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Treasury official rebuffs accusations in IRS targeting affair

J. Russell George, treasury inspector general for tax administration, testifies at a House Oversight and Government reform hearing on 'Colle
J. Russell George, treasury inspector general for tax administration, testifies at a House Oversight and Government reform hearing on 'Colle

By Kim Dixon

WASHINGTON (Reuters) - A U.S. Treasury Department official on Thursday rebuffed accusations from congressional Democrats who say he was biased in his investigation of the Internal Revenue Service's controversial scrutiny of Tea Party-linked political groups.

Treasury Inspector General for Tax Administration, Russell George, made his comments in prepared testimony to a House of Representatives Committee, which was holding a series of hearings on whether the IRS unfairly targeted and scrutinized conservative groups applying for tax exempt status.

George rejected accusations made by some Democratic lawmakers that he did not fully disclose that his office found no political motivation behind the IRS' heightened scrutiny in 2010-2012 of applications for tax-exempt status submitted by conservative political groups.

"That is not correct," he said in the written remarks. "None of this information has been withheld from Congress." George was due to address the committee later in the day.

A report from George's office in May found "inappropriate targeting" and poor management by the IRS of how it enforced laws that allow some non-profits groups to be tax-exempt, depending on their level of political involvement.

Some Republican lawmakers have said that the IRS's review of tax-exemption applications from conservative groups, done largely at a branch office in Cincinnati, was somehow directed from Washington, possibly for political reasons.

Democrats have said that there is no evidence of this. They released a 36-page memo on Tuesday with excerpts of interviews with 15 IRS employees which they said backed their argument. Two IRS employees who spoke to the committee on Thursday also said there was no evidence of political interference.

The hearing and George's defense of his inquiry into the matter marked the latest twists in a tale that rocked the IRS, prompting President Barack Obama to oust the agency's chief in May. It prompted an FBI investigation and a congressional probe.

NO EVIDENCE OF POLITICAL INTENT

George also said in his prepared testimony that his office was looking into evidence presented by Democrats that liberal-leaning groups faced IRS treatment similar to that given to conservative groups.

Democratic and Republican congressional investigators have conducted more than a dozen private interviews with IRS staff. Some of these staffers talked publicly for the first time at the hearing about their work.

Carter Hull, a Washington official involved in handling tax-exemption applications, told the House of Representatives Oversight and Government Reform Committee at the hearing that he was assigned to review 'test cases' from the Tea Party-linked groups.

The Tea Party movement, which is fiercely anti-Obama and advocated for smaller government and lower taxes, was still a new force in U.S. politics at that time.

Hull told lawmakers that processing of these applications was delayed because higher-ups wanted more time to review them. He called that an unusual level of oversight in his experience with 48 years of service with the agency.

Elizabeth Hofacre, an agency employee in the Cincinnati branch office, also testified. "I was frustrated by what I perceived as micro-management," she said.

Neither she nor Hull said they had any knowledge of any scrutiny done for political reasons.

(Additional reporting by Patrick Temple-West; Reporting By Kim Dixon; Editing by Kevin Drawbaugh)

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