[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
   THE IRS'S SYSTEMATIC DELAY AND SCRUTINY OF TEA PARTY APPLICATIONS

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 18, 2013

                               __________

                           Serial No. 113-51

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              PETER WELCH, Vermont
DOUG COLLINS, Georgia                TONY CARDENAS, California
MARK MEADOWS, North Carolina         STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan        MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 18, 2013....................................     1

                               WITNESSES

Ms. Elizabeth Hofacre, Revenue Agent, Exempt Organizations, Tax-
  Exempt and Government Entities Division, Internal Revenue 
  Service
    Oral Statement...............................................     6
    Written Statement............................................     9
Mr. Carter Hull, former Tax Law specialist, Exempt Organizations, 
  Tax-Exempt and Government Entities Division, Internal Revenue 
  Service
    Oral Statement...............................................    12
    Written Statement............................................    14
The Hon. J. Russell George, Inspector General, Treasury Inspector 
  General for Tax Administration, Mr. Michael McCarthy, Chief 
  Counsel, Treasury Inspector General for Tax Administration, and 
  Mr. Gregory Kutz, Assistant Inspector General for Management 
  Services and Exempt Organizations, Treasury Inspector General 
  for Tax Administration
    Oral Statement...............................................    61
    Written Statement............................................    64

                                APPENDIX

Statement of Rep. Cummings Submitted for the Record..............   126
Statement of Rep. Connolly Submitted for the Record..............   128
The Committee on Ways and Means Democrats Statement Submitted for 
  the Record by Rep. Connolly....................................   130
An IRS Document Regarding the BOLD Listing Submitted for the 
  Record by Mr. George...........................................   131
A Communication from the Head of Investgations Submitted for the 
  Record by Rep. Connolly........................................   135


   THE IRS'S SYSTEMATIC DELAY AND SCRUTINY OF TEA PARTY APPLICATIONS

                              ----------                              


                        Thursday, July 18, 2013

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 11:05 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Turner, Duncan, 
McHenry, Jordan, Chaffetz, Walberg, Lankford, Amash, Gosar, 
Meehan, DesJarlais, Gowdy, Farenthold, Hastings, Lummis, 
Woodall, Massie, Collins, Meadows, Bentivolio, DeSantis, 
Cummings, Maloney, Norton, Tierney, Lynch, Cooper, Connolly, 
Speier, Cartwright, Duckworth, Kelly, Davis, Cardenas, and 
Lujan Grisham.
    Staff Present: Alexia Ardolina, Assistant Clerk; Kurt 
Bardella, Senior Policy Advisor; Richard A. Beutel, Senior 
Counsel; Brian Blase, Senior Professional Staff Member; Will L. 
Boyington, Press Assistant; Molly Boyl, Senior Counsel and 
Parliamentarian; Lawrence J. Brady, Staff Director; David 
Brewer, Senior Counsel; Daniel Bucheli, Assistant Clerk; 
Caitlin Carroll, Deputy Press Secretary; Steve Castor, General 
Counsel; Drew Colliatie, Professional Staff Member; John 
Cuaderes, Deputy Staff Director; Brian Daner, Counsel; Linda 
Good, Chief Clerk; Tyler Grimm, Senior Professional Staff 
Member; Frederick Hill, Director of Communications and Senior 
Policy Advisor; Christopher Hixon, Deputy Chief Counsel, 
Oversight; Mark D. Marin, Director of Oversight; Kristin L. 
Nelson, Senior Counsel; Katy Rother, Counsel; Laura L. Rush, 
Deputy Chief Clerk; Scott Schmidt, Deputy Director of Digital 
Strategy; Sarah Vance, Assistant Clerk; Rebecca Watkins, Deputy 
Director of Communications; Jeff Wease, Chief Information 
Officer; Jedd Bellman, Counsel; Meghan Berroya, Counsel; Claire 
Coleman, Counsel; Susanne Sachsman Grooms, Deputy Staff 
Director/Chief Counsel; Adam Koshkin, Research Assistant; Julia 
Krieger, New Media Press Secretary; Elisa LaNier, Director of 
Operations; Jason Powell, Senior Counsel; and Dave Rapallo, 
Staff Director.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles: First, Americans have a right to know that the 
money Washington takes from them is well-spent. And, second, 
Americans deserve an efficient, effective government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect those rights.
    Our solemn responsibility is to hold government accountable 
to taxpayers, because taxpayers have a right to know what they 
get from their government. It's our job to work tirelessly, in 
partnership with citizen watchdogs, to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    Today's hearing particularly touches on taxpayers and what 
taxpayers should expect from their government. It continues the 
committee's investigation into the IRS's inappropriate 
treatment of groups applying for tax-exempt status. It is now 
our understanding that some of those groups were 501(c)(3)s, 
groups for whom you receive a tax deduction if you give, and 
that the vast majority were 501(c)(4)s, groups for whom you do 
not receive a tax deduction for your contribution but who do 
not pay the same corporate taxes on that income.
    This scandal first came to light via a planted question, 
directed at Lois Lerner's request, at the American Bar 
Association event on May 10th. Prior to the planting of that 
question, designed to obstruct the truth about targeting and 
break the news to a sympathetic audience that Friday afternoon, 
this committee had worked with our Inspector General for 
Treasury for more than 10 months. Multiple committees of the 
House of Representatives had wanted answers, had sought 
answers, and were waiting on those answers.
    In response to the planted question, Lois Lerner blamed the 
inappropriate IRS activities of line people in Cincinnati. The 
IRS hoped it would--we believe the IRS hoped this would make 
the scandal quickly dissipate. It did not. And, in fact, today 
we are going to hear from one of those line employees in 
Cincinnati. But our committee has heard from many of those line 
employees. We have also begun hearing from people they reported 
to or exchanged information with in Washington.
    Sadly, the White House press secretary continues a 
narrative characterizing it as ``inappropriate conduct by IRS 
officials in Cincinnati.'' Today's hearing needs to dispel that 
so we can begin following the witnesses and following the 
testimony and following the truth wherever it leads.
    We are now convinced and we will hear testimony that, as 
the Inspector General found in his investigation/audit, what 
began in Cincinnati with one case of a Tea Party application 
soon was, in fact, in Washington at levels well above line 
employees. They stated the assertions--the assertion Cincinnati 
was to blame were absurd, and we will hear that today. More 
importantly, it is now understood that these files, these 
hundreds of files were in many, many hands, most of whom--many 
of whom were not in Cincinnati.
    As we look for the truth, let us bear in mind that we can 
debunk many things along the way. We will probably never debunk 
all accusations, nor should we make accusations unless 
testimony and evidence takes us there.
    We can today, I believe, debunk the accusations that 
Cincinnati was, in fact, the source or that it didn't go to 
Washington, which it clearly did. Particularly when we hear 
from the Honorable Russell George, the IG who brought us this, 
and his staff, I think we're going to find out more, within the 
limits of his ability to tell us.
    I certainly want to make sure that the smear stops here 
today. I want to caution the ladies and gentlemen on both sides 
of the aisle here: We will work with what we know, and we will 
work to find out what we do not know. And I, for one, and I 
hope everyone on both sides of the dais will reject 
categorically assumptions for which there is not evidence.
    It is difficult to say who should have come forward first. 
We know one thing: Conservative groups came forward with their 
accusations more than 10 months ago, and they were heard. We 
know that, in fact, Members of both parties sent letters to the 
IRS, and I believe that is an important area that this 
committee cannot overlook.
    Everything we have learned of real substance begins with 
Mr. George's impartial, independent investigation of IRS 
treatment of tax-exempt organizations and the targeting of them 
since March of 2010. Our investigation will continue.
    I hope that both my side of the aisle and the ranking 
member's side of the aisle will be very careful and cautious in 
what we say. When I say something goes to the Office of the 
Counsel of the IRS, that is not to be construed as the Office 
of the President or to the counsel himself. It is important 
that we understand that words matter, nuances matter, and that 
we not go one step beyond what we know.
    What we do know today and what I believe we are going to 
hear is that, in fact, Washington made a catastrophic mistake 
in taking what would have been in the ordinary course an 
individual, one by one application, evaluating them, as Mr. 
Hull has done for 48 years, accepting them, denying them, or 
asking for more information, and not looking at them as a group 
with some sort of special cynicism. That's not what America 
expects. America does not expect people targeted as groups.
    One of the questions I will ask today will be, if they were 
fairly evaluated, wouldn't some of these cases have been 
resolved if they were not lumped into a group? I may not get an 
answer today, but I will not cease until I get that answer.
    Lastly, there have been accusations leveled against the 
Inspector General and the work that he has done and his team 
has done. This committee is the most important place to resolve 
that. We have oversight over all the inspector generals, we 
control the legislation that created the position, and we take 
seriously accusations about their independence. We will 
investigate it, but, as of right now, we stand solidly behind 
the best efforts of all our inspector generals. If a credible 
accusation occurs, we will take it up.
    Lastly, Mr. Ranking Member, I want to make sure that I make 
something clear. You're frustrated about 6103 and its 
interpretation, and you've made that clear. I'm frustrated 
about it. I believe this committee must ensure that the fair 
interpretation of this law designed to protect taxpayers' 
confidential information is, in fact, not used to re-victimize 
people who have previously been victimized. And I will work 
with the ranking member and anyone else to make sure we protect 
victims from being kept from finding out what actually happened 
to them and the public as appropriate.
    With that, I recognize the ranking member.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Let me be very clear. We come today to seek the truth, the 
whole truth, and nothing but the truth, so help me God.
    Eight weeks ago, on May 22nd, we met in this room to hear 
testimony about a report from the Inspector General about the 
IRS's review of groups applying for tax-exempt status. At the 
time, there was justifiable outrage, including from me, about 
the inappropriate search terms used to screen these groups and 
the unacceptable delays they endured.
    On this side of the aisle and I know the other side of the 
aisle, we are not only concerned about conservative groups, we 
are concerned about all groups and all individuals who have 
anything to do with the IRS.
    Since that hearing, Republican politicians and commentators 
have engaged in a sustained and coordinated campaign to accuse 
the President and the White House of using the IRS to target 
Tea Party groups for partisan, political purposes without any 
evidence to support these claims.
    Our chairman led the charge, saying this was, ``targeting 
of the President's political enemies.'' Other Republicans 
followed suit. They cited, ``the enemies list out of the White 
House.'' They argued that President Obama, ``doesn't have clean 
hands.'' They invoked the specter of disgraced former President 
Richard Nixon.
    The fact is that there is no evidence before this committee 
to support these claims--none. Two days ago, I issued a memo 
finding that since the chairman and other Republicans first 
began making these accusations, the committee has identified no 
evidence whatsoever--documentary, testimonial, or otherwise--to 
substantiate them.
    I ask that this memo be entered into the record at this 
time, Mr. Chairman.
    Chairman Issa. Without objection, so ordered.
    Mr. Cummings. Committee staff now has conducted--and that's 
bipartisan committee staff--have now conducted 16 transcribed 
interviews of IRS employees in Cincinnati and Washington, D.C. 
We did another one just Tuesday. And none of them reported any 
White House involvement or political motivation, including six 
who identified themselves as Republicans and who the chairman 
chose not to invite today.
    To the contrary, these employees indicated that they sought 
guidance on how to process these applications in a consistent 
manner according to the law. For example, a tax law specialist 
in Washington, D.C., one who identifies herself as a 
Republican, called the accusations made by the chairman, 
``laughable.'' She explained, ``This is purely cases that 
unfortunately Cincinnati didn't have enough guidance on, that 
the (c)(4) area is a very, very difficult area and there is not 
much guidance.'' This is what she said. ``And so the lingering 
length of time, unfortunately, was just trying to apply the law 
to the specific facts of each case.'' I didn't say that. She 
said it.
    Yet even today, this very morning, the chairman is still 
pedaling this claim. In an op-ed appearing in USA Today, he 
asked the question, ``Was the targeting of the Tea Party 
applicants directed from the White House or somewhere else 
outside the IRS? As our investigation is ongoing, the 
responsible answer is that judgment should be withheld.''
    This is unsubstantiated nonsense. It undermines the 
committee's integrity and every Member of this body's 
integrity, and it destroys the committee's credibility. The 
chairman certainly did not withhold judgment. He rushed to it 
with no evidence whatsoever. The responsible answer is that we 
have no evidence at all to back up that claim.
    Since our previous hearing 8 weeks ago, we have also 
obtained new documents that raise serious questions about the 
Inspector General's report. And I'm glad to hear that the 
chairman stands by the Inspector General, and I do too. But I'm 
very interested, as he would be, to know certain questions that 
we will be asking, and I'm encouraged that he has agreed to 
come back in today in order to address them directly.
    And I want to thank you, Mr. Chairman, at my request, for 
bringing him back.
    We must have an independent, transparent IG. It is so very, 
very important, because we all depend on his word.
    For example, the Inspector General failed to disclose, Mr. 
Chairman, to this committee that he tasked his top investigator 
with reviewing 5,500 emails from IRS employees. After 
conducting this review, this official concluded, ``There was no 
indication that pulling these selected applications was 
politically motivated.''
    I want to ask the Inspector General why he did not disclose 
this significant information when he testified on May 22nd, 
just as I railed against Mr. Shulman for not coming back to 
this committee to let us know what he may have found out.
    I also want to ask the Inspector General why he was unaware 
of documents we have now obtained showing that the IRS 
employees were also instructed to screen for progressive 
applicants and why his office did not look into the treatment 
of left-leaning organizations, such as Occupy groups. I want to 
know how he plans to address these new documents. Again, we 
represent conservative groups on both sides of the aisle, and 
progressives and others, and so all of them must be treated 
fairly.
    Finally, I want to ask the Inspector General about some 
very, very troubling testimony we heard yesterday from the 
acting head of the IRS, Daniel Werfel. Mr. Werfel testified 
that the IRS was about to produce unredacted documents to the 
committee last week that include references to additional 
categories of non-Tea Party groups, but the Inspector General 
personally--personally--intervened to block the IRS from 
producing this information to this committee. According to Mr. 
Werfel, no IRS officials he consulted could ever recall such an 
unprecedented intervention. We need to know why that was.
    And, finally, Mr. Chairman, I'm not here today to attack 
anyone. I'm here to get to the truth--not a partial or a 
selective truth, but the whole truth. I believe that that 
should be the goal of everyone in this room. We do need to stop 
making baseless accusations, and we need to get full 
information, and I emphasize ``full,'' about the treatment of 
all these groups--conservatives, liberals, everyone in between. 
And I sincerely hope that we can do that today.
    And, with that, Mr. Chairman, I yield back.
    Chairman Issa. I thank the gentleman.
    Chairman Issa. All Members will have until the end of the 
day to submit their written statements.
    Chairman Issa. And we now welcome our first panel of 
witnesses.
    Ms. Liz Hofacre is the revenue agent in Exempt 
Organizations, Quality Assurance in the Cincinnati office of 
the Internal Revenue Service. That's a mouthful for any 
chairman.
    And Mr. Carter Hull was a senior tax law specialist at the 
Exempt Organizations Technical Unit in Washington, D.C., and 
was with the Internal Revenue Service for an astounding 48 
years of service.
    And we want to thank you for your service.
    Pursuant to the committee rules, I'd ask you please both 
rise to take the oath and raise your right hands.
    Do you solemnly swear or affirm the testimony you are about 
to give will be the truth, the whole truth, and nothing but the 
truth.
    Ms. Hofacre. Yes, I do.
    Mr. Hull. I do.
    Chairman Issa. Please have a seat.
    Let the record reflect that both witnesses answered in the 
affirmative.
    I know that sometimes prepared statements are the best way 
to go, and I'm not going to dissuade you from it, but use your 
5 minutes in any way you want. You can abbreviate your 
statements if you think it's appropriate in light of opening 
statements or for any other reason to add, you may.
    I will not hold you to exactly 5 minutes, but when you see 
the countdown getting close, please wrap up.
    Ms. Hofacre?

                 STATEMENT OF ELIZABETH HOFACRE

    Ms. Hofacre. Chairman Issa, Ranking Member Cummings, and 
members of the committee, since 1999 I have been an IRS 
employee in the Office of Exempt Organizations, EO 
Determinations, in Cincinnati. As of April of 2010, my position 
was an EO Determinations specialist.
    At the time, I had been assigned to serve as the emerging 
issues coordinator. In this role, I was tasked with handling 
applications that had been identified as emerging issues. In 
late April, I was assigned by my supervisor to handle all 
applications that had been identified as applications by Tea 
Party groups applying for 501(c)(3) or 501(c)(4) exemption 
status. Initially, around April 30th, 2010, approximately 20 
Tea Party applications were assigned to me. Subsequently, I 
received a steady flow of Tea Party applications.
    There were occasions when other agents sent to me 
applications from liberal or non-Tea-Party-type groups. When 
that occurred, pursuant to the instructions that had been given 
to me, I would send those application to general inventory, 
since they were not within the scope of the Tea Party emerging 
issue.
    Around the same time that these applications were assigned 
to me, I also learned that two Tea Party applications had been 
assigned to Carter Hull in EO Technical in Washington, D.C. I 
was told that I was to coordinate the review of these 
applications assigned to me with Mr. Hull.
    I called Mr. Hull. He sent me the development letters that 
he had prepared for the applications assigned to him to use as 
examples for my applications. Mr. Hull requested that I send to 
him drafts of the development letters I was writing for my 
applications, and he subsequently asked me to send him copies 
of the applications as well.
    At the beginning of the process, when I sent my draft 
development letters to Mr. Hull, he would call me with 
suggested edits to the letters. I would make the edits and send 
them to the applicant--send them to the applicants. When I'd 
receive responses from the applicants, I notified Mr. Hull, who 
asked that I send copies of the responses to him as well. I do 
not remember how many such responses I received. I would 
estimate 15 to 25.
    At no point did I receive any guidance from Mr. Hull or 
anyone else as to what to do with these responses. Similarly, 
beginning sometime in the summer of 2010, when I sent draft 
development letters to Mr. Hull, I received no guidance from 
him or anyone else at EO Technical as to those letters.
    In my experience, this was a highly unusual process. I 
never before had to send development letters that I had drafted 
to EO Technical for review, and I never before had to send 
copies of applications and responses that were assigned to me 
to EO Technical for review. I was frustrated because of what I 
perceived as micromanagement with respect to these 
applications.
    I also received numerous calls from applicants asking about 
the status of their applications. I was only able to tell those 
applicants that their applications were under review. I became 
very frustrated because I had--because until I received 
guidance from EO Technical, I was unable to process these 
applications.
    I expressed my concerns to both Mr. Hull and my supervisor 
at the time, Steve Bowling. As a result of this frustration, in 
July of 2010 I applied for a transfer to Quality Assurance, and 
in October 2010 I received the requested transfer.
    When that occurred, these cases that I had assigned were 
reassigned to another agent. To the best of my recollection, I 
had a total of 40 to 60 Tea Party cases assigned to me at that 
time.
    In July and August 2010, I attended several meetings with 
Mr. Bowling and another manager, Jon Waddell, at which I was 
informed of the creation of the BOLO list. They told me that 
the purpose of this list was to consolidate into a single 
document all the instructions that agents received about 
certain applications. The BOLO list was a new tab that was 
added to an existing spreadsheet that had other descriptions of 
groups and instructions to agents.
    In August 2010, Mr. Waddell told me the language that 
should be added to the BOLO list with respect to Tea Party 
groups. After adding the language, I sent the document first to 
Mr. Waddell for his review. Mr. Waddell then told me to send 
the document to Cindy Thomas and a couple of other managers.
    A few days later, he told me to email the list to everyone 
else in EO Determinations in Cincinnati. I accidentally emailed 
the list to everyone in Rulings and Agreements, including 
agents in Washington, D.C.
    Since October 2010, I have had no direct involvement in the 
processing and review of Tea Party applications, aside from 
occasionally reviewing them in the course of my quality 
assurance responsibilities.
    In December 2011 and January 2012, I attended two to three 
meetings regarding the creation of a team to process Tea Party 
applications that had been held awaiting guidance. I provided 
this group with development letters that I had drafted in 2010.
    I had no role in the processing of Tea Party applications 
following those meetings.
    Chairman Issa. Thank you.
    [Prepared statement of Ms. Hofacre follows:]
    [GRAPHIC] [TIFF OMITTED] 82435.001
    
    [GRAPHIC] [TIFF OMITTED] 82435.002
    
    [GRAPHIC] [TIFF OMITTED] 82435.003
    
    Chairman Issa. Mr. Hull?

