbara Mikulski of Maryland also criticized the agency on Tuesday for failing to disclose the news to the Appropriations Committee she chairs before “news outlets began reporting” about it.

On Monday, an agency statement said the IRS specifically wanted to reveal the information in that forum because it knew a report from the IRS Inspector General was about to be released.

“The ABA Tax Section conference was an important meeting for a key part of the Exempt Organization community” and it was “important” for members to “hear first-hand that we made mistakes in handling the process.”

Lerner revealed that the agency had singled out Tea Party and conservative groups for scrutiny of their tax-exempt status in a windowless room at a Washington hotel on Friday in response to what appeared at first glance to be a casual question from a member of the ABA Tax Section’s Committee on Exempt Organizations.

It allowed the news to get out in a friendly setting of professional colleagues who did not have a chance to follow up instead of in a rowdy news conference or a hostile Congressional committee-room.

But it later turned out to be not as casual as it seemed.

The agency had three press officers on hand to field questions from a handful of reporters who were present.

The question itself came from a long-time professional colleague of Lerner‘s, Celia Roady, a Washington tax lawyer at the firm of Morgan Lewis who served on the agency’s Advisory Committee on Tax-Exempt and Government Entities for a two year term starting in 2010 and has attended numerous professional conferences with Lerner.

In a brief telephone interview Monday, Roady said she was “as stunned as anybody to get a response” to her question.

But she declined to comment when asked how it was she happened to ask the question in the first place, referring Reuters to the IRS, which also declined to elaborate.

While the agency statement said that officials knew a critical Inspector General’s report on the subject was due for release, most likely the following week, Lerner’s answer to Roady’s question made no mention of an inspector general’s report.

It took the form of an apology, ultimately generating a first round of headlines that said “IRS apologizes.”

Since then, members of Congress from both parties condemned the agency practice and have called for investigations and resignations. President Barack Obama on Monday called the practice “outrageous.”

Given the Congressional backlash that ensued, any hope by the IRS to mitigate damage with its tax conference roll-out flopped, said Eric Dezenhall, who has been a crisis public relations specialist in Washington for almost 30 years.

“They made a bet that this would be the quietest way to roll it out,” he said of the IRS strategy. “It didn’t work.”

The IRS’s approach put it in a weak position to fend off Congressional criticism, said Scott Talan, a communications professor at American University.

To mitigate damage going forward, IRS officials need to “explain what was going on and what corrective actions will be taken ahead,” he added.

Editing by Fred Barbash; Reporting By Patrick Temple-West. Editing by Andre Grenon

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