IG letter to Geithner: Targeting not among top concerns
May 18th, 2013
07:45 PM ET
10 years ago

IG letter to Geithner: Targeting not among top concerns

(CNN) - Treasury officials were made aware in June 2012 that the IRS inspector general was reviewing the office that handles tax-exempt applications, but a letter from October shows that the inspector general did not highlight the audit as a top concern for the agency.

In a memo dated October 15, 2012, to then-Treasury Secretary Tim Geithner about IRS challenges for 2013, Inspector General J. Russell George noted other problem areas, but made no mention of the investigation taking place at the time of the agency's intense scrutiny of conservative groups seeking tax-exempt status.

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Instead, the memo stated that "while the Exempt Organizations function has greatly improved its timeliness with regard to acknowledging complaints against tax-exempt organizations, referrals were not always controlled or processed timely."

A spokesperson for the inspector general told CNN this letter was intended to single out what George considered to be the most serious issues for the IRS among all the cases listed in the IG's annual audit, which had already been published.

A spokesperson for the Treasury Department said the current treasury secretary, Jack Lew, and his deputy first learned of the audit’s findings from press reports last week.

The inspector general made headlines Friday when he told the House Ways and Means Committee that he had notified Treasury officials, including Deputy Secretary Neal Wolin, as early as June 2012 that he was reviewing the office that handles tax-exempt applications.

CNN has confirmed that notification came in early June.

According to George, he told Treasury that he was conducting a review but did not disclose the nature of the findings. He said the review was prompted by a request from someone he described as a congressional staff member.

"It was not to inform them of the results of the audit, it was to inform them of the fact that we were conducting the audit," George later clarified.

A Treasury official, who discussed the matter on the condition of not being identified, told CNN that when Wolin learned of the review he did not discuss it with anyone outside the Treasury Department. The same official said Treasury strongly supports the "the independent oversight of its three inspectors general, and it does not interfere in ongoing IG audits." In other words, the political appointees who run Treasury do not take action until such audits are complete.

According to the Treasury official, it wasn't until mid-March of this year that anyone inside the department was informed of the targeting at the office of tax-exempt programs.

That’s when the inspector general discussed a draft audit with one or more staff-level Treasury officials. In April, George first gave Treasury staff a copy of the draft audit and that information was not shared with the treasury secretary or his deputy.

According to officials at both the inspector general and Treasury offices, Lew knew an audit was taking place because George mentioned it during an introductory meeting on March 15, 2013, but he had no window into the results.

Lew was confirmed as Treasury secretary in late February.

The inspector general for the IRS is one of three inspector generals who report to the Treasury and conducts approximately 120 audits per year.

Filed under: 2013 • IRS • Treasury
soundoff (58 Responses)
  1. Firstname Lastname

    Does it matter? Fire and jail them all. Problem never happens again.

    May 19, 2013 09:39 am at 9:39 am |
  2. Marie

    Who knew what and when? Who cares. Please start governing our country and stop the stupid childish bickering.

    May 19, 2013 10:07 am at 10:07 am |
  3. Donkey Party

    Poor, insanely stupid right-wingers. All those involved in the "scandal" are Bush appointees. Spin away, ignorant goons.

    May 19, 2013 10:13 am at 10:13 am |
  4. Jimmy Cameron

    The Democrats should not allow the Republicans to try to turn this IRS investigation into some kind of political football. From my perspective what the Internal Revenue Service was doing was investigating illegal activities in 501c(4) groups claiming tax exemptions for what should be primarily social welfare activities. According to the acting Commissioner of the Internal Revenue Service these groups more than doubled after the Supreme Court ruled in favor of Citizens United in 2010 allowing for corporations to put unlimited amounts of money into these groups without disclosure.
    For instance if Karl Rove's super pack took in $300 million and spent $300 million on political activities they would have to spend at least another $300 million on social welfare activities to be in compliance with 501c(4) regulations stating that they have to be engaged primarily in social welfare activities. At least 51% of the organization activity has to be dedicated to social welfare.

    That the Internal Revenue Service employees used tea party, patriot or any other such words to identify 501c(4) groups is hardly surprising given that groups with those words as part of their name at quadruple over a period of a couple years. The Internal Revenue Service has an obligation to the citizens of this country to make sure that everybody is following the tax laws of this country.

    From what I can see the Internal Revenue Service at no time used the words conservatives, liberals or progressives to single out the various ideologies of such groups. How the speaker of the House John Boehner could come on public TV and suggest that somehow the conservatives had been singled out and that somebody is going to jail is mind-boggling.
    The fact is there are lots of groups with those words in their names and it has nothing to do with a particular ideology.

    The Internal Revenue Service need to be commended for trying to make sure everyone is following the law. The Congress of the United States should be their partner in this effort not prosecuting them for doing their job.
    ~jimmy cameron~

    May 19, 2013 10:25 am at 10:25 am |
  5. It's simple, really

    Let's be clear about one thing. This is NOT a scandal. This is a manufactured controversy. And we all know who is responsible for manufacturing it.

    May 19, 2013 11:10 am at 11:10 am |
  6. Getoverit

    @Donkey Party
    All those involved in the “scandal” are Bush appointees.
    Douglas Shulman is a Democrat.....

    May 19, 2013 12:18 pm at 12:18 pm |
  7. ThinkAgain

    @Donkey Party: "Poor, insanely stupid right-wingers. All those involved in the "scandal" are Bush appointees. "

    Even if Fox made this into their lead story for a day, complete with ominous music and exploding graphics, folks on the right wouldn't believe it. They are too wedded to their delusions to consider this kind of information because if they were to consider this, their whole world would start to unravel.

    May 19, 2013 12:34 pm at 12:34 pm |
  8. Jon Samuel

    With so much corruption exposed the entire second term is going to be devoted to uncovering this mess and removing as many criminals as possible.

    May 19, 2013 01:01 pm at 1:01 pm |
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