                    STATEMENT OF CARTER HULL

    Mr. Hull. Chairman Issa, Ranking Member Cummings, and 
members of this committee.
    As of the spring of 2010, I was employed by the IRS as a 
tax law specialist in the Exempt Organizations, EO, Technical 
in Washington, D.C.
    In April of 2010, I was assigned by my supervisor to work 
on two applications from Tea Party groups. In that same month, 
I became aware that a group of Tea Party applications were 
being held by EO Determinations in Cincinnati. It was my 
understanding that the applications assigned to me were to be 
test cases to provide guidance for others--other applications. 
I was also told by my supervisor that I was to coordinate the 
review of the Tea Party applications that were assigned to 
Elizabeth Hofacre in Cincinnati.
    With respect to the two applications assigned to me, I 
reviewed the application materials and I sent out initial 
development letters to the applicants. When one of those 
applicants did not respond, the file was closed, and I was 
assigned another Tea Party application to replace it.
    As part of my review, I also researched determinations that 
had been made with respect to previous applications by groups 
applying for tax-exempt status that had similar indications of 
potential political activity. Throughout this process, I spoke 
to my reviewer, Elizabeth Kastenberg, about these cases.
    At some point, and I do not have a clear memory as to when, 
I made conclusions as to how the applications assigned to me 
should be determined, and I subsequently drafted documents 
stating my recommendations and analysis. I am constrained from 
saying more about these applications due to prohibitions 
regarding the disclosure of taxpayer information.
    I discussed my recommendations with Ms. Kastenberg, and she 
suggested I forward the recommendations to Judy Kindell, who 
was at that time a senior technical advisor to Lois Lerner. I 
later had a meeting with Ms. Kindell and Ms. Kastenberg in 
March of 2011, at which Ms. Kindell told me to forward my 
recommendations to the Office of Chief Counsel for their 
review.
    While this process was going on, I also received draft 
development letters from Mrs. Hofacre. In order to assess the 
appropriateness of the questions that she had drafted for the 
applications assigned to her, I asked Ms. Hofacre to send me 
copies of the applications as well. I gave Ms. Hofacre 
suggestions regarding her letters over the telephone. I also 
asked her to send me the responses to the letters that she 
received. However, I was not able to give her guidance on those 
responses because the review of the test cases assigned to me 
had not been completed. At some point, I stopped giving Mrs. 
Hofacre feedback regarding draft development letters for the 
same reason.
    During this period of time, at the request of my 
supervisor, I prepared sensitive case reports on a monthly 
basis regarding the Tea Party applications. In October 2010, at 
the request of EO Technical Manager Michael Seto, I also wrote 
a memorandum to EO Director Holly Paz that described the 
coordination of the Tea Party cases in Cincinnati. I attached a 
list of all the Tea Party cases that I had received from Ms. 
Hofacre.
    In the summer of 2011, I recall attending two meetings 
relating to the Tea Party applications. In July 2011, I 
attended a meeting at which Mrs. Lerner, Ms. Paz, Mr. Seto, Ms. 
Kindell, Mrs. Kastenberg, and someone from Chief Counsel's 
Office were present. Ms. Lerner led the meeting, and she 
instructed everyone that the applications should be referred to 
as ``advocacy'' applications and not ``Tea Party'' 
applications.
    In August 2011, I attended a meeting at which the 
applications assigned to me were discussed. I recall that Don 
Spellmann, David Marshall, and Amy Franklin from Chief 
Counsel's Office were at the meeting, as well as tax law 
specialists Justin Lowe, Hilary Goehausen, and Ms. Kastenberg.
    I recall that Ms. Franklin or someone else from Chief 
Counsel's Office stated that more current information was 
needed for my applications and that a second development letter 
should be sent to the applicants.
    I also recall a discussion about the creation of a template 
development letter for Tea Party applications. I expressed my 
opinion that a template was not a good idea, as there was a 
great deal of variance among the groups and each application 
needed to be developed according to its particular facts and 
circumstances.
    After the August 2011 meeting, the applications assigned to 
me were transferred to another tax law specialist, Ms. 
Goehausen. After the applications were transferred, I had no 
further involvement with respect to the Tea Party applications.
    Thank you.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Hull follows:]
    [GRAPHIC] [TIFF OMITTED] 82435.004
    
