US lawmakers accuse IRS officials of lying in tax scandal

US lawmakers on Friday accused leaders of the Internal Revenue Service (IRS) of lying, as they opened the first in a series of investigative hearings about the tax collection agency's targeting of conservative groups.

Republicans and Democrats said senior IRS officials should have alerted Congress last year when they found out that their examiners were singling out Tea Party groups for intense scrutiny when the groups applied for tax-exempt status.

"That isn't being misled. That's lying," said Republican Dave Camp, the chairman of the House of Representatives Ways and Means Committee.

The acting head of the agency, Steven Miller, apologised for the IRS's actions and said they stemmed from poor management, rather than a partisan desire to punish conservative groups.

"I did not mislead Congress or the American people," said Miller, who was fired by US President Barack Obama on Wednesday. "I think what happened here is that foolish mistakes were made by people trying to be more efficient."

Obama, a Democrat, is racing to get in front of a scandal that threatens to eclipse his second-term agenda. He has twice appeared in public to condemn the IRS's actions and has promised to cooperate with three congressional investigations and a US Justice Department probe. He has, however, resisted demands for a special prosecutor to look into the allegations.

Republicans have angrily accused Obama's administration of using government powers to target political foes. They say the IRS scandal is one example of a federal government that has grown too large and intrusive.

"Is this still America?" asked Republican Representative Kevin Brady of Texas.

An explosion of advocacy groups
An internal IRS watchdog reported this week that IRS investigators had singled out groups that had conservative-sounding phrases such as "Patriot" and "Tea Party" in their titles when they applied for a tax-exempt status.

Such status allows groups to keep their donor lists secret while engaging in limited political activity. Political campaigns, by contrast, must make their donors lists public.

Tea Party groups say they were asked for information such as what books they read. The questioning in some cases took nearly three years, preventing certain groups from participating in the 2010 and 2012 elections.

The IRS watchdog blamed the scandal on ineffective management and bureaucratic confusion.

The IRS has seen the number of groups applying for so-called 501(c)4 status double in the wake of a January 2010 Supreme Court decision that loosened campaign-finance rules at a time when it has struggled to monitor existing tax-exempt groups.

The top Democrat on the committee, Representative Sander Levin, warned Republicans not to turn the investigation into a partisan witch hunt.

However, he noted that Lois Lerner, the IRS official who made the scandal public last week, did not bring it up when she testified in front of the committee a few days earlier.

"That is wholly unacceptable and one of the reasons we believe Lerner should be relieved of her duty," Levin said.

Two other committees, the House Oversight and Government Reform Committee and the Senate Finance Committee, also will hold IRS hearings next week.