A single tea party application for tax-exempt status was flagged as a potential high-profile case in 2010 by an IRS employee in Cincinnati — but a manager said the agency was not motivated by politics in singling out such groups, according to transcripts of interviews with Ohio employees released on Tuesday.
“Because of media attention that he had seen, he had concerns about this being a high-profile case,” a Cincinnati manager told investigators from both the House Oversight and Ways and Means committees.
“It was normal business for us to look at a situation that may be defined as a high-profile application, and that there was a lot of concerns about making sure that any cases that had, you know, similar-type activities or items included, that they would be worked by the same agent and the same group,” the manager said.
“If we end up with four applications coming into the group that are pretty similar, and we assign them to four different agents, we won’t want four different determinations,” the manager told investigators. “It’s just not good business. It’s not good customer service.
“We never, never discussed any, any political . . . aspirations,” the manager said.
The manager — who identified himself as a “conservative Republican” — was among several quoted in transcripts released on Tuesday by Rep. Elijah Cummings, the ranking Democrat on the Oversight Committee, in its continuing inquiry into the Internal Revenue Service’s targeting of tea party, religious and conservative groups.
By releasing the full transcript, the Maryland congressman made good on last week’s promise to California Rep. Darrell Issa, the panel’s GOP chairman who released partial transcripts to the media last week.
“It debunks conspiracy theories about how the IRS first started reviewing these cases,” Cummings said in a letter to Issa. “These facts are a far cry from accusations of a conspiracy orchestrated by the White House to target the president’s political enemies.”
Issa attacked Cummings on Tuesday, saying releasing the full transcript obstructed the investigation.
"I am deeply disappointed that Ranking Member Cummings has decided to broadly disseminate and post online a 205-page transcript that will serve as a roadmap for IRS officials to navigate investigative interviews with Congress," Issa charged.
"After unsuccessfully trying to convince the American people that IRS officials in Washington did not play a role in inappropriate scrutiny of tea party groups and declaring on national television that the case of IRS targeting was ‘solved’ and Congress should ‘move on,’ this looks like flailing," the chairman added. "Americans who think Congress should investigate IRS misconduct should be outraged by Mr. Cummings’ efforts to obstruct needed oversight."
In the transcripts released by Cummings, the IRS employee is not identified, but he has been named by the Hill and other news organizations as John Shafer, a manager in the Cincinnati office.
The Shafer transcript provides the clearest explanation yet of the origins of IRS scrutiny of groups seeking tax-exempt status — and it shows no involvement from top IRS executives or anyone outside the agency.
Shafer said that no political considerations were given when the first tea party case was brought to him by an IRS reviewer for a second look, and when he moved the case up the chain to agency officials in Washington because it could bring media attention.
The applicant in the case, who was not disclosed because of privacy rules, indicated “potential political activity” and lacked information that would have enabled the IRS to immediately decide whether to it grant tax-exempt status, Shafer said.
Under section 501(c)(4) of the tax code nonprofits must be operated “exclusively” for social welfare. IRS rules interpret that to mean that they can’t have politics — campaign intervention — as their primary purpose.
The designation allows organizations to keep their donors private.
“When I was an agent, the cases that I really despised working most were (c)(4)s,” Shafer told congressional interviewers. “The regs are the regs, and, you know, we . . . have to deal with what we have.”
Twenty-five tea party, religious, and conservative organizations have sued the IRS in federal court over the additional scrutiny.
Bloomberg News contributed to this report.
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