    [GRAPHIC] [TIFF OMITTED] 82435.005
    
    [GRAPHIC] [TIFF OMITTED] 82435.006
    
    Chairman Issa. I'm going to start with a round of 
questions. Mostly, these are pretty much ``yes'' or ``no,'' if 
at all possible.
    Ms. Hofacre, is it true that you were unable to close any 
Tea Party cases because you were waiting on guidance from Mr. 
Hull?
    Ms. Hofacre. Yes.
    Chairman Issa. Mr. Hull, why were you unable to give Ms. 
Hofacre guidance she needed? And I guess I will abbreviate it 
by saying, were you--were you waiting on answers from Chief 
Counsel and Lois Lerner, and is that effectively what your 
opening testimony said?
    Mr. Hull. I was awaiting word from Chief Counsel----
    Chairman Issa. Mic.
    Mr. Hull. I was awaiting word from Chief Counsel as to how 
to proceed.
    Chairman Issa. Thank you.
    Mr. Hull, you testified that you made recommendation in 
these cases; is that correct?
    Mr. Hull. That is correct.
    Chairman Issa. And under some caution of 6103, you're not 
prepared to tell us your recommendations at this time; is that 
correct?
    Mr. Hull. I'm prepared to tell you that one was an 
application that I was saying should be exempt--should be 
recognized as exempt, and one was an application I said that 
should be denied.
    Chairman Issa. Okay. So there were applications recommended 
``yes'' and applications recommended ``no.'' Were those heeded, 
to your knowledge? In other words, did they agree with your 
recommendation and act on it, or did they not act on it?
    Mr. Hull. It was after that time that I was told additional 
information was needed on those cases.
    Chairman Issa. So it's fair to say that when you 
recommended a ``yes,'' you got told, ``Go get more 
information''?
    Mr. Hull. Correct.
    Chairman Issa. Mr. Hull, you have 48 years of experience. 
Throughout those 48 years, did you ordinarily, for similar 
cases to the ones you're speaking, have enough facts to close 
these cases, and were you often overruled in those decisions?
    Mr. Hull. I don't recall that I was overruled, sir. I'm not 
sure. It goes back a long way. I can't say for certain.
    Chairman Issa. And with your 48 years of experience, your 
recommendation was that these cases should be treated as 
individuals, but, in fact, they were treated as a group, over 
your recommendation; is that correct?
    Mr. Hull. I recommended each organization as I saw fit, 
those two organizations.
    Chairman Issa. Thank you.
    Could we put up the slide?
    Okay. Mr. Hull, Mr. Seto, one of your superiors in 
Washington, told the committee staff that Lois Lerner sent him 
an email saying that--said, ``These cases need to go through'' 
a--and the ``a'' is out, but--a ``multitiered review, and they 
will eventually have to go to Ms. Lerner's senior advisor and 
the Chief Counsel's Office.''
    Is this consistent with the instructions you received?
    Mr. Hull. I don't ever recall seeing that memo, sir.
    Chairman Issa. Well, but is it consistent with the 
instructions you believe you received?
    Mr. Hull. Yes.
    Chairman Issa. In your experience, is that unusual?
    Mr. Hull. Yes, that is unusual.
    Chairman Issa. Particularly the multitiered process of, 
essentially, belt and suspenders; is that correct?
    Mr. Hull. Oftentimes there was more than one reviewer, but 
multitiered is unusual.
    Chairman Issa. Ms. Hofacre, to your knowledge, do you know 
of anyone that you would say, in your opinion, had political 
motives in the role of treating of Tea Party groups?
    Ms. Hofacre. No, I do not.
    Chairman Issa. Mr. Hull, do you know, to your personal 
knowledge, of anyone in Washington--obviously, I was asking Ms. 
Hofacre primarily Cincinnati--but in Washington or Cincinnati, 
for either of you, that you know had political motives against 
the Tea Party groups?
    Mr. Hull. No, sir.
    Chairman Issa. Do you have any personal knowledge of Lois 
Lerner's politics, activities, or motives?
    Mr. Hull. No, sir.
    Chairman Issa. Lastly, one of the challenges that we have 
here is determining whether or not specifically there was 
special treatment, in your knowledge, of Tea Party groups.
    And, Ms. Hofacre, you've said you only worked on Tea Party 
groups; is that correct?
    Ms. Hofacre. In 2010, that is correct.
    Chairman Issa. Okay. So, at that time, your experience is 
that the special treatment that you experienced was 
specifically related to groups who had been gathered--some 298 
is the number we have during the entire--the tenure, and 471 to 
date--for special treatment. Is that correct?
    Ms. Hofacre. Yes, that is correct.
    Chairman Issa. Mr. Hull, you have 48 years of service, and 
I can't say that enough without realizing what a unique, long 
career that is.
    Can you give us a single valid reason for groups to be 
lumped together and not granted for this long period of time? 
Realizing you didn't look at all of these, but can you give us 
a reason where, in history, you'd seen that kind of lumping 
together of people, primarily 501(c)(4)s, and the kind of 
delays, this nearly 3-years delay and still counting?
    Mr. Hull. I don't think I could answer that question, sir.
    Chairman Issa. But you don't have any experience of seeing 
it before?
    Mr. Hull. I have no experience--no.
    Chairman Issa. Thank you.
    We now go to the ranking member.
    Mr. Cummings. Thank you very much.
    To you, Ms. Hofacre, and to you, Mr. Hull, before I begin, 
I want to take a moment to thank you, Ms. Hofacre, for your 14 
years of service, and to you, Mr. Hull, for your 48 years.
    And I know this can be--this is a tough environment to be 
in.
    You're retired, Mr. Hull?
    Mr. Hull. Yes, sir.
    Mr. Cummings. And I'm sure there are a lot of things you'd 
rather be doing. Amen.
    And to you, Ms. Hofacre, I want you to understand, as I 
said to both of you, that we're simply seeking the truth. 
That's all.
    I'm sure--I'm sure you would--let me just go back to one 
thing. The chairman invited only two of you today, and he 
didn't invite any of the other 14 IRS employees who were 
interviewed, even though they could help provide a more 
complete explanation of what occurred. At any rate, I just want 
you to answer the questions as best you can, and that's all we 
can expect.
    So, Ms. Hofacre, let me start with you. Since the IG 
released his report, we've been hearing over and over again 
from the Republicans that the Obama administration and the 
White House were responsible for the, ``targeting,'' of Tea 
Party groups for political reasons. Even the chairman's op-ed 
this morning in USA Today continues to raise questions about 
whether the White House, ``directed,'' the targeting.
    Chairman Issa. Would the gentleman yield?
    Mr. Cummings. Of course. I want to say, I need my time.
    Chairman Issa. Yes.
    Mr. Cummings. Okay. Stop the clock.
    Chairman Issa. We'll hold----
    Mr. Cummings. Yes.
    Chairman Issa. I would hope that you're not linking the 
two. I have never said that it was the President. I've never 
said that he directed it. And, certainly, my questions in an 
op-ed were posed as questions, not as conclusions.
    Mr. Cummings. Very well. If you would----
    Chairman Issa. Thank you.
    Mr. Cummings. --let me finish----
    Chairman Issa. Thank you.
    Mr. Cummings. --you will see that I'm just stating the 
facts.
    This is despite the fact that the committee has already 
conducted 16 interviews, reviewed thousands of documents, and 
found no evidence of White House involvement. This is also 
despite the fact that the Inspector General identified no 
evidence of White House involvement during his office's 
interviews or email searches.
    Hearing this sustained focus on this supposed involvement 
of the White House, however, I have no choice but to ask about 
your personal knowledge about whether the White House was 
involved.
    Ms. Hofacre, let me start with you. During your transcribed 
interview with the committee staff, you were asked this 
question: Are you aware of any--aware of any political bias by 
employees in the Cincinnati office against Tea Party 
organizations? And you responded; ``No, I am not.'' Is that 
correct?
    Ms. Hofacre. Yes, sir, that is correct.
    Mr. Cummings. And you still stand by that?
    Ms. Hofacre. Yes, sir.
    Mr. Cummings. You also were asked this question: ``Are you 
aware of any political motivations behind the development and 
screening and grouping of Tea Party cases.'' And, again, you 
responded that, ``No, I am not.'' Is that correct?
    Ms. Hofacre. Yes, sir, that is correct.
    Mr. Cummings. And is your testimony the same today?
    Ms. Hofacre. Yes, sir.
    Mr. Cummings. Okay. So based on your own personal 
experience, did you ever receive direction from anyone in the 
White House concerning your handling of the Tea Party 
applications?
    Ms. Hofacre. No, sir, I did not.
    Mr. Cummings. You know, we heard exactly the same thing 
from--just to let you know, we heard the same thing that you 
just said from every single person we interviewed, 16 of them, 
of you all. So I don't understand why this keeps--these 
allegations keep cropping up.
    Ms. Hofacre, Senator Mitch McConnell recently released a 
video that was paid for by his political campaign, and I would 
like to read what it says. ``I don't know about you, but I 
think that the leader of the free world and his advisors have 
better things to do than dig through other people's tax 
returns. What they are trying to do is intimidate donors to 
outside groups that are critical of the administration. They've 
got the IRS, the SEC, and other agencies going after their 
contributors.''
    Ms. Hofacre, you have basically already answered this 
question, but do you have any knowledge, personal knowledge, of 
the President digging through, the White House digging through 
other people's tax returns?
    Ms. Hofacre. No, I do not have any personal knowledge.
    Mr. Cummings. Do you have any knowledge?
    Ms. Hofacre. No, sir, I have none.
    Mr. Cummings. And so, again, I want to thank you all for 
being with us today. There has been no greater defender of 
public employees. I know that, in the great words of one of my 
favorite theologians, Swindoll, he says, so often the great 
things that people do are unknown, unseen, unappreciated, and 
unapplauded. I take this moment to thank you for what you have 
done, what you continue to do, and thank you for being great 
public servants.
    Thank you.
    Chairman Issa. Thank you.
    We now go to the gentleman from Ohio, Mr. Turner. If----
    Mr. Turner. I'll yield the chairman 30 seconds.
    Chairman Issa. Yeah, just very briefly, just to maybe tell 
a story.
    You know, the amazing thing is I keep saying, it wasn't in 
Cincinnati if we see it leading to Washington. We now today see 
it leading to Washington. It reminds me that, although I expect 
the right to say it immediately leads to the White House, I'm 
always shocked when the ranking member seems to want to say, 
like a little boy whose hand's caught in the cookie jar, ``What 
hand? What cookie?''
    I've never said that it leads to the White House. We've 
gone out of our way to say, we're following the facts where 
they lead. So, hopefully, when these kind of statements come 
up, people will understand we're following the facts. They 
undeniably now lead to Washington, to the offices of Lois 
Lerner and to the counsel. And that's what we're saying here 
today.
    Mr. Cummings. Mr. Chairman?
    Chairman Issa. I thank the gentleman for yielding. Yield 
back.
    Mr. Turner. This is my time now.
    Thank you. Mr. Cummings was attempting to interrupt.
    Let me say this first before I ask you both questions. I 
know that neither of you have any direct, personal knowledge of 
whether the President of the United States had lunch yesterday. 
And Mr. Cummings can ask you whether or not the President of 
the United States had lunch, and neither of you will have 
personal information. It doesn't mean he didn't have lunch; it 
means you don't know. And we knew that already when you were 
here. So asking questions that we know you're not here to prove 
or have information about really is irrelevant to our 
discussion.
    But I want to ask both of you about, you know, what we've 
heard so far in this testimony previously. I want to thank both 
of you, because you're coming forward and being honest. Because 
there are those who not only want to stick their heads in the 
sand but who don't want us to find out the answers. And both of 
you are standing here telling the truth and honestly telling us 
what happened. And one of those truths is that this was not 
just directed out of Ohio.
    Now, Ms. Hofacre, I'm from Dayton, Ohio, just a few miles 
from you. So I was kind of personally offended when it was 
placed as a label, as a bunch of rogue employees in Cincinnati. 
Because what we now know from you and Mr. Hull definitively, 
under oath, is that that was not true. If we had stopped this 
investigation previously, we would just have the answers of the 
IRS that this was some rogue employees from Cincinnati.
    Ms. Hofacre, how did you feel when they said that, when you 
knew that that was not the case that it was just rogue agents 
down in Cincinnati?
    Ms. Hofacre. Sir, I was deeply offended. I mean, it 
impugned my reputation and the reputation of other agents and 
basically all Federal employees.
    Mr. Turner. Mr. Hull, you've had a great career, dedicated 
to what we know is one where we have some people who execute 
things honestly and with detail. You've dedicated yourself to 
the principles of that.
    How did you feel when you heard that they were saying it 
was just Cincinnati, when you knew that also was not the case 
from your involvement?
    Mr. Hull. I didn't feel that I had anything to say, sir.
    Mr. Turner. Well, I know you would--it would seem to me 
that you would feel, as Ms. Hofacre, that since you were 
dedicated to making certain that the truth occurred, that these 
things were executed, that it also violated your sense of, 
really, integrity.
    I want to ask both of you, have either of you been 
contacted by the Department of Justice or the FBI to be 
questioned about this matter?
    Ms. Hofacre?
    Ms. Hofacre. Yes, I have.
    Mr. Turner. Who were you contacted by, Department of 
Justice or FBI?
    Ms. Hofacre. I believe both.
    Mr. Turner. Mr. Hull?
    Mr. Hull. Yes, I was contacted by the Department of 
Justice.
    Mr. Turner. I'm glad to hear that, because one of the 
questions that we have had from the very beginning is that this 
should not merely be an issue of the IRS, through Lois Lerner 
issuing an apology, but that the American public should never 
be afraid of the investigative arms of their government being 
turned against them. And criminal laws should be enforced to 
ensure that that doesn't happen. And, to the extent that there 
are not criminal laws, they should be enacted.
    I have a bill, 1950, that would make this a specific crime. 
We certainly are hopeful that, as the Department of Justice and 
the FBI looks into this, that they don't merely just stop and 
stick their heads in the sand, as some of those wish that we 
would do, but they would actively look at all the aspects of 
this to make certain that we can hold people accountable and 
make certain that this doesn't happen again.
    Mr. Hull, when--you had said that this was different, that 
this was not what your experience had been before. You said, I 
can't recall that--it ever happening, but it may have--that 
you'd been overturned or that things had this type of delay.
    Is there a process by which you could, and/or an inquiry as 
to, ``This is unusual,'' that you might have been able to 
report to supervisors or record that this process was unusual 
and, therefore, you know, by you, needed additional scrutiny?
    Mr. Hull. I don't believe that was any part of my--my 
duties, sir.
    Mr. Turner. Say that again?
    Mr. Hull. This was not part of my duties, to complain about 
what the review process should be.
    Mr. Turner. Okay. So you would not, then, have a forum by 
which to say, ``This is of a concern,'' and have someone else 
review the fact that you were being reviewed?
    Mr. Hull. I--as a tax law specialist, any suggestion that I 
had a determination on would go to a reviewer, and the reviewer 
would either agree with me or disagree with me, whereupon we 
would have a discussion about it. Further review is very--
beyond that, is very rare. But it did happen in--in this 
particular case.
    Mr. Turner. Thank you both for your honesty.
    Mr. Chairman?
    Chairman Issa. I thank the gentleman.
    We now go to the--oh, the gentleman, Mr. Lynch, is gone--
the gentleman from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    And thank you both for being here.
    I must say, I agreed with the opening statement of our 
distinguished chairman. I listened carefully to what he said: 
We should not rush to judgment. Words mean something. We need 
to be careful.
    And if only those very commonsensical principles had been 
at work when the very same chairman called the press secretary 
of the President of the United States a paid liar. ``Rush to 
judgment?'' ``Words mean something?''
    He took time just now to insist that the ranking member is 
wrong in suggesting that he had rushed to judgment and 
deliberately took what now turns out to be not much of a 
scandal--bad judgment; balanced, they went after progressives 
as well as conservatives. And it's a terrible thing when the 
narrative we've got in our heads just doesn't quite work out 
because the facts don't back them up and witnesses we call to 
back them up turn out to be flawed.
    Not you.
    But----
    Chairman Issa. Would the gentleman yield?
    Mr. Connolly. I will in a second, Mr. Chairman.
    But--but I--in fact--in fact, before I yield, I'd read back 
a quote from the chairman on national television, because he 
just assured us that he never linked the President to this. And 
I'd read this quote: ``This was the targeting of the 
President's political enemies, effectively, and lies about it 
during the election year so that it wasn't discovered until 
afterwards.''
    Now, that's the narrative. And there's no evidence, 
including from these two witnesses today, that that's true.
    So when the chairman cautions us correctly to withhold 
judgment, to be careful, words mean something, I wonder whether 
the chairman wants to retract his own statements, including 
that one I just read on television.
    Mr. Chairman, I yield.
    Chairman Issa. I thank the gentleman.
    I look forward to seeing evidence that progressive groups 
were treated equally harshly, delayed, and anything more than 
looked at.
    But I will say this: I think it's fair to say today that, 
with the harsh statements the President's made about Tea Party 
groups and with the way the Tea Party groups feel about the 
President's usurping of the Constitution, his expansion beyond 
his powers, yes, they are enemies of the President's politics. 
And I stand by that.
    Mr. Connolly. I reclaim my time.
    That, of course--you can stand by that, Mr. Chairman, but 
that wasn't your initial narrative. Your initial narrative was 
there was an enemies list and it was limited to conservative 
groups like the Tea Party. And that's not true. In fact, the 
evidence tells us that's not true.
    More and more evidence coming out that the Inspector 
General cherry-picked evidence to help with your narrative. And 
we'll hear from him in the next panel.
    But the fact that the Tea Party was----
    Chairman Issa. Would the gentleman yield?
    Mr. Connolly. No, Mr. Chairman, I won't.
    Chairman Issa. No, no, I just want you to--we're stopping 
the clock.
    Folks, we're going to take about a 5-minute recess until 
that stops. I don't--your time will be preserved.
    Mr. Connolly. Thank you, Mr. Chairman.
    Chairman Issa. We'll stand in recess for 5 minutes until we 
get that stopped.
    [Recess.]
    Chairman Issa. Could we please close the doors to enjoy our 
quiet?
    The gentleman from Virginia may continue when ready.
    Mr. Connolly. Thank you, Mr. Chairman.
    Mr. Chairman, we left off with you saying that you welcomed 
Democratic evidence that progressive and Democratic-oriented 
groups were targeted. I would--I'll ask unanimous consent that 
this press release be entered into the record from the Ways and 
Means Committee, but I will read from it.
    ``The group of Democratic-leaning organizations was denied 
tax-exempt status by the IRS after their applications were 
pending for over 3 years. These denials happened during the 
period of the TIGTA's audit, but they were not disclosed by the 
IG in the audit report or during his testimony before our 
committee and the Ways and Means Committee.
    ``These applications were processed in the same manner as 
the Tea Party cases outlined in the TIGTA's audit report 
released on May 14th. The cases were identified and screened 
for political activities. They were transferred to Exempt 
Organizations Technical Unit. They were the subject of a 
sensitive case report. They were subject to multiple levels of 
review within the IRS. And they were reviewed by the IRS Chief 
Counsel.''
    The chairman has asked for evidence. I will be glad to make 
sure that this evidence from the Ways and Means Committee, our 
colleagues on the Ways and Means Committee, is provided to the 
chairman and his staff. And I would ask that this be entered 
into record.
    Chairman Issa. Reserving----
    Mr. Connolly. This is----
    Chairman Issa. For the gentleman, as long as you don't want 
to call it evidence. We don't call press releases evidence.
    Mr. Connolly. No, no. I'm not referring to this as 
evidence, Mr. Chairman.
    Chairman Issa. But we're happy to put the press----
    Mr. Connolly. It describes evidence, and I'm happy to make 
sure that evidence is made available to you.
    Chairman Issa. We look forward to seeing that evidence. It 
has not been provided to the majority or minority at this time. 
But I thank the gentleman. And, without objection, it will be 
entered in the record.
    Mr. Connolly. I thank the chairman.
    And I thank our two witnesses. And I'm sorry you have to be 
here today, but thank you for coming.
    Chairman Issa. We now go to the gentleman from Florida, Mr. 
Mica.
    Mr. Mica. Well, thank you, Mr. Chairman.
    And, first of all, just a comment, observing this process 
today and through the past couple of months that we've been 
working on this IRS thing.
    I'm disappointed that the ranking member and the other side 
of the aisle have chosen to continuously try to close down this 
process of discovery to get to the bottom of what took place--
--
    Mr. Cummings. Would the gentleman yield for just 5 seconds?
    Mr. Mica. Well----
    Mr. Cummings. That's absolutely not true.
    Mr. Mica. Well, first of all, he--I didn't yield, but he 
said that.
    But we started this on the 22nd of May. On the 9th of June, 
Mr. Cummings said--you can put it up on the screen--``Based on 
everything I've seen, the case is solved.'' Started almost 
immediately to try to close this down.
    When they couldn't do that, they tried to discredit the 
chairman. And then they released time and time again, as we 
interviewed folks, different transcripts, taking parts out and 
trying to, again, discredit the process.
    When they couldn't do--discredit the chairman and we 
proceeded in a very orderly fashion, now they're attempting to 
discredit the Inspector General. And I find that offensive, 
because, whether they targeted conservative or progressive 
groups, it's our responsibility to get to the truth and find 
out what happened.
    We've done this in a methodical manner. In fact, we first 
went to the Cincinnati folks. And we've only had--Mr. Hull, 
you're the second IRS official at the Washington level we've 
had, I understand.
    Is that correct, Mr. Chairman?
    Chairman Issa. [Nonverbal response.]
    Mr. Mica. So you're the first one we've had.
    We've gone first to--and I think there were eight folks who 
said that we interviewed that--the rogue employees. And I'd 
never met one before, but you look very good for a rogue 
employee, Ms. Hofacre.
    But, in any--in any event, you started getting these cases 
in the beginning of 2010, was it, approximately?
    Ms. Hofacre. Sir, it was the end of April 2010.
    Mr. Mica. Okay, the beginning of 2010. And you--this wasn't 
a targeting by a group of your colleagues in Cincinnati that 
decided we're going to go after folks.
    And most of the cases you got, were they ``Tea Party'' or 
``Patriot'' cases?
    Ms. Hofacre. Sir, they were all ``Tea Party'' or 
``Patriot'' cases.
    Mr. Mica. Were there progressive cases? How were they 
handled?
    Ms. Hofacre. Sir, I was on this project until October of 
2010, and I was only instructed to work ``Tea Party''/
``Patriot''/"9/12'' organizations.
    Mr. Mica. Okay. And then you sought counsel or advice from 
higher up in Washington, and that was Mr. Hull, sitting next to 
you?
    Ms. Hofacre. Yes, sir, I was instructed to contact Mr. 
Hull.
    Mr. Mica. Okay. And did you get advice back? What was 
happening at the local scene? Did any of those affected 
contacted you? Or was it, you were just waiting for Hull? What 
was going on?
    Ms. Hofacre. Sir, I'm not real clear on what you're asking. 
Could you rephrase it?
    Mr. Mica. Well, like, taxpayers or those that submitted 
these requests, did you hear from them at all?
    Ms. Hofacre. Yes, sir. When certain taxpayers responded, as 
Mr. Hull and I both earlier said, I sent him a copy of the 
response, and he was to get back to me in order to process the 
response. The taxpayers called me, when I had not gotten any 
