U.S. President Barack Obama ousted the acting commissioner of the federal tax agency Wednesday, moving forcefully to quell a growing uproar over revelations that conservative and pro-Israel groups were improperly targeted for scrutiny when they filed for tax-exempt status.
Obama, who had been criticized for appearing passive in his response to one of the latest scandals to hit his administration, promised new safeguards would be put in place to prevent a recurrence of the actions at the Internal Revenue Service.
"Americans are right to be angry about it, and I am angry about it," Obama said in a televised statement from the White House. "I will not tolerate this kind of behavior in any agency but especially in the IRS, given the power that it has and the reach that it has into all of our lives."
The ouster of Acting Commissioner Steven Miller came five days after an IRS supervisor publicly revealed that agents had improperly targeted certain conservative groups for tax exempt status. It came a day after an inspector general's report blamed ineffective management in Washington for allowing it to happen for more than 18 months.
The IRS controversy is one of several dogging the Obama administration, including its response to last year's deadly attack on a U.S. diplomatic facility in Benghazi, Libya, and the seizure of Associated Press phone records in a leak investigation. The trio of tempests has emboldened opposition Republicans as they seek to stymie Obama's second-term agenda and score political points ahead of next year's congressional elections.
Miller's departure hardly ends the IRS matter. Three congressional committees are investigating, and the FBI is looking into potential civil rights violations at the IRS, Attorney General Eric Holder said earlier Wednesday.
Other potential crimes include making false statements to authorities and violating a law that prohibits federal employees from engaging in some partisan political activities, Holder said.
The IRS started targeting groups with "Tea Party," ''Patriots" or "9/12Project" in their applications for tax exempt status in March 2010, the inspector general's report said. By August 2010, it was part of the written criteria used to flag groups for additional scrutiny.
The Jewish Press last week reported that the agency also targeted Z STREET, a pro-Israel organization, which filed a lawsuit against the IRS over the alleged activity. The Jewish Press also said that another Jewish group without any focus on Israel was "the recipient of bizarre and highly inappropriate questions about Israel."
Tea party groups emerged after Obama took office in 2009 and take their name from the Boston Tea Party, a 1773 protest by American colonists against taxation without representation in the British government. The conservative groups generally advocate limited government.
As the IRS investigation widened, the leader of the House of Representatives, Speaker John Boehner, told reporters Wednesday, "My question is, who's going to jail over this scandal?"
Miller, a 25-year IRS veteran, became acting commissioner in November, after Commissioner Douglas Shulman completed his five-year term. Shulman had been appointed by President George W. Bush.
Obama has yet to nominate a permanent successor. A new acting commissioner was not announced Wednesday evening.
In an email to employees, Miller said, "This has been an incredibly difficult time for the IRS given the events of the past few days, and there is a strong and immediate need to restore public trust in the nation's tax agency. I believe the service will benefit from having a new acting commissioner in place during this challenging period."
At the time when tea party groups were targeted, Miller was a deputy commissioner who oversaw the division that dealt with tax-exempt organizations.
The report by the Treasury inspector general for tax administration does not indicate that Miller knew conservative groups were being targeted until after the practice ended. But documents show that Miller repeatedly failed to tell Congress that tea party groups were being targeted, even after he had been briefed on the matter.
The IRS said Miller was first informed on May, 3, 2012, that applications for tax-exempt status by tea party groups were inappropriately singled out for extra, sometimes burdensome scrutiny.
At least twice after the briefing, Miller wrote letters to members of Congress to explain the process of reviewing applications for tax-exempt status without revealing that tea party groups had been targeted. On July 25, 2012, Miller testified before a House subcommittee but again was not forthcoming on the issue … despite being asked about it.
In all, members of Congress sent at least eight letters to the IRS over the past two years, asking about complaints from conservative groups that they were being harassed by the IRS. None of the IRS responses acknowledged that conservative groups were targeted.
The Justice Department opened its criminal investigation on Friday, Holder said.
"This will not be about parties, this will not be about ideological persuasions. Anybody who has broken the law will be held accountable," Holder told the House Judiciary Committee at a hearing Wednesday.
But, Holder said, it will take time to determine if there was criminal wrongdoing.
Legal experts, however, said it could be difficult to prove that IRS officials or employees knowingly violated the civil rights of conservative groups. If there is a violation, the experts said, investigators can sometimes prove more easily that officials made false statements or obstructed justice in some other way.
"I think it's doubtful that any of these knuckleheads who engaged in the conduct that gave rise to this controversy knowingly believed that they were violating the law," said David H. Laufman, a former Justice Department lawyer.
"But that remains to be seen. That's what investigations are for."
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