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Friday, February 28, 2014

Official’s testimony reveals IRS planned crackdown rules in 2012 -- By Stephen Dinan, The Washington Times

Ousted IRS chief Steve Miller, right, and J. Russell George, Treasury Inspector General for Tax Administration, are sworn in on Capitol Hill, in Washington, Friday, May 17, 2013, prior to testifying before the House Ways and Means Committee hearing on the Internal Revenue Service (IRS) practice of targeting applicants for tax-exempt status based on political leanings. (AP Photo/Charles Dharapak)The IRS's new proposal to crack down on nonprofits was in the works a year before the tea party targeting scandal broke, according to a Treasury Department official who told congressional investigators it was spurred by pressure from outside parties.

The revelation follows earlier testimony from former IRS Commissioner Steve Miller, who told investigators that they started "brainstorming" ways to crack down on nonprofits while under pressure from a senior Democratic senator who was "complaining bitterly to us" about the way groups were engaging in politics while organized as social welfare nonprofits.

House Oversight Committee Chairman Darrell Issa and subcommittee Chairman Jim Jordan recounted the testimony in a letter sent this week to IRS Commissioner John Koskinen, who now must decide what to do about the proposed crackdown.

The two lawmakers said the evidence proves the IRS crackdown was under way well before the revelation last May that the tax agency had improperly targeted tea party and conservative groups for scrutiny, and delayed many of their applications for nonprofit status.

"One email from June 2012 demonstrates that the IRS and the Treasury Department considered privately 'addressing' 501(c )(4) organizations well before the public awareness of the IRS targeting," the two congressmen said in their letter to Mr. Koskinen.

According to their letter, Ruth Madrigal, a Treasury Department official, was on an email chain with Lois G. Lerner, the former IRS official who has been painted as a key figure in the tea party scandal, said that "in 2012, there were conversations between my office, Office of Tax Policy, and the IRS regarding guidance relating to qualifications for tax exemption under (c )(4)."

Asked by investigators during the Feb. 3 interview if those conversations were in reaction to requests from outside groups, she responded affirmatively.

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