instruction from Mr. Hull, to find out the status----
    Mr. Mica. And that didn't happen.
    So, Mr. Hull, you had also contacted Ms. Lerner for advice 
and counsel and also, I understand, that the counsel--the IRS 
counsel. Is that correct?
    Mr. Hull. I gave my recommendations to my reviewer, and my 
reviewer sent them up to Ms. Kindell. And Ms. Kindell suggested 
that they should go to Chief Counsel. I don't recall----
    Mr. Mica. So Kindell is in Lerner's office. And did----
    Mr. Hull. And----
    Mr. Mica. Did she tell you that something had gone to the--
the legal counsel?
    Mr. Hull. Ms. Kindell suggested or said that the cases 
should go to the Chief Counsel.
    Mr. Mica. So--and the Chief Counsel is one of the two, I 
believe, IRS employees that are political appointees. Is that 
correct, staff? I'm not sure, but I think that's the case.
    So, so far, we find that, again, Cincinnati ``rogue 
employees,'' are asking for advice from Washington. You're in 
Washington. You're the second person we've had from Washington. 
I think we had Mr. Shulman, was the only other one.
    So we're just beginning this investigation. We're just 
starting this. It's not going to be closed down.
    Chairman Issa. Would the gentleman wrap up?
    Mr. Mica. Yes.
    So, finally, Mr. Hull, again, those are--you sought counsel 
and advice from above. That didn't come. You never got it down 
below. And, finally, what happened?
    Did you--did you step aside or seek another assignment, 
Ms.----
    Chairman Issa. The gentleman may answer briefly. The 
gentlemen's time has expired.
    Mr. Hull. Were you asking me, sir?
    Mr. Mica. No. I--well, I was trying to get back to her not 
getting answers, the frustration she experienced. And I'll----
    Chairman Issa. Did the gentlelady understand--do you 
understand the question?
    Mr. Mica. I was told you finally----
    Chairman Issa. We do need an answer, but we're out of time.
    Ms. Hofacre. Sir, yes, I did get transferred out of there.
    Mr. Mica. At your request?
    Ms. Hofacre. Yes, sir, I did.
    Mr. Mica. Thank you.
    Chairman Issa. Thank you.
    We now go to the gentleman from Massachusetts, Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman.
    I thank the ranking member.
    I thank the witnesses for coming before the committee and 
trying to help us with our work.
    I would like to try to reset this if I could. It seems we 
are getting into a debate about whether or not it was fair for 
the IRS to add enhanced scrutiny for Tea Party groups if they 
did the same thing for progressive groups, and I just want to 
point out that when the inspector general, Mr. George came 
before the committee, he indicated there were three 
classifications of U.S. citizens that were subject to enhanced 
scrutiny: One, he did identify Tea Party groups, Patriot 
groups, ones of a more conservative ideology. He also mentioned 
progressive groups. But he also mentioned another--another 
category that sort of subsumes both of those groups. He said 
that there were enhanced scrutiny of groups that were critical 
of the way the government was being run, which in my district 
is about 90 percent of the population, including myself at 
times.
    And I think it's unfortunate that the allegations against 
the White House were made because it became a game of gotcha, 
whether or not the White House was somehow implicated here. 
Those facts are not in evidence yet, but I think we are missing 
an opportunity here because what we do know is that the IRS was 
targeting groups who were critical of the way the government is 
being run, which is a core democratic right, small ``d'' 
democratic, and a core--a core right for every citizen.
    Ms. Hofacre, have you in your experience there, have you 
come across groups that were targeted because of their could 
you call it criticism of the way the government is being run?
    Ms. Hofacre. No, sir. I have not.
    Mr. Lynch. Okay, what about yourself, Mr. Hull?
    Mr. Hull. I'm not aware of any, sir.
    Mr. Lynch. Would--but you are--you are aware of instances 
where Patriot, or Tea Party were investigated?
    Mr. Hull. Only what I read in the newspapers, sir.
    Mr. Lynch. Only what?
    Mr. Hull. Only what I read in the newspapers, sir.
    Mr. Lynch. I see, how about you, Ms. Hofacre?
    Ms. Hofacre. Sir, I don't understand what you're asking.
    Mr. Lynch. Well, why do you think the folks that had the--
those labels, why do you think they were being investigated?
    Ms. Hofacre. Do you mean scrutinized by the IRS, or why we 
were----
    Mr. Lynch. Yeah, yeah.
    Ms. Hofacre. Well, each application is evaluated on the 
facts and circumstances in that particular case, and 
consequently----
    Mr. Lynch. But these are ``Be on the Look Out.'' You know, 
be, Be On the Look Out for Patriot, Be On the Look Out for Tea 
Party. I mean, help me if you can. Those seem to be political 
positions and indicia of a political view, and so the IRS is 
focusing on that, and I'm just curious.
    Ms. Hofacre. Well, when I was there in 2010, sir, I was 
instructed to develop these applications.
    Mr. Lynch. Uh-huh. And what does that mean?
    Ms. Hofacre. That means that somebody else screened them 
out for whatever reason, and I was assigned these applications 
that met the parameters of Tea Parties.
    Mr. Lynch. Okay. Well--well, you are the one who was 
involved in the process. Why are these people being singled out 
then?
    Ms. Hofacre. Because the screeners and the management 
identified that they should be screened out, or I mean, for 
this particular reason.
    Mr. Lynch. Who was the--who was the individual who screened 
them for you?
    Ms. Hofacre. Well, it was a whole group. I mean, Mr.--there 
were several screeners. That is what they were tasked to do 
based on my understanding.
    Mr. Lynch. Okay. I have about 20 seconds left. I just think 
it is disgraceful that we are squandering this opportunity to 
get to the bottom of this because of partisan bickering; one 
group trying to blame the President, the other one trying to 
defend themselves that progressives were also being targeted.
    I think it is very unfortunate because I think the root of 
this matter is that people who were critical of the way this 
government is being run were being targeted, regardless of what 
their--what the source of their gravamen was, what the source 
of their complaint was, they were being targeted as U.S. 
citizens by the IRS. And I think we have squandered the 
opportunity to get to the bottom of this.
    I yield back.
    Chairman Issa. I would ask unanimous consent I have 30 
seconds.
    Without objection.
    Mr. Lynch, I couldn't agree with you more. And hopefully 
you are setting a tone that we will all observe going forward, 
and I will do my best.
    Mr. Cummings. I ask unanimous consent for 30 seconds?
    Chairman Issa. Of course.
    Mr. Cummings. I said in the beginning of what I said, I 
think that we--and I have said it 50 million times. We have got 
to get to the bottom of this. There have been recommendations 
made by the IG. We need to make sure those--and I don't think 
the people want the IRS to be destroyed. They want it to be--
function the way it is supposed to function for everybody, 
conservatives, progressives, those in the middle. Thank you, 
Mr. Issa.
    Chairman Issa. Thank you.
    We now go to the gentleman from Tennessee, Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman.
    We have heard Mr. Hull in his 48 years of experience say 
that these cases were handled in a very unusual manner.
    And Ms. Hofacre, I understand that you said that in your 14 
years experience these cases were handled differently. Was that 
the word?
    Ms. Hofacre. Yes, sir, that is correct.
    Mr. Duncan. And you had 40 to 60 of these cases that were 
given to you in April, and then, in October, you requested a 
transfer, is that correct?
    Ms. Hofacre. Well, sir, the number that you had just stated 
was how many I had when--assigned to me when I left in October 
of 2010. Initially I had maybe about 20.
    Mr. Duncan. I see. And prior to this, how common was it 
that you would be told by the--by someone in Washington to hold 
up applications?
    Ms. Hofacre. It wasn't very common at all.
    Mr. Duncan. And was your frustration coming from the fact 
that you felt that you had enough information to go ahead and 
process these applications, but you basically were just made to 
sit on them?
    Ms. Hofacre. Well, my frustration primarily was that I had 
to sit on them and wait for guidance from D.C.
    Mr. Duncan. Now, I'm told an IG report in May said there 
were 70 Tea Party groups, 11 9/12 groups, 13 Patriot groups. 
Now I'm told these numbers have been revised upward to say 
there were 298 Tea Party groups; and 3 groups that had the word 
``progressive'' in the application; zero that had the word 
``Occupy.''
    But I also--staff tells us that Washington officials asked 
for two additional Tea Party cases that would serve as test 
cases. As of the present, one of those cases is still pending 
and the other case, the application process was withdrawn 
because the person or persons, ``couldn't take it anymore.'' I 
would assume that that's extremely unusual to be delayed from 
2010 when you worked on these cases till now, 2013, and still 
all of these cases are still apparently pending.
    Ms. Hofacre. Yes, sir.
    Mr. Duncan. What--this investigation was started in part 
because of complaints from Tea Party groups to various Members 
of Congress. We don't have any evidence yet, or any comment yet 
that any progressive groups, these three that had the word 
``progressive,'' ever complained to any Member of Congress 
about their holdup, if they were held up. But you also know 
that this was started in part not entirely from the complaints 
from Members, but Lois Lerner said at an ABA conference that 
Tea Party and Patriot groups were being targeted. What was your 
reaction when you heard about that comment?
    Ms. Hofacre. Well, as I said previously and it has been 
reported, I said it was like a nuclear strike.
    Mr. Duncan. And did you and other people in the Cincinnati 
office feel that they were being unfairly blamed or used to 
excuse this political activity that was going on in the 
Washington office?
    Ms. Hofacre. Well, I can't comment on what others, but 
personally, I felt like it was a nuclear strike. I felt they 
were blaming us.
    Mr. Duncan. All right. Thank you very much, Mr. Chairman.
    Chairman Issa. Would the gentleman yield?
    Mr. Duncan. Yes, I will yield the rest of my time to you.
    Chairman Issa. The gentleman, Mr. Lynch has left, but you 
have been asked repeatedly about the politics of it. And I just 
want to take a moment to say that I appreciate that both of you 
are not political folks, and that it is appropriate that, no 
surprise, you did everything as far as we know, very 
professionally.
    So, particularly for Ms. Hofacre, I want to thank you again 
for being here. You represent a larger group who have all said 
similar things. You were chosen, quite candidly, because of the 
time frame that you had these cases. But we appreciate--and 
maybe this is not a lottery you wanted to win, but we 
appreciate the fact that you are here today to speak on behalf 
of many people that you work with in Cincinnati, who, as far as 
we can tell, by the close of this hearing today, we will 
understand they did what they could do; they were limited as to 
what they could do. They moved it to Washington.
    Mr. Hull, to a great extent, we have had you here to show 
that you and others who got cases after you did what they could 
do and, as far as we know, waited on others to make decisions. 
And I thank you.
    And with that, we go to the gentlelady from California, Ms. 
Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    And thank you both for your service in a department, 
frankly, that none of us like, right? But nonetheless, we 
recognize the great value that you provide to making sure that 
everyone is treated equally under the law.
    And let me just start off with you, Ms. Hofacre, isn't it 
true that in the division within Cincinnati that you were 
working in that your responsibility was to determine whether or 
not applicants for 501(c)(4) status were--met the definition, 
which meant that they could not primarily be engaged in 
political activity?
    Ms. Hofacre. Yes, it is.
    Ms. Speier. And as a result, it has always been your task, 
at least when you were doing that there, to scrutinize 
applications to make sure that it was less than 50 percent.
    Ms. Hofacre. It was our job to make a determination, to 
ensure that they were 51 percent social welfare.
    Ms. Speier. And there was an unusual increase in the number 
of applications during that period of time, was there not?
    Ms. Hofacre. From what I understand, I believe that's 
correct.
    Ms. Speier. All right. You stated in your written testimony 
that there were occasions when other agents sent you 
applications from liberal or non-Tea Party-type groups. When 
that occurred pursuant to the instructions that you were given, 
it would--I would send these applications to general inventory 
since they were not within the scope of the Tea Party emerging 
issue.
    When you met with committee staff, you were asked whether 
you received direction to send non-Tea Party cases back to 
general inventory.
    And I'm going to read the exchange:
    ``Do you remember if anyone told you to send progressive or 
liberal cases back to general development?''
    ``No, I don't remember anything like that.''
    ``It just made sense to you?''
    ``Exactly, because my function was to develop Tea Party and 
work with Carter Hull and the Tea Parties.''
    Can you explain the discrepancy between these two 
statements?
    Ms. Hofacre. Ma'am, I was instructed by management to work 
Tea Parties. It was on the BOLO list, and anything that did not 
meet the parameters between, that met the parameters in that 
BOLO list, I sent to general inventory.
    Ms. Speier. But you didn't know what happened to those non-
Tea Party cases?
    Ms. Hofacre. No, ma'am I do not.
    Ms. Speier. How many do you think you referred to 
inventory?
    Ms. Hofacre. I can't estimate that.
    Ms. Speier. I mean, was it 5, or was it 50?
    Ms. Hofacre. Ma'am, I sent everything back that didn't meet 
the parameters of Tea Party, so on the right and on the left.
    Ms. Speier. Okay. So it was a significant number then?
    Ms. Hofacre. It seemed at the time. I can't estimate how 
many.
    Ms. Speier. One of the documents obtained by the committee 
is a PowerPoint presentation for a 2010 training session 
instructing employees on how to handle applications for tax-
exempt status from groups engaged in political activity. And it 
has photos of an elephant and a donkey, not very good ones, 
but, and since that the employees should look for names like 
the following, and you see there on the next page it shows what 
those employees should be looking for: Terms, ``Tea Party,'' on 
the next page, ``Patriots,'' ``9/12 Project.'' Then on the 
following page, it says to look for the word ``progressive.'' 
And there's lots of redacted information there, which I 
understand may be a list of progressive or left-leaning groups.
    When you turn to the next page, the slide show explains 
that most of these applicants will file a 501(c)(4), and it 
says that the concerns are that there may be more than 50 
percent political, possible PAC, political action committees. 
Do you recall attending this training?
    Ms. Hofacre. I do not specifically recall attending that 
training.
    Ms. Speier. Do you dispute that you were there at the 
training?
    Ms. Hofacre. I do not recall. I do not dispute that I was 
there either.
    Ms. Speier. So I understand that your--your plate was full 
handling of lot of these Tea Party applicants. Are you--and you 
referred non-Tea Party cases back to the general inventory. 
Based on this training document, it appears that someone else 
may have been looking at progressive groups. Is that a logical 
assumption to make?
    Ms. Hofacre. I--I don't have the facts to verify that.
    Ms. Speier. So you never talked to anyone else in the 
Cincinnati office that might have been looking at another 
segment that were----
    Ms. Hofacre. I do not recall talking to anybody else.
    Ms. Speier. Okay, Mr. Chairman, based on these training 
materials, I think we need to see what is under those 
redactions and examine in more detail how these progressive 
cases were handled as well.
    Chairman Issa. I agree with the gentlelady. We would like 
to see the claim of 6103 modified to be more reasonable. I 
would mention that Teddy Roosevelt was a progressive, that the 
term is not automatically liberal.
    Ms. Speier. Well, no, but my point is that there is a lot 
under that second bullet that has been redacted, and for us to 
really do an exhaustive investigation, we really need to know 
that. And to the extent that Ms. Hofacre has testified that she 
did return significant numbers, we should find where do those 
significant numbers of applications go and have someone come 
testify on them.
    Chairman Issa. I agree with you, and this committee has 
reached out and asked I and I will ask again with theoretically 
with a larger audience, that if there was any progressive group 
that was held for 3 years, asked abusive questions, asked about 
their campaign activities, their board of directors, their 
names of their contributors, and so on, I would ask them that 
they come forward because they can get us around this arcane 
6103 law that causes victims not to be protected, but rather 
re-victimized.
    And I join with the gentlelady that I would like to see 
groups on the left and the right be able to come to us as 
victims and get some resolution rather than being re-victimized 
by a system that is supposed to protect confidential 
information.
    So I join with the gentlelady in total agreement.
    Ms. Speier. Thank you.
    Chairman Issa. With that, we go to the gentleman from Ohio, 
who is keying up his mike, Mr. Jordan.
    Mr. Jordan. Thank you, Mr. Chairman.
    Mr. Hull, you have got 48 years of experience with the IRS, 
and your annual reviews and evaluations, were those all 
positive.
    Mr. Hull. Yes, sir, they were.
    Mr. Jordan. And most of the time that you spent at the IRS, 
you dealt with applications for tax-exempt status?
    Mr. Hull. Yes, sir.
    Mr. Jordan. And you are viewed as an expert in this field, 
is that fair to say?
    Mr. Hull. Which field, sir?
    Mr. Jordan. Dealing with applications--and you can, you 
know, you are dealing with politicians here. You can give the 
yes answer. That's fine. We are used to boasting and----
    Mr. Hull. I'm very knowledgeable about working applications 
for tax exempt status.
    Mr. Jordan. Okay, isn't it true you conducted the training 
sessions, right?
    Mr. Hull. Yes, I have.
    Mr. Jordan. And in some of those training sessions, Lois 
Lerner even showed up and was present at some of the training 
sessions, is that true?
    Mr. Hull. I don't recall, sir.
    Mr. Jordan. Okay. We have been--other witnesses we talked 
to said that's the case. And you were assigned the now famous 
two test cases that dealt with two--I think it is important. 
These were test cases of Tea Party groups. You were assigned 
those two cases, is that correct?
    Mr. Hull. Yes.
    Mr. Jordan. And you, in your testimony, you said those 
cases were taken from you in August of 2011, is that right?
    Mr. Hull. Yes, sir.
    Mr. Jordan. And they were given to, my understanding is 
they were given to Hilary Goehausen, is that correct?
    Mr. Hull. That's correct as far as I know.
    Mr. Jordan. And could we put the slide up real quick 
because we want to talk about--do you how long Hilary Goehausen 
had been at the IRS when she got those cases, do you know?
    Mr. Jordan. Well, we do, because we asked her:
    ``And how long have you been with the IRS'', is the 
question that Hilary Goehausen--"
    ``I have been with the IRS since late April 2011.''
    ``Prior to this time, had you had any experience in 
campaign intervention, lobbying, or as it relates to tax-exempt 
organizations?''
    ``No.''
    So we have a lady who has been at the IRS 4 months, never 
dealt with this area, who now gets the two infamous test cases. 
They take them from a guy who has been there 48 years with 
stellar evaluations, and they gave them to this individual, 
correct?
    Mr. Hull. Yes, sir.
    Mr. Jordan. Okay, okay, fine. So here is what I--from your 
testimony, they were taken from you after you made 
recommendations on how to deal with the test cases, is that 
correct?
    Mr. Hull. That's correct.
    Mr. Jordan. And the recommendation--just for the other side 
to know, the recommendations were split. You said one group 
should be approved for tax exempt status and one should be 
disapproved, and get further information, further data, is that 
correct?
    Mr. Hull. That's correct.
    Mr. Jordan. And they give them to someone who had no 
experience dealing with this. And they also took them away from 
you after, according to your testimony, you met with the Chief 
Counsel's office, is that correct?
    Mr. Hull. That's correct.
    Mr. Jordan. So this is I think important to understand. The 
real harassment of Tea Party groups wasn't just the fact that 
they applied and maybe were denied. The fact was, they had to 
wait. They never got resolution. Because even if you are 
denied, you have an appeals process. You can finally get some 
closures through an appeal process. So the real harassment was 
never getting to an answer.
    Mr. Hull, with 48 years experience, the expert, conducts 
the training sessions, gives recommendations on the test cases, 
and they say, oh, wait a minute. We are not going to let that 
happen. We are going to hold these cases. We want to continue 
to further harass these entities. And furthermore, we are going 
to the them away from you and not give you any more. And we do 
that after he has made the recommendations and after there has 
been a meeting with the Chief Counsel's Office. That's why this 
is--that's why this is all about Washington and this Chief 
Counsel's Office and why we are going to have Mr. Wilkins in 
front of this committee at some point in the future.
    Ms. Hofacre, you are a public servant. You have served at 
the IRS for 14 years, I think, if I got that right?
    Ms. Hofacre. Yes, sir, that is correct.
    Mr. Jordan. Prior to that you served our country wearing 
the uniform of our country as a veteran, is that correct?
    Ms. Hofacre. Yes, sir, I was both Active Duty and Reserve.
    Mr. Jordan. Tell me how you felt when Lois Lerner with the 
plan in question on May 10th, goes public and says, ``this was 
inappropriate actions by line people in Cincinnati.''
    Ms. Hofacre. Sir, like I said before, it was like a nuclear 
strike, and----
    Mr. Jordan. I think that's the term you used with----
    Ms. Hofacre. With the earlier interviews.
    Mr. Jordan. With your interview with staff, a nuclear 
strike.
    Ms. Hofacre. Correct.
    Mr. Jordan. So you would agree with Cindy Thomas, one of 
your bosses in Cincinnati who said, people in Cincinnati felt 
like they were being thrown under the bus.
    Ms. Hofacre. I'm not sure the context that was stated in, 
but literally, that statement I would agree with that.
    Mr. Jordan. Let me ask you one other question here and then 
I will close, Mr. Chairman. You were asked in your interview by 
our staff, Ms. Hofacre, this specific question:
    ``Do you think the public has been purposely misled by 
assertions that Cincinnati was to blame?''
    And your response was?
    Ms. Hofacre. Yes, I believe so.
    Mr. Jordan. Yeah, I think your response was, according to 
what we have, exactly. So statements made by folks in 
Washington, two rogue agents, this narrative that was trumpeted 
out there and bandied about, statements made by--statements 
made by the White House press secretary, ``apparent conduct by 
IRS officials in Cincinnati. IRS line personnel had improperly 
targeted conservative groups.''
    They were purposely--according to your statement, you think 
folks in Washington were purposely, that's the key point, you 
said you think it was a purposeful misleading of the facts and 
what really took place.
    Ms. Hofacre. Sir, in my opinion, when Lois Lerner made that 
statement, that would be correct.
    Mr. Jordan. Thank you.
    Mr. Chairman, I yield back.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Pennsylvania, Mr. Carter.
    Mr. Cartwright. Thank you, Mr. Chairman, and Ms. Hofacre, 
Mr. Hull.
    Chairman Issa. I'm sorry, Mr. Cartwright, I apologize.
    Mr. Cartwright. Well, I'm sorry, I didn't hear you.
    Mr. Hull and Ms. Hofacre, thank you both for being here and 
I want to thank you both for your long service.
    Mr. Hull, according to the transcript of your interview 
with committee staff, you stated that the processing of Tea 
Party cases was subject to, ``substantial delays,'' because 
``we didn't know exactly where we were going.'' Is that still 
your testimony?
    Mr. Hull. Yes, sir.
    Mr. Cartwright. And what did you mean by that?
    Mr. Hull. I just meant that I was receiving no indication 
of which way we should be going with the--I had made my--I had 
made some recommendations, and I was not told if those 
recommendations would be accepted or not. All I was told, we 
needed additional information.
    Mr. Cartwright. All right.
    And Ms. Hofacre, you previously told the committee that Mr. 
Hull took a long time to give you guidance on development 
letters for Tea Party applicants. You are not--you are not 
suggesting that Mr. Hull intentionally delayed developing Tea 
