By ALAN FRAM AND STEPHEN OHLEMACHER, THE ASSOCIATED PRESS
WASHINGTON — Lawmakers are ready to question the ousted head of the Internal Revenue Service as Congress holds its first hearing on the tougher scrutiny the IRS gave tea party and other conservative groups that applied for tax-exempt status.
With the scandal joining the parade of political headaches buffeting President Barack Obama, the Republican-run House Ways and Means Committee planned to question the agency's ousted chief, Steven Miller, on Friday.
Miller, acting director until he resigned Wednesday, seems sure to get a hostile reception from the committee. Members of both parties have spent the past week bitterly chastising the agency for abandoning its charge of making nonpolitical decisions about which groups should qualify for tax-exempt status, which makes it easier for them to collect contributions from donors.
Lawmakers also have said that despite asking the IRS repeatedly about complaints from conservative groups that their applications were being treated unfairly, the agency – including Miller – never told them the groups were being targeted, even after May 2012, when the agency said Miller was briefed on the practice. Miller was previously a deputy commissioner whose portfolio included the unit that made decisions about tax-exempt status.
Also testifying Friday was J. Russell George, the Treasury Department's inspector general for tax administration.
A report George issued this week concluded that the IRS office in Cincinnati, which screened applications for the tax exemptions, improperly singled out tea party and other conservative groups for tougher treatment. The report says the practice began in March 2010 and lasted more than 18 months.
Republicans have spent the past few days trying to link the IRS' improper scrutiny of conservatives to Obama. The president has said he didn't know about the targeting until last Friday, when Lois Lerner, who heads the IRS division that oversees tax-exempt groups, acknowledged at a legal conference that conservative groups had been singled out. She said it was wrong and apologized.
"I promise you this, that the minute I found out about it, then my main focus was making sure that we get the thing fixed," Obama said Thursday.
Even so, less than four months into his second term, the president has been on the defensive for the IRS controversy, along with questions about last September's attack in Benghazi, Libya, that killed the U.S. ambassador and three other Americans, and the government's seizure of The Associated Press' telephone records as part of a leaks investigation.
In one of the latest GOP attacks, Sen. Rob Portman, R-Ohio, wrote Obama on Thursday asking whether the White House or Treasury Department pressured the IRS on the treatment of conservative groups. In the letter, Portman accused the administration of "policies that threaten to chill disfavored political speech."
The inspector general's report said all IRS officials questioned said their actions "were not influenced by any individual or organization outside the IRS."
The report blamed "ineffective management" for letting IRS officials craft "inappropriate criteria" to review applications from tea party and other conservative groups, based on their names or political views. It found that the IRS took no action on many of the conservative groups' applications for tax-exempt status for long periods of time, hindering their fundraising for the 2010 and 2012 elections.
Many of the groups were applying for tax-exempt status as social welfare organizations, which are allowed to participate in campaign activity if that is not their primary activity. The IRS judges whether that imprecise standard is met.
Friday's hearing was just the start of Congress' probe of the IRS' actions, with the Senate Finance and House Oversight committees planning hearings next week.
In addition, Attorney General Eric Holder has said the FBI was investigating whether the IRS may have violated applicants' civil rights.
Obama has rejected the idea of naming a special prosecutor to investigate the episode, saying Thursday that the probes by Congress and the Justice Department would get to the bottom of who was responsible.
Obama has named Daniel Werfel, a top White House budget officer, to replace Miller.
Also Thursday, Joseph Grant, one of Miller's top deputies, announced plans to retire June 3, according to an internal IRS memo. Grant is commissioner of the agency's tax exempt and government entities division, which includes the agents that targeted tea party groups for additional scrutiny.
Grant joined the IRS in 2005 and took over as acting commissioner of the tax exempt and government entities division in December 2010. He was just named the permanent commissioner May 8.
When asked whether Grant was pressured to leave, IRS spokeswoman Michelle Eldridge said Grant had more than 31 years of federal service and it was his personal decision to leave.
Before he joined the IRS, Grant was a top official at the Pension Benefit Guaranty Corporation.
Grant's predecessor at the IRS was Sarah Hall Ingram, who is now director of the agency's Affordable Care Act Office. Ingram was in charge of the tax exempt division when IRS agents first started targeting conservative groups.
The IRS said Ingram was assigned to help the agency implement the health care law in December 2010, about six months before the Treasury inspector general's report said her subordinate, the director of exempt organizations, learned about the targeting.