IRS agents: Washington involved with tea party targeting

IRS commissioner: "Targeting" is a "pejorative" term
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(CBS News) WASHINGTON - CBS News obtained new information about who may have ordered IRS agents to target conservative groups.

When the Treasury Department's Inspector General Office investigated the scandal, it told Congress it couldn't figure out who was responsible.

At a hearing last month, the former acting commissioner of the IRS, Steven Miller, insisted the targeting of tea party groups was conceived and carried out by agents in Ohio without Washington knowing.

IRS commissioner: "Targeting" is a "pejorative" term
Steven Miller

"People in Cincinnati decided, 'Let's start grouping these cases. Let's centralize these cases,'" Miller said.

But congressional investigators are hearing a different story from IRS agents there. CBS News has reviewed the transcripts from some of those interviews.

One of the agents, Elizabeth Hofacre, said that starting in 2010 she was instructed to clear all the letters she sent to tea party groups seeking tax-exempt status through an IRS lawyer in Washington, D.C. She said she eventually grew so frustrated she asked to be transferred.

"I sent every case through October of 2010 for his review," she told investigators.

"And as of October 2010, how many cases had you done?" they asked.

"Roughly 40, 60, I don't remember," she said.

"Is that unusual?" they asked, "for Washington to get involved?"

"Very unusual," she replied. "I have never known of an agent to do that in the past or to this time."

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Hofacre said the applications from conservative groups sat in limbo for months as the lawyer in D.C. became slow to respond.

"All I remember saying and thinking is 'this is ridiculous,'" she said, "because at the same time, you are getting calls from irate taxpayers. And I see their point. Even if a decision isn't favorable, they deserve some kind of treatment."

Hofacre said she was angry when the top IRS officials blamed everything on IRS agents in Cincinnati.

"Oh, I was furious," she said. "My manager was working at home, so I e-mailed her the link, and she called and apologized on behalf of [former IRS official] Lois Lerner because it was- I mean, it was inaccurate, but me especially because I was involved in the processing of these in 2010, so it looked like that Lois Lerner was putting it on us."

A second Cincinnati agent named Gary Muthert said his local manager instructed him to find tea party applications and send them to D.C.

"He said Washington, D.C., wanted seven," Muthert told investigators.

"How did you decide which seven were sent?"

"Just the first seven," Muthert told them.

Congressional investigators have now interviewed about half a dozen IRS employees. CBS News was only allowed to view the transcripts from two of those interviews, but we were able to view them in their entirety. It's important to note that neither of the agents could say who at the IRS initially ordered the stepped-up scrutiny on tea party groups.

  • Nancy Cordes
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    Nancy Cordes is CBS News' congressional correspondent.