Party cases that you handled, am I correct in that?
    Ms. Hofacre. Yes, sir, you are.
    Mr. Cartwright. Okay. And back to you, Mr. Hull. You never 
intentionally stalled or delayed your work with Ms. Hofacre on 
the Tea Party cases, did you?
    Mr. Hull. No, sir.
    Mr. Cartwright. Okay. And now, we learned that there was a 
miscommunication between the senior management in the 
Cincinnati office and the group manager overseeing the 
political advocacy cases that caused a 13-month long delay when 
the person Ms. Hofacre transferred her cases to stopped sending 
development letters while waiting for guidance from the 
Technical Unit.
    Unfortunately, both the individual who held the cases and 
his manager at the time are Republicans and neither of them was 
invited to testify here today to discuss that delay. I believe 
the delays in processing these political advocacy cases are 
highly problematic, but the evidence compiled by the committee 
does not suggest that they were intentional or motivated by 
bias.
    Now, Mr. Hull, did anyone tell you to stall or delay your 
work on the Tea Party cases?
    Mr. Hull. No, sir.
    Mr. Cartwright. And one IRS official we interviewed was an 
attorney in the IRS Office of Chief Counsel who worked on these 
cases. And when he was asked if anyone ever instructed him to 
stall or delay providing guidance on how to develop these 
cases, he responded as follows: ``No. On the contrary, we were 
told to work extremely fast. We were given a 48-hour time 
deadline on the first document. We turned around and had such 
extremely short deadlines to turn that around.''
    As far as you understand, I will throw it up to both 
witnesses, is that correct?
    Mr. Hull. I'm not aware of anything in that regard, sir.
    Mr. Cartwright. Okay.
    Ms. Hofacre. I'm not either.
    Mr. Cartwright. Well, thanks very much.
    And I yield back, Mr. Chairman.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Utah, Mr. Chaffetz.
    Mr. Chaffetz. Thank you, Mr. Chairman.
    And I do think it is important that we continue on to find 
the truth. And I appreciate you holding this hearing.
    And for these two fine Americans who are coming forward, 
and I appreciate your service. Nearly 70 years of service 
between the two of you in the IRS. Both have served in the 
military and for that, we are very grateful, and we thank you.
    Ms. Hofacre, we have had your reaction to some of the 
statements by some very powerful people in Washington. I would 
like to have you comment, if you could, about accuracy of their 
comments. We had--CNN reported that former Commissioner Miller 
blamed two employees in Cincinnati. I think the quote was, 
``two rogue agents.'' Is that true or not true, in your 
opinion?
    Ms. Hofacre. Sir, I'm not clear on what you're asking.
    Mr. Chaffetz. The former commissioner, IRS Commissioner 
Miller----
    Ms. Hofacre. Right.
    Mr. Chaffetz. --blamed all this targeting on two rogue 
agents.
    Ms. Hofacre. Correct.
    Mr. Chaffetz. I would suspect that you would be one of 
those two rogue agents.
    Ms. Hofacre. It was inferred that I was one of them.
    Mr. Chaffetz. Is that true?
    Ms. Hofacre. No, it was not. I was following direction from 
management, and they were aware of what I was doing.
    Mr. Chaffetz. Who is that management?
    Ms. Hofacre. Well, when I started the project, it was 
Joseph Herr, and then I was transferred to another group, Steve 
Bowling.
    Mr. Chaffetz. Who, when the spokesperson for the President 
of the United States, Jay Carney stood up before the American 
people and said, ``IRS line personnel had improperly targeted 
conservative groups.''
    What's the accuracy of that statement?
    Ms. Hofacre. Sir, I know the accuracy of any inference to 
rogue agents is not correct.
    Mr. Chaffetz. How--there had to be a moment when you went 
back home and you were kind of by yourself. What was that like?
    Ms. Hofacre. Well, like I said to the other gentleman, it 
was like a nuclear fallout. I mean, the press hounded my family 
and me. They were hounding us at work, so, I mean, it wasn't a 
character builder.
    Mr. Chaffetz. Why--why did they do that? Why was 
everybody----
    Ms. Hofacre. I don't understand--I don't have any factual 
knowledge of why they said what they said or why they did what 
they did.
    Mr. Chaffetz. What could you do about it?
    Ms. Hofacre. There's nothing I could have done.
    Mr. Chaffetz. What did you want to do?
    Ms. Hofacre. Go back to my life previously, before May 
10th.
    Mr. Chaffetz. And I guess that's the sad part of this 
story. You know, I'm glad the truth is surfacing because I 
think most people now reflecting back are going to understand 
that you're more heroic in this, and really, I think when you 
have such senior powerful people in Washington, D.C., trying to 
discredit you and your person, your service, it's just wrong. 
And I'm proud of the fact that we are pursuing this.
    You know, if we did what the White House wanted us to do, 
if we did what the ranking member suggested we do, this thing 
would be over: Nothing here. Don't do it. As far as I'm 
concerned it is over.
    When you have the spokesperson for the President of the 
United States make a definitive statement that it was two rogue 
agents and start poking at these people, who have no power to 
do anything about it, that is wrong. How dare anybody suggest 
that we are at the end of this? This is the beginning of this. 
We have to make an example of it. We need to get to the bottom 
of it, and quite frankly, I'm tired of this administration 
having to keep having these hearings. We have done it on Fast 
and Furious. We are doing it on Benghazi. We are doing it on 
the IRS. We are doing it--why? Each time, there is a pattern. 
Nothing here. Oh, it was just a couple of people. Just move on. 
That's not true. When the ranking member went on national 
television and said that this case should be closed, that's 
wrong. And I have the greatest respect for----
    Mr. Cummings. Will the gentleman yield?
    Mr. Chaffetz. Yes.
    Mr. Cummings. Let me--let me be clear because there's some 
old talking points going on here.
    Mr. Chaffetz. No, I'm reclaiming my time.
    Mr. Cummings. I just want to answer your allegation.
    Mr. Chaffetz. No, no, I want to reclaim my time.
    Chairman Issa. It's the gentleman's time.
    Mr. Chaffetz. To suggest that they are just talking points. 
These are not just talking points.
    I yield the gentleman time.
    Mr. Cummings. Thank you. Let me be very clear. I hope the 
gentleman will join me when I say that I want every single 
syllable of every single transcript that we can get redactions, 
appropriate redactions. But I have been asking for that and I 
want that.
    What I said was, when it came to the issue of saying that 
the President and the White House was responsible for this, I 
said that the evidence to that point and continues to be not 
there.
    As far as the investigation is concerned, I want us to get 
to the bottom of that. And I really mean that. It is very, 
very, very important. So I just wanted to make that clear.
    Mr. Chaffetz. Can I ask unanimous consent for 30 seconds?
    Chairman Issa. Of course.
    Mr. Chaffetz. Part of the reason it has risen to this level 
is that you have the White House spokesman, Jay Carney, blaming 
one of the people sitting there at this table. You have the 
former acting commissioner saying it was two rogue agents. It 
was the most powerful people in Washington, D.C., placing blame 
on the person sitting before us, and that's why it continues 
forward, and that's why I do think the White House is now 
engaged in this.
    Chairman Issa. The gentleman is entitled to his opinion.
    We will stick to the facts here at this time.
    We thank the gentlelady for her showing that it's not 
Cincinnati.
    With that, we go to the gentlelady from New York.
    Mrs. Maloney. Thank you, and thank you for your public 
service and for being here today and for your testimony. I just 
would--I would like to get to the bottom of this and get over 
with it, too.
    And I have to ask you. I would like to ask both of you. 
Would it make your professional life easier if you were not 
retired and still working, if it was just very clear in the law 
that no not-for-profit that engages in political activity shall 
receive in any, way, shape, or form a tax relief from the IRS? 
Would that make your life easier in doing your job, Mr. Hull.
    Mr. Hull. Yes, I think it would.
    Mrs. Maloney. How about you, Ms. Hofacre?
    Ms. Hofacre. Yes, I agree with Mr. Hull.
    Mrs. Maloney. Okay, well, I intend to put in such a bill. 
Just stop it. Let's just make sure that there is never any 
confusion in the future. The IRS is there to perform a 
function, not to decide whether someone is involved in 
political activity or not, and quite frankly, most Americans 
believe that not-for-profits serve an important role if they 
are addressing social concern and need of this great country 
and deserve a tax deduction, but certainly political activity 
does not.
    So, in concerns of efficiency and clearness, I think that's 
the approach we should take in a bipartisan way and end this, 
as my colleagues on both sides of the aisle want to do so much. 
Let me say that, as a Member of Congress, we do have a serious 
responsibility and a constitutional responsibility to practice 
and conduct oversight. But we must do it in a responsible and 
clear way, and not make unfounded political attacks or use this 
incredibly important responsibility to make a political point. 
And one of the myths that keep being pushed out there by the 
right and some others, is that the Obama campaign was somehow 
involved in directing the IRS to target Tea Party groups for 
unfair scrutiny, and according to all of the testimony that I 
have read, some many, many people testified, only two of you 
are before us, but in the depositions, they have all said there 
was no connection whatsoever.
    But to give an example of sort of unfounded conduct and 
statements, I would like to quote Senator Rubio, who recently 
claimed on national television that both the Obama 
administration and President Obama's campaign had attempted to 
use the IRS, and I will quote directly, ``muscle anyone who is 
their political opponent and to use whatever power they have at 
their disposal to intimidate people who they don't agree 
with.''
    So I would like to ask both of you the same question. Were 
any of you intimidated or contacted or influenced in any way, 
shape, or form by the Obama campaign committee to do anything?
    Mr. Hull?
    Mr. Hull. No, I was not contacted.
    Mrs. Maloney. Okay, Miss?
    Ms. Hofacre. No, ma'am, I was not.
    Mrs. Maloney. Did any--did anyone from the campaign, either 
a political appointee, a volunteer, a bystander, or an employee 
ever give instructions or directions on how to process Tea 
Party applications? Did anyone interfere in the process?
    Mr. Hull?
    Mr. Hull. No.
    Mrs. Maloney. Ms. Hofacre?
    Ms. Hofacre. No.
    Mrs. Maloney. Okay, did any of your IRS colleagues ever 
tell you that the Obama campaign gave them any instructions or 
directions on how to process applications for tax exempt status 
of Tea Party applicants? Did any----
    Ms. Hofacre. No, they did not.
    Mr. Hull. No, they did not.
    Mrs. Maloney. Now, they are giving the exact same answers 
that were given also by other witnesses that were interviewed 
by both the Republican and Democratic committee that it is 
completely un--it is not true. It is un--I'm getting very 
concerned about this because it keeps going on and on, and I 
just want to make it very clear that there was no connection 
whatsoever, correct?
    Mr. Hull. That is correct.
    Ms. Hofacre. That is correct.
    Mrs. Maloney. And again, would it make your life easier if 
we just had clear directions from Congress that no not-for-
profit receive any tax deduction whatsoever for--if they engage 
in political activity?
    Mr. Hull. I'm sure it would be a help.
    Ms. Hofacre. Yes, it would.
    Mrs. Maloney. I yield back the balance of my time.
    Chairman Issa. If the gentlelady would yield. A follow up 
just to get clarity on your question.
    Mrs. Maloney. Sure.
    Chairman Issa. Mr. Hull, wouldn't the American Lung 
Association's support of an initiative in California, the 
NAACP's support of civil rights, wouldn't all of those be a 
challenge in which you would like to have clarity that zero may 
not be the right number either?
    Mr. Hull. I'm not sure I would be able to answer that 
question, sir.
    Chairman Issa. But currently, it is roughly 5 percent for 
501(c)(3)s and under 50 percent for 501(c)(4)s. You would have 
a challenge if you had to audit at zero for organizations, such 
as the American Lung Association, that actually endorses 
initiatives, and so on, and I only ask this for the gentlelady. 
We are not the tax committee, but I think we have to--we have 
to work together to find solutions for this.
    Mrs. Maloney. Yes.
    Chairman Issa. Hopefully, we will recognize that the narrow 
interpretation of none might, in fact, hamper very good 
charities that we all support.
    Mrs. Maloney. Will the gentleman yield?
    Chairman Issa. Of course.
    Mrs. Maloney. The difficulty, it appears to me, is when an 
employee who is trying to do their job honestly and fairly and 
correctly is then given the task to interpret the 5 percent. 
That's a very difficult thing to do when you don't have access 
to their books or their activities or everything they are 
doing.
    And given the fact that our democracy is such a sacred 
right--and I want to share this with you very quickly, the 
ambassador from Pakistan, they just had their first peaceful 
transfer of power, and they are so thrilled that they had a 
peaceful election. We have had that--we have had that honor our 
entire existence.
    Chairman Issa. I thank the gentlelady.
    Mrs. Maloney. It is important to honor that and continue 
that honor clearly and fairly. And the allegations are very 
serious allegations against the American Democratic system that 
the Tax Code would be used in any way to promote an election in 
any way, shape, or form, and so I feel----
    Chairman Issa. The gentlelady's time is really expired.
    Mrs. Maloney. --very strongly about it, and I appreciate 
that they agree that they don't want to get involved in the 
election.
    Chairman Issa. Please, the gentlelady's time really has 
expired.
    We now go to the gentleman from Michigan, Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman.
    And thank you for continuing these hearings, because 
frankly, it is important to get to the truth and I thank the 
two witnesses here today. You deserve your day to have the 
truth come out, especially since you were put in as rogues 
incorrectly.
    I read in D.C. newspapers and seen on cable news that some 
people believe the IRS case is solved. We know that not to be 
the case. My constituents, the groups in question, those being 
targeted, the evidence we have uncovered so far and continue to 
look for, says differently. And so we appreciate you being 
here.
    Ms. Hofacre, just to continue some questioning where you 
had indicated that in working with Mr. Hull, initially, plenty 
of responsiveness, information was shared, questions were 
answered, but that slowed down.
    Ms. Hofacre. Yes, sir, that is correct.
    Mr. Walberg. And though it might not have been direct 
statements from individuals above you saying slow it down, yet 
it was starting to slow walk in the process.
    Ms. Hofacre. Yes, sir, as Mr. Hull pointed out, he stopped 
responding to me.
    Mr. Walberg. And we know from his testimony that the 
reasons why he stopped responding or slowed it down because of 
hurdles that were put in his way, and disagreements that took 
place as well. Were taxpayers calling you still during this 
time period?
    Ms. Hofacre. Yes, sir, they continued to call me probably 
until the end of 2010, beginning of 2011.
    Mr. Walberg. How often would you get the calls?
    Ms. Hofacre. Well, initially, I got numerous calls a day.
    Mr. Walberg. What did you tell them?
    Ms. Hofacre. I continually told them that the cases were 
under review.
    Mr. Walberg. How did that make you feel telling them the 
cases were under review?
    Ms. Hofacre. Like I said in my testimony, it was like 
working in lost luggage. I mean-- I mean, there was never any 
positive response because I couldn't give them a clear answer. 
And like I may have said in my previous testimony, that every 
taxpayer deserved an answer because if the answer is negative, 
they have other avenues they can pursue, like appeals to, you 
know, to look at it from a different angle, perhaps.
    Mr. Walberg. You said also, I remember in your response to 
the committee: ``I remember thinking this is ridiculous because 
at the same time you are getting calls from irate taxpayers, 
and I see their point, even if a decision is unfavorable, they 
deserve some kind of a treatment. They deserve, you know, 
timeliness, and it was just these applications and their 
responses were just being sent up there, and I'm not sure what 
was happening. But I mean, I just kept getting the same 
responses from Carter Hull. They are under review. And that is 
what I told the taxpayer.''
    Ms. Hofacre. I continued to tell them that, yes, sir.
    Mr. Walberg. Did you express frustration to anyone about 
the delays in the process?
    Ms. Hofacre. Yes, sir, I expressed it to my manager at the 
time, Steve Bowling.
    Mr. Walberg. Steve Bowling. I understand you told the 
committee staff that you expressed that frustration and what 
was his response?
    Ms. Hofacre. He was just saying that he was waiting on 
Washington, and that he had--he was just waiting on them.
    Mr. Walberg. I understand you switched positions in October 
of 2010, that's correct?
    Ms. Hofacre. Yes, sir, that is correct.
    Mr. Walberg. What caused you to switch positions?
    Ms. Hofacre. I mean, it was the frustration of working on 
this project. Like I may have previously said, I was getting 
more and more Tea Party applications. I was also getting 
applicants--applications with any kind of political or 
legislative activity, and I was tasked to do Tea Parties, but I 
think I said in my previous interview that I became a dumping 
ground probably around August of 2010, so I was seeing every 
case with any inkling of any kind of political or legislative 
activity.
    At the same time, I was getting slammed with phone calls 
from taxpayers who seemed to have a legitimate, you know, right 
to complain about the process because they deserve some kind of 
answer at that time. And that was 3 years ago.
    Mr. Walberg. What happened to the Tea Party cases in your 
queue when you transferred?
    Ms. Hofacre. They were transferred to another agent.
    Mr. Walberg. Who was that agent?
    Ms. Hofacre. It was Ron Bell.
    Mr. Walberg. And Ron Bell, do you know if he was able to 
make any progress on these cases?
    Ms. Hofacre. From what I understand, no.
    Mr. Walberg. Did you have any contact with him over these 
cases subsequent to your transfer?
    Ms. Hofacre. Just, I had--I was still receiving telephone 
calls from taxpayers, so----
    Mr. Walberg. On these issues from taxpayers to you?
    Ms. Hofacre. Right, so for about a few months after I 
changed, so I would call him and give him the name of the 
applicant and the contact number to have him call them and tell 
them what was going on.
    Mr. Walberg. Did he indicate to you whether they continued 
in a holding pattern?
    Ms. Hofacre. I was under--I was led to believe they were in 
a holding pattern. I believe he did say that.
    Mr. Walberg. And these were just Tea Party cases, right?
    Ms. Hofacre. In October of 2010, that is correct.
    Mr. Walberg. What is a pink slip?
    Ms. Hofacre. Sir, a lot of these organizations, they all 
have various activities, but a couple of the applicants would 
have these email blasts on their Web sites, and you could send 
a pink slip to your Congressman or your Senator, however----
    Mr. Walberg. These were Tea Party groups?
    Ms. Hofacre. Yes, sir, they were Tea Party group Web sites.
    Mr. Walberg. So were you to select out these pink slips, 
organizations?
    Chairman Issa. The gentleman's time is expired. The 
gentlelady may answer.
    Ms. Hofacre. Sir, I mean, that was just one of their 
activities. I mean, if their activity was in the file, I would 
ask about it.
    Mr. Walberg. Well, I guess I just wonder what relevance 
that is to IRS, Mr. Chairman. Could I ask Ms. Hofacre to answer 
that?
    Chairman Issa. If the gentlelady would answer and then 
that's the end.
    Ms. Hofacre. Okay, so like, we keep saying it is facts and 
circumstances and our job was to determine, and for me to get 
the information to help determine whether or not they were 
primarily social welfare or political, and that was just one 
piece of the pie.
    Chairman Issa. Okay, thank the gentlelady. I thank you.
    The gentlelady from Illinois, Miss Kelly.
    Ms. Kelly. Thank you, Mr. Chair.
    Mr. Hull, I understand that you were originally assigned 
two Tea Party cases in April of 2010 and then had those cases 
transferred away from you in August of 2011. Is that correct?
    Mr. Hull. Yes, that's correct.
    Ms. Kelly. Were you given any special instructions on how 
to work those cases?
    Mr. Hull. No, I was not.
    Ms. Kelly. Did anyone ask you to give them special 
attention?
    Mr. Hull. No, no one asked me to give them special 
attention.
    Ms. Kelly. When you sat down with the committee in June of 
2013, you told staff that you asked for a special card to be 
drawn up so that you could put your time into that particular 
place coordinating Cincinnati cases. Can you explain what you 
meant by this?
    Mr. Hull. Each time we get a case, there is a--you get a 
card saying this is your case, and you are working it. Because 
I knew I would be spending time on coordinating Tea Party cases 
with Ms. Hofacre, I asked that card be made up so that when I 
did talk to her, I could put my time correctly as to what I was 
doing.
    Ms. Kelly. Okay, did taking these cases on add a 
significant burden to your workload?
    Mr. Hull. Yes, it did.
    Ms. Kelly. Did they add to the many responsibilities that 
you already had?
    Mr. Hull. Yes, they did.
    Ms. Kelly. I want to ask about the process of having the 
cases transferred away from you to a different tax law 
specialist, who identified herself to the committee as a 
Republican. Mr. Hull, do you know why these cases were 
transferred from your inventory to that of the other tax law 
specialist?
    Mr. Hull. I was never told the reason.
    Ms. Kelly. Never told. Were they transferred away from you 
in order to give them extra scrutiny or to further delay them?
    Mr. Hull. I have no knowledge of that.
    Ms. Kelly. According to evidence gathered by the committee, 
it appears that these cases were transferred so they could be--
they would be worked more efficiently. Mr. Hull, a manager in 
the Technical Unit acknowledged your experience in working on 
501(c)(3) applications, but told the committee that you were 
not moving fast enough on these cases. Specifically, he said, 
``it was taking longer time than I would expect for someone at 
his level.'' He told committee staff that the cases you were 
working had been, ``stagnant for a year and a half, so he and 
his manager decided to reassign the cases.''
    Ms. Hofacre, you told committee staff that at first Mr. 
Hull was, ``more timely,'' but as the months dragged on, he 
became less timely and nonresponsive. Is that accurate?
    Ms. Hofacre. Yes, ma'am, that is.
    Ms. Kelly. Mr. Hull, did you know that your managers, and 
Ms. Hofacre wanted you to move more quickly on these cases?
    Mr. Hull. I don't believe--I can't remember them ever 
expressing that to me.
    Ms. Kelly. As we can see, the original Tea Party cases were 
not transferred within the Technical Unit, so they would be 
delayed and given extra scrutiny. Instead, the opposite was 
true. These cases were transferred away from Mr. Hull where 
they were a burden on his already heavy workload to another tax 
law specialist in order to ensure that they would be processed 
more efficiently. And thank you both.
    Mr. Cummings. Does the gentlelady yield?
    Ms. Kelly. I yield.
    Mr. Cummings. I just want to pick up on one thing, Mr. 
Hull, and I want to thank the gentlelady for yielding. So your 
cases were transferred to a Republican, is that what they just 
said?
    Mr. Hull. I have no knowledge of what Ms. Goehausen's 
political affiliation was.
    Mr. Cummings. And you said you had not received any 
complaints about your work speed or anything like that?
    Mr. Hull. Not that I can recall, sir.
    Mr. Cummings. And Ms. Hofacre, you never complained to him 
about his work speed or anything did you?
    Ms. Hofacre. No, I did not.
    Mr. Cummings. Okay, and again, when you look at all of 
this, when you are trying to figure out, Ms. Hofacre, what part 
of the case is, I mean organization's work is political, and 
which part is for general welfare, is that a complicated 
situation?
    Ms. Hofacre. Yes, sir. It's 51 percent.
    Mr. Cummings. Uh-huh, and how do you do that?
    Ms. Hofacre. Again it's facts and circumstances.
    Mr. Cummings. So you got to really go through each case 
very carefully?
    Ms. Hofacre. That is correct.
    Mr. Cummings. Would you agree with that, Mr. Hull?
    Mr. Hull. Yes, I would.
    Mr. Cummings. So you had gone through the cases and looked 
through them very carefully, Mr. Hull?
    Mr. Hull. Yes, I did the cases I had.
    Mr. Cummings. The factual patterns of each one?
    Mr. Hull. Of the two cases that were assigned to me, yes, 
