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Douglas Shulman: Former IRS head testifies

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(AP/ABC7) - The man who led the Internal Revenue Service when it was giving extra scrutiny to tea party and other conservative groups seeking tax-exempt status told Congress on Tuesday that he knew little about what was happening while he was still commissioner.

Former IRS Commissioner Douglas Shulman. AP Photo.

Douglas Shulman, who vacated his position last November when his five-year term expired, told the Senate Finance Committee he didn't learn all the facts until he read last week's report by a Treasury inspector general confirming the targeting strategy.

In his first public remarks since the story broke, Shulman said: "I agree this is an issue that when someone spotted it, they should have brought it up the chain. And they didn't. I don't know why."

Shulman was testifying at Congress' second hearing on the episode that has largely consumed Washington since an IRS official acknowledged the targeting and apologized for it in remarks to a legal group on May 10. Shulman and the two officials who testified - the outgoing acting commissioner, Steven Miller, and J. Russell George, the Treasury Department inspector general who issued the report - were all sworn in as witnesses, an unusual step for the Finance panel.

Asked by Sen. John Cornyn, R-Texas, whether he owed conservative groups an apology, Shulman said, "I'm certainly not personally responsible for creating a list that had inappropriate criteria on it."

That was a reference to a list of words IRS workers looked for in deciding which groups to screen, a list that included the terms including "tea party" and "patriot."

"I very much regret that it happened and that it happened on my watch," Shulman said.

Tea Party protests

Tea party activists waving flags and signs, singing patriotic songs and chanting anti-IRS slogans protested outside federal buildings across the country Tuesday to protest the agency's extra scrutiny of conservative groups.

There were also rallies outside IRS offices in Atlanta; Louisville; Chicago; Cherry Hill, N.J.; Kansas City, Mo.; Philadelphia; and Providence, R.I., among others.

In Washington, a few dozen people congregated Tuesday afternoon outside the IRS headquarters, listening to speeches and carrying signs reading "Audit the IRS" and "Don't audit me, Bro." The protest was on the opposite side of the building from the main entrance, which was blocked off with metal barriers and police tape as a dozen Federal Protective Service officers milled about.

Shoshana Weissmann, a 20-year-old George Washington University student who works at a political consulting firm, said she was troubled by the IRS' actions.

"I just think what they did was inappropriate and if they were doing this to liberals, I would be out here, too," said Weissmann, a registered Republican who said she is not affiliated with the tea party. "It's scary to think the IRS is capable of this."

Dan Ball says he has been following closely news of the allegations that IRS workers targeted tea party and other conservative groups seeking tax exempt status.

“If there is anybody, regardless of party, who isn't scared of the government exercising power this way, there is something wrong with them,” he said.

Some former IRS staffers say Cincinnati employees shouldn't be vilified. Former senior manager Bonnie Esrig said the office was a nonpolitical environment, and tax-exempt status workloads had soared because of court decisions and rules changes. Esrig, who said she wasn't involved in handling the conservative group applications, said she believed the workers were trying to streamline the research and avoid repetition.

"I don't believe anybody had a political agenda," said Esrig, who retired from the Cincinnati office in January after 38 years to go into consulting.

She and others are skeptical about initial IRS suggestions that a handful of low-level employees were responsible for the practice, saying it's unlikely workers would have developed and followed procedures that focused on conservative groups without any supervisors being aware.

Republicans in Congress are pressing investigations exploring their suspicions that the targeting was politically motivated and involved higher-ups. President Barack Obama's administration has said no senior officials were involved in targeting conservative groups.

Some think the IRS controversy is helping revitalize the tea party movement.

"I think it's a great incentive," said Jim Ferneding, 64, of Montgomery, Ohio, who said he has remained active in the tea party since 2009. "It's terrifying that the government is interfering like this."

Jenny Beth Martin, a co-founder of Tea Party Patriots, a group that organized protests Tuesday, said the IRS was increasing public sympathy for the tea party.

"The American people see we were targeted, we were discriminated against, and our concerns about a government that is too large are valid concerns," she said in Washington.

More grilling

The testimony by Shulman and Miller drew skepticism from lawmakers of both parties, including critical remarks from people who have been unhesitant to say anything negative about the IRS since its activities were revealed nearly two weeks ago. Republicans openly rejected George's assertion that he has no evidence that the decision to target conservative groups was politically motivated.

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