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IRS' Lerner: "I have not done anything wrong"

Updated at 12:50 p.m. ET

Before invoking her Fifth Amendment right to remain silent, Lois Lerner, the head of the tax-exempt organizations division of the IRS, proclaimed her innocence before a congressional committee Wednesday.

"I have not done anything wrong," Lerner told the House Oversight and Government Reform Committee. "I have not broken any laws. I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee."

Lerner told the committee she wanted to answer their questions about the misconduct at the IRS, but she has decided, "after very careful consideration" of her lawyer's advice, to invoke the Fifth Amendment.

"I'm asserting my right not to testify," she said. "I know some people will assume I've done something wrong. I have not. One of the basic functions of the Fifth Amendment is to protect innocent individuals."

Lerner was scheduled to testify Wednesday along with Deputy Treasury Secretary Neal Wolin; former IRS commissioner Douglas Shulman; and J. Russell George, inspector general for tax administration in the Treasury Department. Wednesday's congressional hearing was the third so far into the way the IRS, for about 18 months beginning in 2010, put undue scrutiny on conservative groups applying for tax-exempt status. Members of the Oversight Committee on Wednesday-- from both sides of the aisle -- seemed agitated and increasingly intolerant of the IRS officials who have answered to Congress for the misconduct.

According to a report on the misconduct produced by George, the inspector general, Lerner learned about the practice in June 2011. The IG report indicates that Lerner requested changes upon learning the practice of targeting conservatives. She did not share her knowledge with Congress, despite their ongoing questions about alleged harassment of tea party groups.

"I believe we are united in this committee in being outraged," Rep. Carolyn Maloney, D-N.Y., said.

Rep. Stephen Lynch, D-Mass., said that Treasury officials "basically stonewalled" the Senate Finance Committee in a hearing on Tuesday. "There will be hell to pay if that's the route we choose to go down," he said, noting that if officials refuse to answer Congress' questions, they may be compelled to appoint a special prosecutor to investigate the matter.

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Committee Chairman Darrell Issa, R-Calif., asked Lerner to reconsider invoking the Fifth Amendment, especially in light of the fact that she has given testimony under oath to the committee. Issa moved to dismiss Lerner, prompting some outcry from other committee members.

Rep. Trey Gowdy, R-S.C., said it was unfair that Lerner had the opportunity to tell her side of the story without having to answer any questions.

"That's not the way it works," he said, prompting applause from members of the public in the hearing room. "She ought to stand here and answer our questions."

Issa asked two more times for Lerner to reconsider, suggesting the committee could limit the scope of its questions. After she refused, Lerner left the hearing, though Issa said there was some question about whether she had invoked the Fifth Amendment in the proper manner. The chairman urged the committee to respect her right to remain silent.

"This is a committee that is investigating, more than anything else, the ultimate right of free speech," he said, noting that the committee should respect all of the rights established in the Constitution.

He also urged the committee to keep in mind that political discrimination within government is nothing new. "I would ask all of us to avoid to talk about who was liked by President Bush, who was liked by President Obama," he said. "Let's all be 'Republicrats' and 'Demicrans' today."

With Lerner gone, the committee instead took Shulman to task for his leadership of the IRS and for the fact that he told Congress last year that there was no political targeting happening in the agency.

Rep. Jim Jordan, R-Ohio, said his office checked the White House logs and found that Shulman visited the White House 118 times in 2010 and 2011. With that in mind, he asked Shulman if he ever talked to anyone at the White about targeting certain groups.

"Not that I remember," Shulman said.

Jordan pressed him again, "You sure you didn't talk to anyone?"

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Shulman responded, "About singling out certain groups for special scrutiny? I am absolutely sure. I certainly believe I did not have any conversations."

Shulman said he couldn't remember who he met with at the White House. Asked to describe why he would've gone there, he first responded that he attended the White House Easter Egg Roll. More seriously, he said he would have visited the White House to talk about issues like the IRS budget, general tax policy, the fiscal cliff, streamlining financial aid applications and implementing the Affordable Care Act.

Shulman added he didn't "accept the premise" that he visited the White House so many times, saying it "may or may not be true."

Delegate Eleanor Holmes Norton, D-D.C., asked George, the inspector general, if in putting together his report, he found any evidence that anyone in the White House had any involvement in the misconduct.

George said that in his audit of the IRS, his office did not ask specifically about any directions received from the White House. However, they did ask about influence from outside of the IRS. George suggested they did not find any.

George told Rep. Jackie Speier, D-Calif., that his auditing so far has not identified anyone who made the list of words like "tea party" that was used to trigger special scrutiny.

"We have had some difficulty in terms of getting clarity from IRS individuals," George said, noting that since he was only conducting an audit, the people he interviewed were not under oath. That might change, however, as investigations develop further.

Issa noted that George told him earlier that there are no "internal controls" to assure that unfair targeting isn't happening elsewhere in the IRS.

"In other words, the American people should not have confidence that this isn't an isolated incident," he said.