sir.
    Mr. Cummings. And what did you go through to get to your 
conclusions?
    Mr. Hull. I did research. I went to their Web site. I 
looked for prior precedents as to how cases like this may have 
been handled in the past to try and decide how we would put--
what my recommendation would be.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Chairman Issa. Thank you.
    We now go to the gentleman from Oklahoma, Mr. Lankford.
    Mr. Lankford. Thank you.
    And I thank both of you for being here. You know very well, 
because you have heard from people, that when others talk about 
applications and groups, these folks have names and faces. Some 
of them live in my district, some of the individuals that 
waited a very, very long time to give a response, so I 
appreciate both of your work and your diligence through the 
process on this.
    Mr. Hull, I understand that the Tea Party test cases were a 
sensitive case report, is that correct?
    Mr. Hull. A sensitive case report was sent up every month, 
yes, sir.
    Mr. Lankford. Okay, I want to ask for the slide. I think we 
have one of those that staff has requested. Is this the--I'm 
not sure if you can tell from where you are, but does this look 
like one of the sensitive test case reports?
    Mr. Hull. I can't actually read anything, but the form 
looks familiar.
    Mr. Lankford. Yeah, the form looks familiar to you. We will 
try to get a copy of it to you. The top part of it seems to 
have just a template information, and then the middle to the 
bottom of it seems to be filled in. Let me read some of the 
stuff that's in it. When it says, ``the case or issue 
summary,'' it says: ``The various Tea Party organizations are 
separately organized, but appear to be part of a national 
political movement that may be involved in political 
activities. The Tea Party organizations are being followed 
closely in national newspapers, such as The Washington Post, 
almost on a regular basis.''
    Further down, it says this: ``Met with J. Kindell to 
discuss organizations two and three, and service position. Mrs. 
Kindell recommended additional development activities, i.e. The 
activities then forwarded on to the chief counsel.''
    Later on, it says: ``Coordination between HQ and Cincinnati 
is continuing regarding information letters through applicant's 
exemption under 501(c)(3) and 501(c)(4).''
    Mr. Hull, does this sound like the document that you had 
created there?
    Mr. Hull. Yes, it does.
    Mr. Lankford. Did someone instruct you to create a 
sensitive case report for Tea Party cases?
    Mr. Hull. My manager, Mr. Shoemaker, asked me to prepare 
one.
    Mr. Lankford. Okay, well, I need to ask that question. At 
one point, you write into this, ``Met with J. Kindell to 
discuss organizations two and three and service position.'' 
What did you mean by discussing ``service position''?
    Mr. Hull. Whether or not the organization-- the facts would 
go to exemption, or denial.
    Mr. Lankford. So trying to make a broad decision on that, 
you are waiting on decisions on the--on a broader case because 
I know you have said a lot they say case by case, and you 
pushed back on saying this can can't be a template response 
because each case is different. So I'm trying to determine the 
service position, what that might be in that conversation.
    Mr. Hull. Well, at this point the service position was 
going to be decide, I thought, by chief counsel. I was--I had 
given my recommendations. And I never received back one way or 
the other whether either recommendation was acceptable to the 
higher ups.
    Mr. Lankford. So you are continuing to wait on the 
Counsel's Office to be able to give your response back so that 
you could finish up these cases. You are waiting on a service 
position, not only just two and three, not only these two 
individual sensitive test cases that you are working with, but 
also trying to figure out what is going to be the broader 
perspective as well?
    Mr. Hull. If we were able to tell from the facts and 
circumstances of each particular case whether they should or 
not be recognized as exempt, then I could be able to tell Ms. 
Hofacre, that yes, if this organization was recognized as 
exempt and sent her the file if she so desired, so that she 
could find out what the story was. Or, since--if she was 
transferred, it would have gone to Mr. Bell.
    Mr. Lankford. Okay, but that's waiting on Counsel's Office 
to be able to respond back to you to be able to get that back 
to them.
    Mr. Hull. Yes, sir.
    Mr. Lankford. Okay, aside from the sensitive case reports 
that you created for the three Tea Party applications, did you 
create sensitive case reports for any other political advocacy 
cases between March 2010 and July 2011.
    Mr. Hull. Not that I'm aware of, sir.
    Mr. Lankford. You had mentioned earlier as well, ``further 
review is extremely rare.'' What did you mean by that?
    Mr. Hull. Usually, if my reviewer agrees with me, the case 
can go to the supervisor for signature. Usually, it's--most 
cases only last that far, application cases. Some application 
cases go further up to Ms. Kindell or someone else and some go 
to chief counsel.
    Mr. Lankford. Okay, but in this case, the reviewer agreed, 
is that correct, or----
    Mr. Hull. She neither agreed or disagreed. She just said 
that it should be forwarded.
    Mr. Lankford. It was just a hold on it. You also mentioned 
Lois Lerner at some point came in and said to some kind of 
training environment that these cases need to be referred to as 
advocacy applications, not Tea Party applications.
    Mr. Hull. That's correct.
    Mr. Lankford. Was that for all of these political or just 
for these particular Tea Party groups?
    Mr. Hull. Ms. Lerner seemed to indicate that any time we 
should use the word advocacy as opposed to Tea Party.
    Mr. Lankford. Not use Tea Party anymore, just call them 
advocacy groups and----
    Mr. Hull. Correct.
    Mr. Lankford. --but you knew that she was referring to the 
Tea Party groups. Just say said, don't say that; say advocacy 
applications only?
    Mr. Hull. Yes, sir.
    Mr. Lankford. Thank you, I yield back.
    Mr. Jordan. [Presiding.] I thank the gentleman.
    Ms. Lujan Grisham.
    Ms. Lujan Grisham. I want to talk about--I'm way over here. 
I'm sorry, you guys are going to break your necks getting all 
the way to the end of the hearing room. But it is my 
understanding that in the 2 years following the Citizens United 
decisions--decision which allowed social welfare organizations 
to directly spend money on campaign activities, the number of 
applications for 501(c)(4) status nearly doubled.
    In the testimony that I have heard today and in previous 
hearings, it becomes clearer to me that there is no political 
motivation, but there is confusion, at best, about what you do 
about the facts and circumstances review to figure out whether 
more than 49 percent of a 501(c)(4)'s funding has been spent 
directly on political activity. And following the line of 
questioning by my colleague from New York, Representative 
Maloney, I have such a bill that says that the 1959 
congressional law says, exclusive, that the IRS that the 
Treasury ruled later that said you can do 49 percent should 
never have been allowed, that now we have what is a 
disorganized, at best, complete mess, and I agree with this 
committee that however you are objectively trying to take 
subjective information and identify whether or not there has 
been a violation, has caused grave concerns by both--by this 
committee in particular.
    I think we should go back to exclusive, and the point that 
the chairman raised that they won't be able to advocate is not 
true, that in fact as long as they are taking the positions, 
501(c)(3)s are limited, and 501(c)(4)s are not, as long as they 
are taking an advocacy position in line with that organization, 
like the Cancer Society, or the Muscular Dystrophy Society, but 
engaged in broad political activity should not be allowed.
    You answered my colleague's question that, Mr. Hull, that 
that would certainly simplify this issue and allow the IRS to 
determine clearly and definitively who meets the standard for a 
501(c)(4) and who does not. Correct?
    Mr. Hull. It is very difficult to be able to say that an 
organization is involved 51 percent of their time in social 
welfare activities. There is no bright line that defines it, 
and it's the facts and circumstances, and they usually fall one 
way or the other, but there is no bright line at the present 
time.
    Ms. Lujan Grisham. And if they can still follow their basic 
501(c)(4) status, which means they can advocate their position 
and do their social welfare work, disengaging them from 
political activity should not harm those organizations. And is 
it also true if you want to engage in political activity, you 
can have a 527 or establish a super PAC, that there are many 
clear organizational structures that are not tax exempt that 
would allow you to engage directly in political activity. True?
    Mr. Hull. There are such organizations, yes.
    Ms. Lujan Grisham. And in those organizations, those donors 
would have to be disclosed. Correct?
    Mr. Hull. I do not know the answer to that question.
    Ms. Lujan Grisham. I believe that's correct. In that 
setting, it would be managing those efforts, just like Members 
of Congress are required to do? I think that's correct as well.
    And the point being that it seems, based on the testimony 
today and prior testimony, that the clearer way forward if 
we're going to solve the problem, which seems to me to be what 
we should do from here in out is that we should solve it, let's 
make the 501(c)(4)'s go back to exactly what Congress intended 
in 1959. They're exclusively for the purpose of social welfare.
    Mr. Chairman, I yield back the rest of my time.
    Mr. Jordan. I thank the gentlelady.
    The gentleman from Tennessee, Dr. DesJarlais, is 
recognized.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    And thank you both on behalf of the people of Tennessee's 
Fourth District and people across America. They're anxious to 
get to the facts on this case, and this case it not going away.
    One of your colleagues, Ms. Lerner, testified here briefly, 
and she proclaimed that she was innocent and did nothing wrong, 
and that very well may be the case, but I also believe that she 
knows a lot more, possibly a lot more than even the two of you, 
but yet she did not sit there and do what you're doing and 
testify.
    The big unanswered questions of all these hearings still 
is, why? You know, why were these groups targeted? And they 
were targeted. Mr. Werfel yesterday was kind enough to be one 
of the first to admit that the IRS did target conservative 
groups. Mr. Shulman, Miller and others were reluctant to say 
that.
    So do either of you have an opinion onto why these groups 
were targeted in this fashion, with your 62 years of combined 
experience?
    Mr. Hull. I have no--I--I can't answer that question. I 
have no idea why they were targeted.
    Mr. DesJarlais. Have you ever seen anything like it before?
    Mr. Hull. There--there were somewhat similar instances at 
one time, but that was a long time ago, and I'm afraid my 
memory is very dim about that.
    Mr. DesJarlais. It wasn't, like, 40 years ago, was it?
    I--Ms.--Ms. Hofacre, go ahead.
    Ms. Hofacre. I wasn't aware of any situation that was--
that-- where applications were treated in this fashion.
    Mr. DesJarlais. Okay. So pretty unusual. The other question 
is who. And we're starting to get an idea of who, when we had 
other folks here, Mr. Shulman. I assume that some of the people 
you've named today probably do interact with the commissioner. 
I don't know how high up they are, but do they actually 
interact with the commissioner, some of your bosses?
    Ms. Hofacre. I would imagine so. I mean----
    Mr. Hull. I have no knowledge of----
    Ms. Hofacre. I mean----
    Mr. Hull. --of their--of their----
    Mr. DesJarlais. Okay. Their testimony a while ago, they 
didn't know anything; they just knew that it was a couple of 
rogue agents in Cincinnati. That was the story. And I think 
we've dispelled that rumor. So we're still trying to find out 
who.
    And the President, you know, may not know anything about 
why this happened, but we do know, I think we proved today that 
one of his political appointees did know. Would you both agree 
with that? That this was going on, that this was being--this 
targeting was going on?
    Ms. Hofacre. I have no factual basis to agree or disagree.
    Mr. DesJarlais. Okay. The chief counsel is a political 
appointee, correct?
    Ms. Hofacre. From what I understand, that is correct.
    Mr. DesJarlais. Is that your understanding, Mr. Hull?
    Mr. Hull. Yes.
    Mr. DesJarlais. And you both have testified that these 
cases were sent to Chief Counsel's Office?
    Mr. Hull. Yes.
    Ms. Hofacre. I was just a made aware of that recently.
    Mr. DesJarlais. Okay. So, at any rate, there does seem to 
be somebody who doesn't want the truth to come out, because if 
there was nothing wrong done here, then we wouldn't be sitting 
here today, we wouldn't continue to have these hearings. Do you 
have agree with that?
    Mr. Hull. I have no knowledge of such a situation, sir.
    Mr. DesJarlais. Okay. Did you have a special expertise, Ms. 
Hofacre, in this area of Tea Party organizations or this type 
of case you were asked to do?
    Ms. Hofacre. I had no specific expertise in political 
organizations.
    Mr. DesJarlais. Any idea why you were assigned that?
    Ms. Hofacre. Oh, at the time, it was identified by 
management as an emerging issue, and I was the emerging--
emerging issue coordinator, so consequently, I was assigned the 
cases.
    Mr. DesJarlais. As you were doing these cases, both of you, 
did it ever dawn on you that this was kind of strange, there's 
something weird going on here, that this is abnormal, you know, 
maybe I should suggest this to someone?
    Ms. Hofacre. I did. I think that's--the fact that I pursued 
another job is evidence of that.
    Mr. DesJarlais. Mr. Hull, did you find this strange?
    Mr. Hull. I approached it as two organizations that have--
of which I was supposed to determine whether or not they were 
exempt. I did not go in any further type of speculation.
    Mr. DesJarlais. So you felt you were given an assignment, 
you were just doing your job?
    Mr. Hull. Yes, sir.
    Mr. DesJarlais. Okay. Did either of you think it was 
strange the type of questions they were being asked? There were 
some pretty unusual questions asked. Like donor information, do 
you think that that was inappropriate?
    Mr. Hull. I think----
    Ms. Hofacre. I--go ahead.
    Mr. Hull. I think they were inappropriate. And when I 
learned of that, I did talk to somebody and say that question 
should not be asked, because a (c)(4), it doesn't really matter 
where the money comes from. It's what the organization's 
activities are.
    Mr. DesJarlais. Wouldn't it make--as you were asked 
earlier, wouldn't it make your lives a lot easier if someone 
within the IRS, if this was designed within the IRS to target 
these groups, would just step up and say, you know, I did this. 
Or even if the President, somebody--if the President didn't 
know about it, wouldn't it make life easier if someone on the 
president's team who made this decision and sent it down to you 
would just step up and say, I did this, so the American people 
can start to regain the credibility that they deserve from an 
agency that expects so much of them?
    Ms. Hofacre. Sir, I cannot comment on that.
    Mr. DesJarlais. Okay.
    Mr. Hull. I wouldn't be able to comment either, sir.
    Mr. DesJarlais. Okay. I know that you guys are very brave 
to come forward. And really you're just telling the truth, and 
that's all we're asking from other people who come forward as 
well. So let me just say we very much appreciate that. And we 
hope for the sake of the country and everyone else that we do 
get the bottom of this, because there's obviously something to 
be determined. And thank you for your help.
    I yield back.
    Mr. Jordan. I thank the gentleman.
    We'll now go to the gentlelady from Illinois, Ms. 
Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    Mr. Hull, thank you for your years of military service in 
Vietnam.
    And of course Ms. Hofacre, for your over 13 years of 
service in the army.
    Mr. Hull, I would like to ask about the involvement of the 
IRS Office of the Chief Counsel in this process. It's my 
understanding that the IRS Office of the Chief Counsel 
sometimes reviews applications for tax exempt status in order 
to provide legal advice. Is that correct?
    Mr. Hull. Yes, ma'am.
    Ms. Duckworth. It's also my understanding that all 
501(c)(3) denials are reviewed by the IRS Office of the Chief 
Counsel as part of standard procedure. Is that correct?
    Mr. Hull. I believe that is standard procedure, yes.
    Ms. Duckworth. Okay. In this case, your boss asked the 
Chief Counsel's Office to review the two Tea Party cases you 
were working. Did you agree with that decision?
    Mr. Hull. I agreed the cases should go to the chief 
counsel, yes.
    Ms. Duckworth. Okay. Thank you. You know, we have talked to 
a number of your colleagues who agreed with the decision to 
obtain advice on these cases from the Office of the Chief 
Counsel. For example, the committee spoke with a tax law 
specialist who took over the Tea Party cases that you had been 
working, and you'd established that your workload was heavy; 
she took those over. She, in fact, has identified herself as a 
Republican to this committee, and she told us that on some 
issues, it was common to ask the IRS Chief Counsel's Office for 
assistance and to review applications for tax exempt status. 
And I just want to quote what she said. And she said, ``from my 
experience, it's been cases, applications that have received 
some media attention or that, like, in the (c)(4) instances, 
the law is really murky, those have been my experiences with 
the cases that I've had sent to them.'' And to ``them,'' she 
means the chief counsel.
    Mr. Hull, do you agree with your colleague that the cases 
that sometimes get sent to the chief counsel, the ones that are 
murky, that are difficult, that need further clarification?
    Mr. Hull. I don't believe I can comment on--on what reasons 
they--what reasons they gave to send to chief counsel. I'm not 
aware of--of those particular murky things.
    Ms. Duckworth. When you send cases to--when your cases that 
you've worked on that have gone to chief counsel, you said that 
if they're denied, then they go to the chief counsel. Were 
there other cases in your time that also went to chief counsel 
for further clarification?
    Mr. Hull. I don't recall any that--I believe the (c)(3) 
questions are going up if they're denials, because chief 
counsel would have to defend them, and that's why they go up 
there.
    Ms. Duckworth. I understand. Okay. Do you have any reason 
to believe that your colleague who took over your two cases is 
biased against Tea Party groups?
    Mr. Hull. I have no knowledge of that at all.
    Ms. Duckworth. Thank you. We also spoke, the committee 
spoke to an attorney in the IRS Chief Counsel's Office who 
attended a meeting about the two specific Tea Party cases and 
assisted with drafting guidance for the development of 
political advocacy cases in 2012. And we asked him whether it 
was appropriate for the office of chief counsel to review two 
of these two Tea Party cases, and he said this: ``It's 
customary, it would be--certainly be customary, it makes 
perfect sense that--I mean, you see, we have seen this 
situation before where they have a group of cases that they 
would send over sometimes to look at.''
    Mr. Hull, do you disagree with your colleague?
    Mr. Hull. I don't think I have enough knowledge to 
understand what--what he was getting at. My two cases, I--that 
went over to chief counsel, I'm not sure how long it had been 
since I'd sent a case to chief counsel.
    Ms. Duckworth. Okay. We also spoke with an employee who 
served as the Exempt Organizations Technical Unit Group manager 
in Washington, D.C., and this employee said it was quite 
typical to send to counsel cases that were particularly 
difficult or there was felt to be a need for further review of 
the case.
    Do you agree with the colleague--with this statement?
    Mr. Hull. I think that person would have had more knowledge 
of those cases than I. I'm not aware of all the cases that may 
or may not have gone to chief counsel.
    Ms. Duckworth. Okay. Mr. Hull, do you have any reason to 
believe that this decision to have the IRS Chief Counsel's 
Office review Tea Party cases was motivated by political bias?
    Mr. Hull. No, I do not.
    Ms. Duckworth. And so it seems to me that seeking advice 
from one of the 1,600 lawyers in the IRS on a complicated legal 
question seems reasonable. And numerous witnesses have told us 
that this was not a stalling tactic or evidence of a political 
bias, but in fact, at this time, it was common that if you had 
questions, that's why legal counsel was there, was to refer and 
ask them additional clarification. And, of course, you did talk 
about the fact that if they are denied, then they go right to 
the legal counsel.
    I, too, want to thank both of you for being here. I know 
that you were both moved off of these cases, Ms. Hofacre, 
because you went on to another position. Mr. Hull, your two 
cases when on to another employee. So sometimes when we're 
talking about these rogue agents, we're not necessarily talking 
about you, but that there are many people who were in this 
chain of confusion that led to these cases being delayed for a 
long period of time. Thank you so much for being here.
    I yield back, Mr. Chairman.
    Mr. Jordan. The gentleman from South Carolina is 
recognized.
    Mr. Gowdy. Thank you, Mr. Chairman.
    I have been fascinated by, and not necessarily in a good 
way, by the evolution of the defense in this case.
    Mr. Chairman, initially it started when Lois Lerner 
disclosed this information in a fashion most calculated to be 
ignored, with a planted question at some boring conference.
    And then the second iteration of this defense was blaming 
two rogue agents in the Ohio field office.
    And, Mr. Chairman, make no mistake, Jay Carney advanced and 
furthered that narrative, and he did so intentionally. You 
know, Mr. Carney's willingness to say, ``I don't know,'' is 
exceeded perhaps only by his willingness to acknowledge that he 
appreciates the question, but he didn't say, ``I don't know.'' 
He advanced the narrative that two rogue agents were 
responsible for this insidious discriminatory practice.
    And then we had colleagues that said this matter was closed 
months ago, Mr. Chairman, the matter was closed.
    And then the new iteration of the defense is, well, at 
least the White House isn't directly involved, as if that's the 
new standard for propriety in this town, that at least the 
White House directly didn't know about it. So that's our 
defense.
    And then the defense, Mr. Chairman, morphed into this, the 
most novel of all defenses, that the IRS is too poorly managed 
to be capable of concocting a scheme this sophisticated. That 
was the defense, that my client's too dumb to have committed 
this crime.
    And then, Mr. Chairman, we moved to the most recent 
defense, which is that, no, we didn't just improperly target 
conservative groups; we improperly targeted all groups. So 
while we may be guilty of improper conduct, we're not guilty of 
discrimination, because we did it against people at both ends 
of the political spectrum. So--so that's our defense.
    And now to see the inspector general attacked. And Mr. 
Chairman knows it was an axiom in court, if you had the facts, 
pound the facts; if you had the law, pound the law; if you 
didn't have either one, pound the judge. And what has been said 
about Mr. George is reprehensible, and I can't wait until he 
has an opportunity to defend himself.
    But let me tell you what else is reprehensible, Mr. 
Chairman, Lois Lerner sat where those two witnesses sit today 
several weeks ago, and these two witnesses put on a uniform and 
fought and defended this country and the Constitution so she 
could hide behind the Constitution, invoke her Fifth Amendment 
right, but only after she blamed them. She blamed two rogue 
agents in Ohio and then didn't have the courage that these 
witness--I ought to just be thankful any time IRS agents don't 
invoke the Fifth Amendment. I ought to be glad that anyone's 
willing to come before a committee of Congress and testify, but 
to have these two people's reputation or whoever she was 
talking about besmirched by someone who doesn't even have the 
courage to come do what they're doing?
    Mr. Hull, I appreciate your modesty. It's not something we 
see very often in this town, but you have been in service to 
the IRS for exactly as long as I've been alive, 48 years, so 
whether you want to be called an expert or not, you are one, by 
virtue of your training and your expertise and your education.
    And so are you, Ms. Hofacre, you're both experts. And if we 
were in a court of law, the defense would stipulate that you're 
experts. They wouldn't even challenge it.
    So I've heard about the complexities and I've heard about 
the novel issues, but--but, Mr. Hull, there's nothing novel 
about political activity. It's been going around since before 
the country was founded. So that part of your analysis, what 
was novel about that? What's novel about determining political 
activity?
    Mr. Hull. Each case is looked at. It depends on the facts 
and circumstances of each particular case.
