The Treasury Department watchdog now at the heart of the IRS scandal is planning to re-interview former GOP Senate candidate Christine O’Donnell about whether her confidential federal taxpayer information was breached in 2010, as congressional investigators vow to press forward with emerging facts regarding Washington’s involvement in the targeting of conservative groups.
A former IRS employee testified recently at a hearing before the House Committee on Oversight and Government Reform that the Washington office of the Internal Revenue Service was involved in the improper scrutiny of political advocacy groups and that the issue reached the office of the chief counsel, William Wilkins, one of two political appointees in the agency.
Sen. Chuck Grassley, Iowa Republican, also is demanding information from the Department of Justice as to why it did not prosecute several cases in which confidential taxpayer information of political donors and candidates, including Ms. O’Donnell, was accessed.
“No fair observer of that hearing would believe that this investigation is close to being over,” said Frederick Hill, a spokesman for Rep. Darrell E. Issa, California Republican and chairman of the oversight committee.
Mr. Hill said the committee is continuing to conduct interviews and is close to the point where it will get to more senior-level IRS staffers.
“This is certainly demonstrative of much more involved and senior advisers than the administration wanted to acknowledge two or three months ago,” he said.
J. Russell George, Treasury’s inspector general for tax administration, retired IRS agent Carter Hull, and agency employee Elizabeth Hofacre testified that they saw no evidence of political bias or involvement from the White House in the improper targeting of conservative groups seeking tax-exempt status starting in 2010.
Mr. George also fended off broadsides from Democratic lawmakers furious that he failed to disclose that liberal groups received additional scrutiny as well. He said he received such information only recently, and well after his initial report was released in April.
Regardless, the scandal has spread beyond the improper targeting of political advocacy groups, which has been the focus for the past several months. The Washington Times reported last week that Mr. George had found at least four cases in which a political candidate’s or donor’s tax information was accessed improperly.
One case was a “willful” violation, Mr. George said. He said he found three other cases in which records of candidates and donors were accessed inappropriately but concluded that those were “inadvertent,” according to information he provided to Mr. Grassley.
Mr. George’s office also plans to interview Ms. O’Donnell about an incident in 2010 when Delaware’s tax collection office accessed the federal tax records of an unidentified taxpayer, thought to be Ms. O’Donnell, a Grassley staffer said.
A spokesman for the inspector general’s office said in an e-mail Monday that he has no information he can share.
Patrick Carter, director of the state’s division of revenue, would not identify Ms. O’Donnell as the taxpayer but said he approved the inquiry “for routine purposes.”
Ms. O’Donnell told The Times that she was contacted in January by a federal Treasury official who told her that her IRS tax records might have been accessed inappropriately by a government official. She said the federal investigator dropped the inquiry in April, and she has been unable to learn why her tax records were scrutinized.
She said the tax records were accessed on the same day that she announced her candidacy for the U.S. Senate, and she has questioned whether the timing was politically motivated. News reports surfaced at the time that Ms. O’Donnell had been slapped with a tax lien, which turned out to be generated by a computer error.
Mr. Carter said his agency did not engage in wrongdoing.
“Upon reviewing the access with the U.S. Treasury Department in December 2012, my division again found state access of the records of the taxpayer was part of a typical review and was not improper,” Mr. Carter said. “Further, the state Division of Revenue has received no notification from the U.S. Treasury that access of the taxpayer’s records by a state employee was improper.”
Mr. Carter said the division “routinely compares state and federal tax records for discrepancies and potential investigation based on information provided on tax forms, financial information from other state government agencies, from tips or complaints, or from media coverage or other public information highlighting tax issues.”
Ms. O’Donnell said the explanation from Delaware’s tax office “simply raises more questions.”
“It all points to a need to continue the investigation to get to the bottom of this,” she said.
Mr. George also told Mr. Grassley that his office is investigating two other allegations that political candidates were targeted for IRS audits.
Mr. Grassley asked the Justice Department to respond. A spokesman for the Justice Department said in an email that the department received Mr. Grassley’s request and was reviewing it, but declined further comment.
Rep. Elijah E. Cummings of Maryland, the ranking Democrat on the oversight committee, was angry that Mr. George apparently intervened and blocked the release of further information about suspected political targeting to the oversight committee.
Mr. George said he received conflicting information about whether the information could be released and that he wanted to err on the side of caution in not releasing sensitive taxpayer records.
Though there is no indication that the tax scrutiny went as far up as the White House, the bipartisan interest indicates that the scandal is unlikely to fade away anytime soon.
“[N]obody’s trying to attack you or anybody else — just trying to get to the facts,” Mr. Cummings told Mr. George at the oversight committee hearing last week. “This is our watch. This is it. I’ve said over and over again, we don’t know how long we are going to be here.”
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