    Mr. Gowdy. And you've done it a hundred times, times a 
hundred times, right?
    Mr. Hull. I'm--I'm not aware of how many political cases I 
may have worked. That's----
    Mr. Gowdy. Is it because you can't count that high? I mean, 
it's a lot, right?
    Mr. Hull. I can't remember that far back, sir.
    Mr. Gowdy. Well, I can't either. I can't either. But 
there's nothing new about political activity. And our numeric 
code, we've had since, Lord knows when. I think it's Arabic, 
but--but ascertaining 50 percent is not a new phenomena.
    So--so, Mr. Chairman, I'm out of time. I'm just vexed by 
the complexity that our colleagues on the other side of the 
aisle talk about. It's political activity; 50.1 percent will 
disqualify you. And the Tax Code's been around forever, so 
what's new about this? Why did we have to have test cases? Why 
did we have to have Washington involved on what strikes me as a 
pretty simple analysis. But I'm out of time, and I yield back 
to the chairman.
    Mr. Jordan. Thank the gentleman.
    The chair now recognizes Ms. Norton. I'm sorry. I didn't 
know which of the three were next on the list.
    Ms. Norton, you're recognized, the gentlelady from D.C.
    Ms. Norton. Thank you, Mr. Chairman.
    Without trying to answer the gentleman's question about 
complexity, there could be a great deal of complexity when you 
tell someone that something has to be 51, ``political.'' The 
most pregnant word in the English language is the word 
political, what is political and what is not political.
    And I want to congratulate these two civil servants for 
having the courage to come forward before this committee. These 
are civil servants of the IRS, which this Congress has cut by 
30 percent. President won't sign that. It will not get through 
the Senate. But out of retaliation somehow against what we are 
told is targeting by agents, rogue agents. I don't see any 
rogue agents. I see civil servants who are heros and who are 
trying to--to deal with the complexities, and it has lots of 
complexities, that come before you every day. And I 
congratulate you for the way you do it.
    I don't see targeting, even. I don't see confusion. You get 
into targeting, we're into one to one. This is what I see, and 
I want to--my question really goes to it. Forgive me for 
getting out the statute, but it says, concerning these social 
welfare organizations, that they must be operated exclusively 
for the promotion of social welfare, and they say if it is 
primarily engaged in promoting in some way the common good and 
general welfare of the people of the community.
    Then it goes on to define what it means by ``exclusively'' 
to say an organization embraced within this section is one 
which is operated primarily for the purpose of bringing about 
civic betterments and social improvements.
    I say, I wouldn't want to be in your position to look first 
at the words ``exclusively,'' then ``primarily,'' and then 
trying to figure it out.
    I cite that because I don't see what so many are looking 
for here, and I want to find it if I can. So I look to see, 
well, why would anybody pick out anybody. And I noted that 
after Citizens United--and remember, we're talking about a 
501(c)(4), so what do you get from wanting to be a 501(c)(4)? 
Well, you don't get any tax exemption, but you don't have to 
disclose your donors and you can raise apparently unlimited 
funds, if I'm correct on that. Is that true, you can raise 
unlimited funds for a 501(c)(4), Mr. Hull?
    Mr. Hull. Yes, ma'am.
    Ms. Norton. Now, there was a surge in spending, because the 
figures are in now on the surge in spending in the last 
campaign. Almost 85 percent of that surge, or that--those funds 
for--for 501(c)(4) organizations went to--and others, went to 
organizations which have conservative viewpoints.
    Now, it--after Citizens United, it would not be unusual, 
would it, for those who wanted to spend a lot of money and had 
access to it, that is their right in this country, to take 
advantage of a court decision and come forward in the numbers 
that they had not done before. Could that not be reflected in 
seeing this large surge where you were assigned to look for--
look at this special group called Tea Party-type applications?
    Mr. Hull. Did you have a particular question, ma'am?
    Ms. Norton. Yes. Whether or not you think the--the 
opportunity for spending unlimited amounts of money opened the 
door for people who had that money to spend to come forward, or 
had access to it, to come forward and say, please give us this 
status which we have not had before? Wouldn't that--if you knew 
you could get funds in a way you had not thought of before, 
because you now can get unlimited funds, there would be reason 
to come forward and ask for the status that you had not done 
before?
    Mr. Hull. I'm sure there would be.
    Chairman Issa. The gentlelady's time has expired. We now go 
to--but if there's a pending question anyone wants to answer, 
go ahead.
    Ms. Hofacre. Can we have a short break?
    Chairman Issa. We'll take a 5-minute break now. Thank you.
    Ms. Hofacre. Thank you.
    Chairman Issa. Stand in recess.
    [Recess.]
    Chairman Issa. While people are taking their seats, I want 
to announce that we expect a series of votes. It is our hope 
that we will complete this panel by the time we leave for the 
votes. If we do, then we'll pick up the next panel afterwards.
    I must also announce for members that by agreement with the 
minority, there will be concurrent--or concurrent full 
committee and subcommittee hearings, so it's your 
responsibility to go back and forth. And we will accommodate 
people as they come in to take care of that.
    With that, we go to the--Mr. DeSantis.
    Mr. DeSantis. Thank you, Mr. Chairman.
    Thank you to the witnesses for your time. You know, as I've 
been sitting here through this whole ordeal, one consistent 
theme has been the refusal of higher ups in the IRS to take any 
responsibility for the malfeasance within the agency. We had 
Douglas Shulman testify in front of this committee, and he said 
that while this impropriety happened on his watch, that he was 
not, in fact, responsible even though he was the IRS 
commissioner at the time. Lois Lerner, of course, famously 
blamed rogue agents in Cincinnati for illicit targeting. Even 
the White House press secretary, Jay Carney, falsely claimed 
that political targeting was perpetrated by line personnel in 
Cincinnati.
    As the witnesses have explained today, the lack of response 
by the IRS to applications for tax exempt status effectively 
froze these Tea Party groups in place and was even worse than a 
denial, because the groups could not appeal a non-decision. And 
so I think it had a--a very tangible effect on these groups' 
ability to organize, but as I go through this, I keep coming 
back to Lois Lerner and her role in all this. It seems to me 
that she's left behind a trail of misinformation and 
obfuscation. As the testimony demonstrated today, Lerner 
deliberately misled the public and the Congress by blaming 
rogue agents in Cincinnati for something that she knew was 
being orchestrated from Washington, D.C.
    And as the witness testified, this was akin to a nuclear 
strike against employees in Cincinnati. They were the ones that 
she wanted to throw under the bus. No responsibility for her; 
blame people beneath you who may not be able to defend 
themselves effectively.
    And even worse than that, she tried to cloak the illicit 
targeting that she knew about by ordering that employees use, 
``advocacy groups,'' a neutral sounding term, in lieu of, ``Tea 
Party,'' which of course denotes a conservative group.
    And I just found it interesting that a couple years ago it 
was reported that she referred to thick IRS questionnaires, 
those being sent to somebody, as being, ``behavior changers.'' 
Some of us would think that that would constitute harassment if 
it's being illicitly done, but for her it's a behavior changer.
    So I think Lois Lerner needs to answer for her behavior. 
This committee found that she waived her Fifth Amendment rights 
when she testified in front of the committee. I think she 
should be required to testify.
    As we get more and more information, it's becoming 
increasingly clear to me that if there were any, ``rogue 
agents'' during this or deal, that rogue agent was Lois Lerner.
    That's all I have, Mr. Chairman. I yield back the balance 
of my time.
    Chairman Issa. Would the gentleman yield to me?
    Mr. DeSantis. Yes, sir.
    Chairman Issa. I want to take a point of privilege for a 
moment. Earlier, like many people from the chair, you say 
something and you take a shortcut. And I want to make sure I 
make something very clear. When I referred to my ranking 
member, who when we're not sparring over politics, he and I 
work very well together, I talked about effectively me thinks 
he doth protest too much as we debate the question of whether 
things not being rogue agents in Cincinnati but rather being in 
Washington at various levels that we're discussing here today, 
which include the--the Office of the Counsel and Lois Lerner, 
and I've been offended by my ranking member wanting to defend 
the White House, who I have not accused. But I took a shortcut 
in how I expressed it, and I want to make it very clear that 
when I talk about the little boy putting his hand in the cookie 
jar, I'm talking about the, I--what cookie jar? What hand? And 
that is something that I grew up with. It is intended to be 
about a small child, and in no way the use of ``boy'' or 
``little boy'' to be anything else. Ranking member and I enjoy 
a personal relationship that is by definition strained because 
of our jobs, but not because of how we respect each other.
    So, Mr. Cummings, I want to make it very, very clear that 
that difference of opinion should always be expressed in a way 
that you understand, that you and I disagree sometimes about 
policies, but never about our individual roles. And--and I want 
to make sure that's clear, because the press, I think, took the 
use of little boy in a way that would certainly never come out 
of my thought, much less deliberately out of my mouth.
    And to the extent that anyone gets offended, Mr. Cummings, 
I certainly do not want it to be you.
    Mr. Cummings. Thank you very much, Mr. Chairman. I really 
do appreciate your words. Words can certainly be taken out of 
context and taken and twisted, whatever, but I do appreciate it 
and I know you mean that.
    We--like you said, we are--we differ sometimes on our 
views, but at the end of the day, the respect level is still 
extremely high, and so I really appreciate that.
    Chairman Issa. Thank you, Mr. Cummings.
    I thank the gentleman.
    The gentleman from Illinois, Mr. Davis, has the full 5 
minutes.
    Mr. Davis. Well, thank you very much, Mr. Chairman.
    And I want to thank our witnesses for not only their 
stamina, but also for the--what I call their careful, 
analytical and professional way in which they have responded to 
many highly subjective questions. And so I appreciate both 
your--your long service to the agency as well as your 
professionalism.
    Yesterday, the principal deputy commissioner of the 
Internal Revenue Service, Danny Werfel, testified before this 
committee that progressive groups received treatment from the 
IRS that was similar to Tea Party groups when they applied for 
tax exempt status. In fact, Congressman Sandy Levin, who is the 
ranking member of the Ways and Means Committee, explained these 
similarities in more detail. He said the IRS took years to 
resolve these cases, just like the Tea Party cases. And he said 
the IRS, one, screened for these groups, transferred them to 
the Exempt Organizations Technical Unit, made them the subject 
of a sensitive case report, and had them reviewed by the Office 
of Chief Counsel.
    According to the information provided to the Committee on 
Ways and Means, some of these progressive groups actually had 
their applications denied after a 3-year wait, and the 
resolution of these cases happened during the time period that 
the inspector general reviewed for its audit. Unfortunately, 
because the inspector general objected to the release of this 
information to the public, I can only ask you about these 
groups only in a vague manner.
    Ms. Hofacre, were you aware of the existence of any 
groupings of progressive organizations within the 
Determinations Unit?
    Ms. Hofacre. Sir, when I was involved in the project in 
2010, I was not aware of any such grouping.
    Mr. Davis. Were you aware of how these cases were being 
processed?
    Ms. Hofacre. In 2010, no, I do not have any awareness of 
how they were being processed.
    Mr. Davis. Did you know that they were being treated in a 
manner that was similar to your Tea Party groups?
    Ms. Hofacre. I have no knowledge of that, sir.
    Mr. Davis. Mr. Hull, let me ask you. I understand that you 
were not assigned any of these progressive groups. Do you know 
who in the Washington Technical Unit was assigned these 
applications?
    Mr. Hull. No, sir, I do not.
    Mr. Davis. Do you have any information you can share with 
the committee about how such groups were screened or reviewed?
    Mr. Hull. No, sir, I do--I cannot.
    Mr. Davis. According to Ranking Member Levin, who has been 
able to review the names of these categories of groups, key 
terms to search for these groups are included in the screening 
workshop training's slide show from July of 2010. It appears 
from that document that screeners were told to; ``Look for 
names like the ones for these groups as well as for the terms 
``Progressive'' and ``Tea Party'' and ``Patriot'' and ``9/12 
Project.''' Certainly from this document, it appears that the 
Tea Party groups were not treated differently than progressive 
groups; rather, they appear to be handled in a similar manner.
    Mr. Hull, do you agree that in order to determine whether a 
group has been singled out and treated differently than its 
peers, it is important to review how all similarly situated 
groups were handled?
    Mr. Hull. I think that's above my grade level, sir. I 
wouldn't be able to comment on that.
    Mr. Davis. All right. But to me, based on the evidence 
before us, the inspector general's report did not tell us the 
full story of how the Internal Revenue Service handled 
applicants with political advocacy issues between 2010 and 
2012. I hope that the reviews will provide relevant information 
and those corrections can be made.
    I thank you again both.
    And I yield back the balance of my time.
    Chairman Issa. I thank the gentleman. We're now going to 
complete our--as fast as we can as many as we can before we 
have to go to the vote.
    At this point, I show Mr.--Dr. DesJarlais--I'm sorry.
    Mr. Meehan, if you'd please go next.
    Mr. Meehan. Thank you, Mr. Chairman.
    And I want to thank you for your perseverance today, both 
of the witnesses. And I have struggled just to sort of find out 
as we continue to pursue, you know, what's happening with these 
Tea Party cases, I'd like to go back and put these things into 
context. I'm just trying to find out at a baseline how cases 
were handled normally, Ms. Hofacre, before--before Tea Party 
got put into--to your life.
    So, first, you were working in a division that the 
responsibility for you was to make decisions about people who 
were applicants for these 501(c)(4) designations. Is that not 
accurate?
    Ms. Hofacre. Yes, sir.
    Mr. Meehan. And in that period of time, you had to make 
decisions numerous times about the very characteristics that 
we've identified here, that would include the possibility that 
some of it might be political activity and some of it may be 
advocacy for their--for their activity, correct?
    Ms. Hofacre. Sir, I worked cases that had all different 
activities. I--I worked 501(c)(3)'s, all different tax exempt 
codes.
    Mr. Meehan. And once you made those decisions, what did you 
have to do? When you made a conclusion that that passed muster, 
what happened then?
    Ms. Hofacre. Sir, we would have work papers and we would 
provide a summary of the case. We used the appropriate law and 
then come to some kind of conclusion. And then I would 
recommend approval to our manager, and then he would decide 
whether or not to sign off and approve the case.
    Mr. Meehan. And if your manager approved and signed off on 
the case, what happened then?
    Ms. Hofacre. Well, if the case were not mandatory review, 
it--the applicant would get exemption, and they would get their 
letter. If it were mandatory review, it would go through 
another level.
    Mr. Meehan. What creates mandatory review?
    Ms. Hofacre. Well, it can be manager designated. We have an 
internal revenue--internal revenue manual that designates 
numerous cases mandatory review?
    Mr. Meehan. And that's what happened with the Tea Party 
cases at one point in time?
    Ms. Hofacre. It may have down the road after I left.
    Mr. Meehan. Okay. But normally, you were able to make the 
recommendation. Your supervisor, presumably in Cincinnati, then 
approved it. And in the normal course of business, many of 
those cases then were--the exemption was granted, and they went 
on their way.
    Ms. Hofacre. That is correct.
    Mr. Meehan. Okay. When--when--when you were making those 
calculations, there were questions you asked. Who designed the 
questions?
    Ms. Hofacre. Sir, the individual agent, myself, designed 
the questions based on the information typically in the file.
    Mr. Meehan. And, once again, that was part of your--your 
analysis, but you weren't--nobody else was looking at the 
questions that you were asking to make that calculation, were 
they?
    Ms. Hofacre. Generally, that is correct.
    Mr. Meehan. Okay. Now, when you were assigned this special 
class of cases that were now going to seek approval of--working 
on the Tea Party cases, is this the first time that you then 
had to automatically make sure that it went to EO Technical?
    Ms. Hofacre. Yes, sir, that would be correct.
    Mr. Meehan. Now, when you met--asked the questions at the 
outset, did you design that questionnaire?
    Ms. Hofacre. Well, Mr. Hull had provided me copies of the 
letters he had sent to his applicants, and I used those and 
tailored them to my particular applicants' activities.
    Mr. Meehan. And, Mr. Hull, did you design those to--all of 
the questionnaires that were used in the applications for the 
Tea Party?
    Mr. Hull. With regards to those--the two cases that were 
assigned to me.
    Mr. Meehan. Simply two cases?
    Mr. Hull. Two cases.
    Mr. Meehan. Okay.
    Mr. Hull. I prepared a letter asking for additional 
information from the organizations. No one reviewed it. I 
signed it.
    Mr. Meehan. Just a letter asking for additional----
    Mr. Hull. Just a letter asking for----
    Mr. Meehan. How complex was that letter? Was it a lot of 
issues that were being asked for?
    Mr. Hull. I don't recall the exact number of questions, but 
usually it wasn't more than a page of questions or maybe a page 
and a half. It would depend on what the facts----
    Mr. Meehan. Okay. A page--a page and page and a half.
    Mr. Hull. It would depend on the circumstances, sir.
    Mr. Meehan. Okay. Ms. Hofacre, did you get any other 
extensive questionnaires that were directed to you from 
Washington, D.C.?
    Ms. Hofacre. No, I did not.
    Mr. Meehan. At that point in time, okay, you did not ask 
those questions. All right. When you forwarded these to Mr. 
Hull, then, which was EO Technical and it was your 
responsibility, Mr. Hull, to in all of the cases or in only in 
a few of these to make decisions on the recommendations that 
were made by Mrs. Hofacre with--with regard to Tea Parties?
    Mr. Hull. In the beginning, when the first applications 
came in, there was a--there was a manager that overlooked it 
with me, and he decided at the end of the first group, he said 
he didn't need to see any more. So I--I looked at all the 
questions that Ms. Hofacre----
    Mr. Meehan. And that changed? How did it change and when 
did it change?
    Mr. Hull. How did--which change?
    Mr. Meehan. Well, he decided that he didn't need to see any 
more, so I'm presuming that you then made determinations, sent 
them back down to Cincinnati in the beginning, as you stated, 
with some of these cases, and that was the resolution, and it 
was either granted or appealed. Is that accurate?
    Mr. Hull. I made suggestions to Ms. Hofacre on these 
letters that were to be sent out for information.
    Mr. Meehan. And when did it change that there was a 
requirement for you not simply to send it back down to her with 
those recommendations, but that you had to send it two other 
places, including chief counsel for resolution?
    Mr. Hull. I had to send the two cases to chief counsel to 
find out exactly what--what would be appropriate as far as they 
were concerned, at which point, it went--when I finally learned 
what was appropriate, then I would be able to tell Ms. Hofacre 
how she might want to tailor her questions.
    Mr. Meehan. Okay.
    Chairman Issa. If the gentleman could wrap up.
    Mr. Meehan. Yes. I--I want to thank you. I was just simply 
asking about routine process. Thank you.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Massachusetts, Mr. Tierney, 
who will complete this panel. And you will be excused following 
his questions.
    Mr. Tierney. And I'll do it quickly. Thank you.
    Just on the reform side of things, both of you have had an 
extensive history with the agency, and we thank you for your 
service and your experience, but let me ask you to put that 
experience to work. Do you have any suggestions as to how this 
process might be speeded and made to run more smoothly and to 
resolve some of the issues that bring us here today?
    Mr. Hull. I never thought about suggestions in that regard, 
sir.
    Mr. Tierney. I'm sorry?
    Mr. Hull. I never thought about suggestions in that regard, 
sir, as to how it might go faster. It--it never occurred to me.
    Mr. Tierney. Okay. Ms. Hofacre?
    Ms. Hofacre. Sir, there are so many unknown variables and 
facets to a question like that. I'm not in a position to give 
an answer.
    Mr. Tierney. Okay. I only say it because, I mean, part of 
the problem, I mean, people thought they were getting delayed 
and delayed on that, and it seemed to me endemic to the entire 
system on that. So I didn't know if it was a lack of manpower, 
if it was a lack of clear guidance, or what it might be, but if 
you haven't thought about it, then you haven't thought about 
it. And I thank you.
    I'll yield back my time.
    Chairman Issa. I thank the gentleman.
    That allows us to dismiss the panel. I want to thank you 
for your years of service, and I want to thank you for your 
patience with, if you will--and I'm not trying to be--unkind, 
but we know you were asked the same questions over and over 
again. We know you heard the same speeches over and over again, 
but you have moved us in a decisive way toward our next level 
of investigation. And I did not expect to ask you to come back. 
I do expect you to enjoy your retirement, Mr. Hull.
    And Ms. Hofacre, I hope your career is as long as you want 
to have it. Something tells me it may not be 48 years, but 
hopefully----
    Ms. Hofacre. No.
    Chairman Issa. --we have not diminished----
    Ms. Hofacre. It's all right.
    Chairman Issa. --your--your confidence in Congress.
    Mr. Cummings.
    Mr. Cummings. I'll be very brief.
    I actually want to thank both of you for your service and I 
thank you for being here.
    Ms. Hofacre, I got to tell you, one of the most painful 
things that I've heard since I've been here is when you said 
that there were some threats or whatever to you and your 
family. You know, that--that is totally unfortunate. If there's 
anything that we can do, and I know the chairman joins me in 
that, and all our members, we want to make sure that we do what 
we can to help you.
    And, again, to you Mr. Hull, thank you very much, and your 
testimony has been quite helpful. Thank you.
    Ms. Hofacre. Thank you.
    Mr. Hull. Thank you.
    Chairman Issa. We stand in recess for the next panel.
    [Recess.]
    Chairman Issa. The committee will come to order.
    Thank you for your patience and indulgence during the panel 
and the recess.
    We now welcome our second panel of witnesses. The Honorable 
Russell George is the--is Treasury's inspector general for tax 
administration. He comes today with Mr. Michael McCarthy, who 
is the chief counsel for Treasury inspector general for tax 
administration, in other words, your counsel, and Mr. Gregory 
Kutz, who is the assistant inspector general for Treasury 
inspector general for tax administration. In other words, 
you're the guy that digs into it.
    Chairman Issa. Pursuant to the committee rules, as you all 
know, and Michael particularly you know, would you please rise 
to take the oath?
    Do you solemnly swear or affirm that the testimony you're 
about to give will be the truth, the whole truth and nothing 
but the truth.
    Please have a seat. Let the record reflect that all 
witnesses answered in the affirmative.
    Since I understand that there will only be one opening 
statement for all three of you, given by inspector general, we 
will not observe the 5 minutes. Take the time reasonably you 
need. You're effectively the only witness.
    And, Mr. McCarthy, welcome back. I know that, for many 
years, you worked from this side of the dais for Mr. Towns and 
others, and that you wondered what it would be like on that 
side. Today you find out.
    Mr. McCarthy. Thank you, Mr. Chairman. I look forward to 
it.
    Chairman Issa. Thank you.
    The gentleman is recognized.

          STATEMENT OF THE HONORABLE J. RUSSEL GEORGE

    Mr. George. Thank you, Chairman Issa, Ranking Member 
Cummings and members of the committee.
    Thank you for the opportunity to address specific issues 
that have been raised related to our report, published May 
14th, 2013, on inappropriate criteria used by the Internal 
Revenue Service to identify tax exempt applications for review.
    Our report included three key findings: first, that the 
Internal Revenue Service used inappropriate criteria that 
identified for review organizations applying for tax exempt 
status based upon their names or policy positions, rather than 
on tax exempt law and Treasury regulations; second, that the 
cases that the IRS referred for review as potential political 
cases experienced delays; and third, the IRS made unnecessary 
and burdensome requests for information.
    On May 10th, 2013, at an American Bar Association 
conference held in Washington, D.C., Lois Lerner, the director 
of exempt organizations for the IRS at the time, stated, 
``Instead of referring to the cases as advocacy cases, they 
actually used case names on this list. They, the Determinations 
Unit in Cincinnati, Ohio, used names like Tea Party or 
Patriots, and they selected cases simply because the 
applications had those names in the title. That was wrong. That 
was absolutely incorrect, insensitive and inappropriate.''
    She also stated that some cases were delayed and 
unnecessary questions were asked, confirming the three key 
findings of our report. The story line based on Ms. Lerner's 
presentation was that the IRS had apologized for 
inappropriately targeting conservative organizations.
    Ms. Lerner made her statements on May 10th, 2013, before 
our audit was completed and issued on May 14th, 2013.
    It has been asserted that TIGTA concluded that the IRS 
inappropriately targeted conservative organizations. However, 
that narrative is based upon Ms. Lerner's statements, not on 
TIGTA's conclusions. It is imperative for me to emphasize that 
our audit never labeled groups as conservative or liberal.
    TIGTA reviewed the process used by the IRS from May 2010 
through May 2012 to screen cases for potential political 
campaign intervention, in other words, advocating for or 
against a candidate running for political office.
    As of the end of May 2012, the IRS provided TIGTA a list of 
298 organizations that it, the IRS, had selected for further 
scrutiny. The report focuses on the terms, ``Tea Party, 
Patriots and 9/12, is at the--IRS provided us a document at the 
beginning of our audit that showed these were the terms they 
used to select the potential political cases.
    I submit for the record a document that the IRS provided to 
my organization on May 17th, 2012, while we were still in the 
planning phase of our audit. This document is purported to be 
the language used in the ``Be on the Look Out,'' otherwise 
known as BOLO listing, over time to describe potential 
political cases.
    Mr. George. We focused our audit on the BOLO entries shown 
in this document precisely because the IRS represented that 
these were the criteria relevant to potential political cases. 
Furthermore, the IRS provided us additional names and policy 
positions that were used to select cases, including Patriots 
and 9/12.
    The scope of our audit included the process the IRS used to 
review applications for tax exemption from groups potentially 
involved in political campaign intervention. During the audit, 
our understanding was that the other BOLO entries were not used 
to select cases for this type of specialized review. As new 
information emerges, we are continuing to review whether this 
is accurate. In interviews, emails and documents, we found 
repeated discussions of the use of Tea Party and other related 
criteria described in our audit report.
    New documents from July 2010 listing the term, 
``progressive,'' but noting that progressive are not considered 
Tea Parties were provided to TIGTA last week on July 9th, 2013. 
They were not provided during our audit, even though similar 
documents that ``Tea Party,'' but not progressive were. I am 
very disturbed that these documents were not provided to our 
auditors at the outset, and we are currently are you're viewing 
this issue.
    To follow up on the information that other terms like, 
``progressive and Occupy,'' appeared in various sections of the 
BOLO list, we conducted additional analyses to provide you, 
Members of Congress, with the data that we had due to the 
interest in this issue. However, we do not have full audit 
findings on the use of these other criteria.
    With respect to the 298 cases that the IRS selected for 
political review, as of the end of May 2012, three have the 
word ``progressive'' in the organization's name; another four 
were used--are used, ``progress,'' none of the 298 cases 
selected by the IRS, as of May 2012, used the name ``Occupy.''
    I know you have questions, and so do we, on the other Be on 
the Look Out listings, but from the date of the May 17th, 2012, 
document until we issued our report 1 year later, IRS staff at 
multiple levels concurred with our analysis citing Tea Party, 
Patriot and 9/12 and certain policy positions as the criteria 
the IRS used to select potential political cases.
    Although our audit was focused on the processing of 
potential political cases, we were concerned about the 
appropriateness of other criteria appearing in BOLO listings. 
We took prompt action after our report was issued to follow up 
on those concerns and communicated them to Congress, consistent 
with legal restrictions on the release of confidential taxpayer 
information. The names of the 298 groups and the majority of 
the information on the BOLO listings are return information, as 
defined under Title 26, United States Code, Section 6103, and 
thus TIGTA is prohibited by law from disclosing this 
information to members of this committee and to the public.
    However, we did provide this information to the acting 
commissioner, Danny, or Daniel Werel, on May 28, 2013, and 
recommended that he review whether BOLO listings were still in 
use and whether they were appropriate. He has since announced 
that he has taken action on this suggestion and restricted the 
use of Be on the Look Out listings.
    We also provided this information and briefed staff on the 
committees authorized by statute to receive tax information, 
the House Committee on Ways and Means and the Senate Committee 
on Finance, in early June of 2013.
    Our Office of Audit also referred the IRS's use of other 
BOLO listings to TIGTA's Office of Investigations for further 
review.
    The letter from Ranking Member Cummings to the chairman, 
dated July 12th, 2013, states that I failed to disclose to 
Congress that we had no evidence of political motivation.
    With all due respect, I believe the record shows otherwise. 
When I testified before this committee on May 22nd, 2013, 
Representative Cartwright inquired as to whether TIGTA saw any 
evidence that IRS employees were politically motivated in their 
creation or use of the inappropriate screening criteria. I 
stated unequivocally, ``we received no evidence during the 
course of our audit to that effect.''
    In addition, when I testified before the House Committee on 
Ways and Means, on May 17th, 2013, Ranking Member Levin 
inquired, ``did TIGTA find any evidence of political motivation 
in the selection of the tax exemption applications,'' I 
responded, ``we did not, sir.''
    The letter from Ranking Member Cummings also states that I 
may have improperly prevented disclosure of relevant 
information. That is not correct. Career TIGTA and IRS 
attorneys independently determined that certain taxpayer 
information should be redacted. Following that decision, the 
IRS told us it had changed its mind about one BOLO entry. This 
was an interpretation that we requested additional information 
about, and our lawyers continue to have a dialogue regarding 
it.
    It is important that I be clear on this point. None of this 
information has been withheld from Congress. TIGTA provided it 
in an unredacted form to the tax committees entitled to receive 
this information weeks ago.
    Since the issuance of our report, on May 14th, 2013, 
Congress, the Department of Justice, the Internal Revenue 
Service and TIGTA have been reviewing the issues surrounding 
the IRS' processing of tax exempt applications. As such, we 
understand that additional questions may be raised and 
additional issues may need to be reviewed.
    Permit me to conclude by saying that when Ms. Lerner 
revealed information on our unissued report on May 10th, 2013, 
her statements confirmed the findings in our report. In fact, 
as previously noted, we provided IRS officials with several 
opportunities to comment on our findings, and they consistently 
agreed that, ``Tea Party,'' and related criteria described in 
our report were the criteria that the IRS used to select cases 
for review of potential political campaign intervention during 
the 2010 to 2012 time frame that we reviewed.
    Chairman Issa, Ranking Member Cummings, members of this 
committee, this concludes my testimony.
    [Prepared statement of Mr. George follows:]
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    Chairman Issa. Thank you. Thank you all three for being 
here today.
    Mr. George, USC 26, 6103 was created by Congress, right?
    Mr. George. Yes. That is correct.
    Chairman Issa. But the rules and the interpretation to a 
great extent come from the IRS itself. Is that correct?
    Mr. George. That is my understanding.
    Chairman Issa. And the intent, as far as you know, of 6103 
was in fact to protect confidential information from Members of 
Congress and others diving into it and extracting personal 
information for whatever use that would be thus inappropriate. 
Is that right?
    Mr. George. Among many others, not just Members of 
Congress.
    Chairman Issa. Right. And there is good caselaw for why a 
law like that would be on the books.
    Let me ask you first a question. Are you interpreting 6103, 
in your years since I guess 2004, and your two deputies there, 
substantially the same as your predecessors?
    Mr. George. Yes.
    Chairman Issa. Does it frustrate you that often a victim 
can, in fact, be denied the ability to get information as a 
result of that law?
    Mr. George. It is extremely frustrating, Mr. Chairman. And 
it's actually counterintuitive that someone who may be the 
victim of a tax-related crime, incident, what have you, can 
complain to us, can complain to Members of Congress, and that 
we have limited opportunity to provide them with an outcome of 
any investigation that we conduct.
    Chairman Issa. Now, our own House counsel has explained to 
us many, many times that, under speech and debate, we can take 
a great deal of information and use it on the House floor in an 
official committee in ways that the executive branch objects 
to.
    But I want to get specifically into Mr. Cummings and I 
receiving what, rightfully or wrongfully, has been interpreted 
as 6103. Isn't it true that each body, the Senate and the 
House, produce their own rules as to who receives 6103?
    Mr. George. That I will defer to my chief counsel on, sir.
    Mr. McCarthy. Mr. Chairman, the House rules and the Senate 
rules, they can determine. The way the statute is written is 
that the chairman of the Committee on Ways and Means, the 
chairman of the Committee on Finance in the Senate, and the 
staff director of the Joint Committee on Taxation can make 
requests for information from the Treasury Department.
    Chairman Issa. And share it.
    Mr. McCarthy. And then they can designate who they will 
share it with.
    Chairman Issa. So if I----
    Mr. McCarthy. However, in closed session, in some 
circumstances.
    Chairman Issa. Sure. No, I understand.
    But, of course, they also can make the final determination 
on whether they agree with the 6103 or not, as a body. So when 
they get unredacted information, they, then, in the ordinary 
course, usually work with your organization, Mr. George, and 
make decisions on what should be redacted before release. Is 
that right?
    Mr. George. I believe we do have discussions, but they are 
not limited at all.
    Chairman Issa. Right, they make the final decision, 
although they work in consultation with yours and other 
offices.
    Mr. George. Yeah, I don't know if I would use the words 
``work in consultation,'' sir. They make the determinations on 
their own unless----
    Chairman Issa. So, if I understand correctly--and I want to 
make sure I understand this, because Mr. Cummings and I are 
very much in agreement on the need to protect victims and get 
full disclosure to the public as appropriate.
    The Senate, as I understand it, the chairman over there 
shares with the ranking member; is that correct?
    Mr. McCarthy. Yes, the chairman, Chairman Baucus, has 
authorized that we share information with his staff as well as 
Ranking Member Hatch and his staff.
    Chairman Issa. So they've made a decision that includes 
more than a dozen people.
    Mr. McCarthy. That's correct.
    Chairman Issa. And the House has not made a similar 
decision.
    Mr. McCarthy. That's not--I'm not sure about that right 
now.
    Chairman Issa. Or, at least, it's a little more narrow.
    Mr. McCarthy. The letter that we have received from 
Chairman Camp authorizing us to provide 6103 information to him 
included members of the Republican staff. I believe that there 
has been--has been information shared between the majority 
staff and minority staff; however, we do not have currently on 
file an authorization from the chairman allowing us to share 
that information directly.
    Chairman Issa. So if Chairman Camp sent a letter saying 
that Mr. Cummings was included in the group to see 6103, you 
would comply with that, is that correct, under the law?
    Mr. McCarthy. I would have to review that, but I believe 
that's accurate.
    Chairman Issa. Okay. So I just want to make sure that we 
understand that, to the extent that somebody pushes back on 
6103, we have two problem. One is to make sure the scope is 
narrow enough that it only includes 6103, and that's open to 
consideration, including by Chairman Camp. And, secondly, the 
question of who gets the information, which, currently, in open 
session would not be appropriate but even in closed session 
would not be available to us. Is that correct?
    Mr. McCarthy. Yes, that's correct, sir.
    Chairman Issa. And, Mr. George, your need to err on the 
side of caution, just briefly, if you were wrong and you came 
before us and you disclosed 6103, would you be protected by 
what we call ``speech and debate,'' something that protects us?
    Mr. George. No.
    Chairman Issa. What could happen to you if you released 
6103 information, if you erred on the side of, let's say, a 
little more liberal interpretation?
    Mr. George. Anywhere from removal from position to possible 
criminal prosecution, sir.
    Chairman Issa. Thank you.
    I recognize the ranking member.
    Mr. Cummings. Thank you very much.
    Mr. George, I want to begin by sort of picking up where the 
chairman left off. I'm going to ask you about some very 
troubling testimony we heard yesterday about your efforts to 
personally intervene to block this committee from receiving 
documents. And I listened to what you just said, and I just 
want to--I'm taking that into consideration as I ask.
    At a hearing yesterday, the new acting head of the IRS, Mr. 
Werfel, testified that the IRS was about to send us documents 
last week with information related to categories of progressive 
or left-leaning groups that may have received treatment similar 
to the Tea Party applicants. Mr. Werfel said that career 
experts at the IRS determined that it was permissible to share 
this information with our committee because it related to 
categories of groups rather than specifically identifiable 
taxpayers, but Mr. Werfel said you personally intervened and 
objected to the legal determination of these career IRS 
officials who make these determinations for a living.
    I want to read exactly what he said yesterday under oath 
and then get your response. He said, ``We were imminently going 
to produce a document in an unredacted form that would indicate 
the identity of a grouping of entities that we felt were 
similar in a kind of scope as Tea Party in terms of its 
grouping, so that it wouldn't be able--you wouldn't be able to 
identify a particular taxpayer because the grouping name was so 
broad. And he'', meaning you, Mr. George, ``he reached out when 
he learned that we were about to produce this information and 
expressed concern and indicated a disagreement with our 
internal experts on whether this information was 6103-protected 
or not.'' And that's the end of the quote.
    Mr. George, is that true?
    Mr. George. Is----
    Mr. Cummings. Did you personally contact Mr. Werfel's 
office and----
    Mr. George. Yes, I did. Yes, I did. And can I explain why?
    Mr. Cummings. Yes, please.
    Mr. George. I was contacted by counsel on my staff about 
the overall situation that you described and that there was a 
dispute, there was some concern, because the career IRS 
officials that you referred to----
    Mr. Cummings. Yes.
    Mr. George. --you cited Mr. Werfel----
    Mr. Cummings. Yes.
    Mr. George. --had indicated their original position was 
that this was 6103-protected information.
    Mr. Cummings. Okay.
    Mr. George. And then, lo and behold, after all of this has 
broken into the public, they all of a sudden changed their 
legal, you know, decision----
    Mr. Cummings. Okay.
    Mr. George. --position on this, and without providing me, 
personally, with a legal analysis.
    Now, I have had subsequent conversations with my staff, and 
we are still in the process of discussing this. But if I'm 
going to err, sir, it's going to be err--I'm going to err on 
the side of protecting confidential taxpayer information and 
not on some willy-nilly decision by some unnamed career IRS 
employees to release sensitive taxpayer information.
    Mr. Cummings. Well, let me say this: I understand your term 
``willy-nilly,'' but these were not willy-nilly people, as I 
understand it. And--let me finish. I think we need to be very 
careful with those kinds of words. You are career people, just 
like the career people that sat here a few minutes ago. And, 
according to Mr. Werfel, they were experts.
    And let me--and so we asked Mr. Werfel whether this has 
ever happened before, that is, an Inspector General intervening 
personally in a production of documents to Congress based on a 
disagreement with career IRS experts. And Mr. Werfel went back 
to his office and checked and then provided us with this 
response, and let me read it. And keep in mind, according to 
the law, this is still under oath, this written response.
    ``I had my staff check with the current IRS disclosure 
counsel and one retired disclosure counsel. None of the people 
we checked with recalled a situation where the Inspector 
General told the IRS that a planned release of information by 
the IRS would constitute a Section 6103 violation after the IRS 
disclosure counsel determined that particular material was 
releasable to the public or to Congress under Section 6103.''
    So, Mr. George, he is basically saying your intervention is 
unprecedented. That's what he's saying.
    Mr. George. You know, there's a first time for everything, 
sir. And, again, I repeat: I would rather make a mistake on 
protecting the privacy of a taxpayer than making a mistake----
    Mr. Cummings. I understand, but let me finish. Here is my 
concern. First, your report discloses a ``Tea Party'' category. 
Then, several weeks later, we learned there was also a 
``progressive'' category. Then, a week after that, we discover 
there was a category for Occupy groups. And now we understand 
that there are other progressive categories but that you 
intervened to prevent us from seeing them.
    Mr. George, our goal is to have as much information as 
possible so we can draw accurate conclusions about the 
treatment of all of the groups, all of them. As I said a little 
bit earlier in the hearing, we don't just represent 
conservative groups--I have a lot of conservative groups in my 
district, believe it or not, and I will fight for them just as 
hard as I will fight for more liberal, progressive groups.
    Mr. Werfel testified yesterday that the IRS has asserted 
its position that he has been in further discussions with the 
office and that if you--if you withdraw your objection, he will 
send over the documents to our committee.
    And so, you said those discussions are continuing? Is that 
what you said?
    Mr. George. Yes, that is correct.
    Mr. Cummings. And if you all can come to an agreement, you 
will allow us to see those documents?
    Mr. George. Most definitely. We're going to comply with the 
law, sir.
    Mr. Cummings. And how soon do you think that decision might 
be made?
    Mr. George. That, I have no--I don't know, sir. I don't 
know the answer to that.
    Mr. Cummings. I mean, are there planned meetings already or 
what?
    Mr. George. They are ongoing. It's going to be sooner 
rather then later. But I under oath can't give you an exact----
    Mr. Cummings. I understand. And I want you--and, as I 
close--Mr. Chairman, thank you--I just want to--all I'm trying 
to do is, we have--these are documents, of course. We want you 
to stay within the law. I don't want you to get in trouble or 
anything like that. But, you know, I just want to make sure 
that there is some type of decision made and then we know about 
it. Because we want this investigation to go forward, and so 
that is very important for us. And I think the information 
would be helpful.
    Mr. George. Mr. Cummings, if I may--and I beg the 
chairman's indulgence--two things.
    One, this information has been provided to Congress, to the 
committees with the ability to receive 6103 information. So 
we're not withholding anything, one.
    Mr. Cummings. Okay.
    Mr. George. Two, ``progressive,'' we just learned about 
that recently, that that name was being used by the Internal 
Revenue Service.
    So, you know--and, as I indicated in my opening statement, 
we, just as recently as last week, received new information 
that is disturbing and that we need to pursue. So, you know, 
this is not a clean-cut matter, sir. There's a lot going on 
here.
    Mr. Cummings. Yeah. I'm not saying that it's clean-cut. I'm 
just saying that we would just like to know--I mean, you just 
said a number of things just in that 1 minute. But, apparently, 
this is an ongoing process. We are in an ongoing process. And 
you're trying to do your job, and we're trying to do ours.
    And all I'm asking you to do is, as this information 
becomes available, and it's things that do not violate the 
restrictions that you have, for example, 6103 problems, we 
would like to have it. Okay?
    Mr. George. Understood.
    Mr. Cummings. All right. Thank you very much.
    Mr. Mica. [Presiding.] I thank the gentleman.
    And let me ask a few questions, if I may, Mr. George.
    First of all, this all started with different Tea Party 
groups and groups, I guess, some with the name of ``Patriot,'' 
and ``9/12,'' requesting IRS certification as a tax-exempt 
organization. And, as I recall, the motivation was by a number 
of Members of Congress who said, ``What's going on here? We 
have reports from our constituents of this.'' Is that sort of 
the genesis of this?
    Mr. George. That, in addition to media reports about----
    Mr. Mica. Right, about this going on.
    And you testified today you conducted an audit. It wasn't 
an investigation; we know that. And you mentioned today that 
IRS provided you with this list of 298 organizations, ``Tea 
Party,'' ``Patriot,'' ``9/12.'' That's correct. So it's not 
something that you just went after on your own.
    Mr. George. Right.
    Mr. Mica. It appears, too--I don't know, did you hear the 
witness today from Cincinnati? Because we've had a whole bunch 
of folks say this is Cincinnati, Cincinnati. And the committee, 
in trying to act in a responsible manner, is trying to find out 
how this all occurred, who was responsible for what.
    But did you hear today--was it Hofacre? She said that all 
of her cases were Tea Party, or I guess ``Patriot,'' and they 
were referred--or they were--she was looking for guidance from 
Washington and waiting on that. Is that what you found in your 
audit?
    Mr. George. You know, I only heard bits and pieces of her 
testimony, so I'm going to defer to Mr. Kutz.
    Mr. Kutz. The answer is yes.
    Mr. Mica. The answer would be yes.
    Now, the question recently has been how were progressives 
treated. And it's been intimated that you have tried to block, 
oh, certain information or groups that they may have gone after 
or treated.
    Is there any indication that progressives were treated 
differently? Did you--have you investigated--in your part of 
the audit, did you look at progressives? You said a few minutes 
ago, this is a fairly recent----
    Mr. Kutz. We look at the criteria they gave us for the 
BOLOs that had only ``Tea Party'' on it. And that was what Ms. 
Hofacre talked about this morning.
    Mr. Mica. And that was the crux of your----
    Mr. Kutz. On May 17th, 2012, they gave us what was called 
the BOLO iterations list----
    Mr. Mica. Exactly.
    Mr. Kutz. --which is what Mr. George submitted for the 
record in his opening statement. And on that listing were the 
Tea Party criteria, iterations that started in pre-BOLOs, in 
May 2010, and went all the way through when the Cincinnati 
staff changed the criteria back to include policy positions 
after Ms. Lerner----
    Mr. Mica. And he traced that all the way up to Ms. Lerner 
and her staging and coming out on May 10th, 2013. That was your 
testimony. She was the one that actually confirmed the 
conservative targeting. That's what you testified today.
    So what you're seeing is sort of a diversionary tactic to 
try to undermine your audit and your report. From my 
standpoint, they have tried to undermine my chairman. They've 
tried to close down the investigation. They tried to keep us 
from moving forward.
    Now, you aren't through with your investigation, are you?
    Mr. George. That is exactly right, and that is such an 
important----
    Mr. Mica. And audit--I said audit or review, we'll call it.
    Mr. George. And if you don't mind, thank you, sir, because 
that is an important distinction.
    Mr. Mica. Right.
    Mr. George. I mean, I can't discuss, you know, an 
investigation. Suffice it to say, though, that we are working 
with the FBI and the Department of Justice----
    Mr. Mica. And we heard both witnesses today, one from 
Cincinnati who testified and created a direct link to 
Washington, and we heard from Mr. Hull, a 48-year veteran, I 
guess, of IRS. And he continued the link up to both Lois 
Lerner's office and then he had also indicated that one of the 
two political appointees--did you get that far? How far have 
you gotten in tracing it up the line?
    Mr. Kutz. As part of the audit, we did not interview anyone 
from Chief Counsel's Office, but our timeline shows----
    Mr. Mica. Okay.
    Mr. Kutz. --the Chief Counsel's office was consulted at 
some points in the process.
    Mr. Mica. So you can confirm that.
    Mr. Kutz. We can confirm that, and----
    Mr. Mica. Okay. And, again, we are all in an ongoing review 
of how this started, what took place, who was responsible. We 
have--Ms. Lerner has exercised, at least initially, her Fifth 
Amendment right. We may be calling her back. But this is an 
ongoing process.
    Do you think it should be closed down, Mr. George?
    Mr. George. Not at all. And, if I may, the moment I was 
made aware of the fact that other groups were similarly, you 
know, spotlighted----
    Mr. Mica. Yeah.
    Mr. George. --by the IRS, I directed my staff to commence a 
review of that. However, given the work that we're doing with 
the FBI and with the Department of Justice, we have to hold in 
abeyance many of the other things we would otherwise be doing 
to allow for the completion of their work or that work.
    Mr. Mica. And you are dotting your I's and crossing your 
T's----
    Mr. George. Precisely.
    Mr. Mica. --because you are subject to criticism like we 
are.
    Well, thank you. My time has expired.
    And let me see, we have--Mr. Connolly is next. You're 
recognized, sir.
    Mr. Connolly. Thank you, Mr. Chairman.
    Welcome back.
    Mr. George. Thank you.
    Mr. Connolly. Mr. George, we all have political 
backgrounds. I assume, once you were appointed by President 
Bush to your present position, you saw yourself as a 
nonpartisan professional; is that correct?
    Mr. George. Yes. Yes, it is, sir.
    Mr. Connolly. Mr. George, there have been reports with 
respect to the scope of your audit or review, including by the 
spokesperson in your office, that you met with the chairman of 
this committee and, essentially, he helped limit the scope of 
the review.
    Mr. George. That's incorrect, sir.
    Mr. Connolly. That is incorrect?
    Mr. George. The report I did see, but that did not occur.
    Mr. Connolly. So Karen Kraushaar, your spokesperson who 
quoted--who said, and I quote, that Darrell Issa had 
specifically requested that investigators, ``narrowly focus on 
Tea Party organizations,'' so they did just that, according to 
Kraushaar, that is an inaccurate statement?
    Mr. George. That is correct.
    Mr. Connolly. On what basis would she make such a statement 
on your behalf to the press?
    Mr. George. Well, it was not without my authorization, and 
she misspoke, sir.
    Mr. Connolly. She misspoke. Did you, in fact, have meetings 
with the chairman of this committee about the nature of this 
audit?
    Mr. George. I had one meeting with the chairman. And, if 
anything, I was berated because he thought I failed to provide 
information to him that he thought he was entitled to.
    I'm sorry, what?
    Oh, and this was actually, sir--and it was just pointed out 
to me that this was after the audit was issued. So there was no 
meeting prior to that at all.
    Mr. Connolly. All right. And so, other statements, either 
attributed to you or others in your operation, that, for 
example, looking at those 202--if you remember, you and I had a 
conversation about the pie chart. Two hundred and two of 298 
organizations were not identified. And do you remember your 
answer under oath to me when I asked you, could that 202 
include progressive organizations?
    Mr. George. And I recall the discussion. I don't recall 
verbatim what I said.
    Mr. Connolly. Let me read to you what you said: ``We were 
unable to make that determination, sir, because in many 
instances the names were neutral, in that you couldn't 
necessarily attribute it to one particular affiliation or 
another.''
    And yet, that's not exactly what you said to me in July in 
your letter to me on this very same subject. You said, ``It 
would be inappropriate for a nonpartisan inspector general with 
responsibility for the tax administration and law enforcement 
to apply political labels to organizations based solely on the 
name of the organization and subjective assumptions about what 
those names mean.''
    Mr. George. I don't----
    Mr. Connolly. That seems to be at variance with what you 
said to me in May.
    Mr. George. I beg your--I beg to differ, sir. I don't see 
an inconsistency in that at all.
    I believe that, one, the statement that I made about the 
inappropriateness of a nonpartisan inspector general to 
determine--``progress,'' I have no idea what that stands for, 
sir. Teddy Roosevelt ran for President under the Progressive 
Party banner. Would you consider him a Democrat or a 
Republican?
    Mr. Connolly. Today, I most certainly would, Mr. George. 
He'd be primaried in his own party for being too squishy and 
liberal, but that's a different matter.
    Mr. George. Well----
    Mr. Connolly. Well, so I want to make sure--you're under 
oath, again--it is your testimony today, as it was in May, but 
let's limit it to today, that at the time you testified here in 
May you had absolutely no knowledge of the fact that in any 
screening, BOLOs or otherwise, the words ``Progressive,'' 
``Democrat,'' ``MoveOn,'' never came up. You were only looking 
at ``Tea Party'' and conservative-related labels. You were 
unaware of any flag that could be seen as a progressive--the 
progressive side of things.
    Mr. George. I was unaware of the names on the--the 298 
names except for ``Tea Party,'' ``9/12,'' and ``Patriots.''
    Mr. Connolly. No knowledge at that time?
    Mr. George. I was aware of those groups being on that list.
    It subsequently was made aware to me of groups that might 
have ``progress'' in it, that groups might have some other 
names. And I have to be careful, sir, because if I give some of 
the names here, I'm in violation of 6103.
    Mr. Connolly. Uh-huh.
    Mr. George. So please don't----
    Mr. Connolly. But you did give names about the Tea Party.
    Mr. George. But that, you know, that's a grouping. That's a 
grouping. That's a----
    Mr. Connolly. Oh, I see.
    Mr. George. --you know, a categorization----
    Mr. Connolly. I see.
    Mr. George. --a category.
    Mr. Connolly. So one is not a violation, one is.
    So let me ask you, at the same time, when you were at this 
table in May, you had already--and you knew you had--asked for 
an investigation of a total of, or an examination of, 5,500 
emails on this subject matter. Is that correct?
    Mr. George. Well, I'm so glad you've raised that issue, 
sir, because it's very important that this matter be clarified.
    I was told that there was a smoking gun, that there was an 
email that the Internal Revenue Service provided to us that 
indicated that someone directed the targeting of Tea Party 
groups and that such an email existed. The auditors and the 
investigators are two different parts of TIGTA. Five thousand 
emails--I don't recall the timing of it, and I might defer to 
Mr. Kutz to give a little more flavor to this. But the auditors 
did not have the wherewithal to go through all 5,000, whatever 
the number was, emails.
    And when that was brought to my attention, because of the 
due diligence that I think is necessary whenever you conduct 
any audit, I instructed my Deputy Inspector General for 
Investigations to use the facilities that he has, the 
capabilities that he has to go and to review that.
    Do you want to elaborate?
    Mr. Kutz. Well----
    Mr. Mica. If you would like to respond to that.
    Mr. Kutz. Yeah, if I could just elaborate, Congressman, I 
would just say that there was--IRS had said at one point there 
was a May 2010 email out there that elaborated on the BOLO 
criteria that was being used. That was a pre-BOLO, before the 
actual BOLO list was developed in August.
    And then we were trying to determine, also, who actually 
authorized and developed the criteria that were inappropriate 
that were being used. And so that was what was in the referral 
to OI, the Office of Investigations, to look for.
    Mr. Mica. Thank you, Mr. Connolly.
    Mr. Jordan?
    Mr. Jordan. Thank you, Mr. Chairman.
    Mr. George, the information that Mr. Cummings and Mr. 
Connolly were talking about, that 6103, and your experts--I 
think you said earlier Mr. McCarthy is the one who said you 
shouldn't release the names of those entities; is that 
accurate? He's your chief counsel.
    Mr. George. You know, this is attorney-client, too, so, you 
know----
    Mr. McCarthy. If I could expand on the----
    Mr. Jordan. Let me just ask this question.
    Mr. McCarthy. Yes.
    Mr. Jordan. Just tell us--I just want to know the number. 
What's the--we don't need to know the names. How many--how many 
entities are we talking about that Mr. Cummings wants you to 
make public and that you think there are 6103 concerns? What's 
the number?
    Mr. McCarthy. Well, the first, there was one that was 
raised to us by the IRS counsel that they had changed their 
position on that we asked for more information on. And then 
others----
    Mr. Jordan. Right.
    Mr. McCarthy. There's a second one that they believe would 
be treated similarly if their new----
    Mr. Jordan. The two entities----
    Mr. McCarthy. --were to be adopted.
    Mr. Jordan. Two entities? Not two terms, two entities?
    Mr. McCarthy. Two terms, at this point. I don't know how 
many entities it would cover.
    Mr. Jordan. Do you have an idea?
    Mr. McCarthy. No, I do not.
    Mr. Jordan. Let me ask you--I'm looking at your testimony, 
Mr. George. You said, ``New documents from July 2010 listing 
the term 'progressive' were provided to TIGTA last week on July 
9th, 2013.'' You're disturbed that these weren't provided 
earlier. I get that. ``We are currently reviewing the issue.''
    What can you tell us? Without violating 6103, what can you 
tell us?
    Mr. George. Great question, sir.
    I don't know whether they were withheld intentionally. I 
don't know--I don't know the circumstances. Again, I may defer 
to Mr. Kutz, if he has additional information on that. But I 
don't know because I just learned about this.
    Mr. Kutz. We don't know. But, Congressman, throughout the 
entire audit, starting May 17, and the document Mr. George 
submitted for the record, we were given a listing of the BOLOs 
that were----
    Mr. Jordan. No, I get what you're going to say now because 
you said it once. Because I had this underlined, too: From the 
date of the May 17th, 2012, document until we issued our report 
1 year later, the IRS staff had multiple levels--at multiple 
levels concurred with our analysis.
    So they had all kinds of opportunity to tell you this was 
there. They didn't tell you. Suddenly it appears, because the 
Democrats keep talking about it, it appears out of nowhere. 
You're currently reviewing it. I mean, is there anything else 
you can tell us about the current review?
    Mr. George. It tells me I'm concerned that there may be 
additional pieces of information that we don't have. I am very 
concerned about that, sir.
    Mr. Jordan. But you--can we put this slide up?
    I just want to walk through the numbers, because--and, you 
know, this is largely developed from your report and interviews 
and emails that our staff has looked at.
    But when you walk through this, you know, we start in 
February 2010. You got one Tea Party case, you got nothing 
anywhere on the ``progressive'' name, ``Occupy'' name, whatever 
term is being used. You move down to March, you got 10 to zero. 
You move down, the score is 18 to zero. Then it's somewhere 
between 40 and 60 to zero. Then it's 100 to zero. It's unclear, 
around 100. And then, finally, we get to the end, and it's 96 
to 7 is the score. And yet, none of those seven groups, to my 
knowledge, were ever denied the status they sought. And if I do 
my math right, there's 195 cases you don't, frankly, know about 
that are part of that overall universe of 298.
    So when you walk--in fact, USA Today reported 12 
applications from liberal and progressive groups got some kind 
of scrutiny. They were all approved. None of the Tea Party/
conservative groups were. There was obviously disparate 
treatment here.
    And I think that this idea that Mr. Connolly keeps raising, 
I just--the evidence doesn't point to that at all.
    Mr. Kutz. Again, the document we submitted for the record--
I don't want to repeat it because you already have seen it--it 
showed what the BOLOs were relevant to this.
    The other tabs of BOLOs were touch-and-go and other things 
like that, related in some cases to fraud, abuse, terrorist 
activity----
    Mr. Jordan. Everything you guys have looked at--the 
heightened scrutiny, the delays, the fact that these groups 
were never approved, the fact that when they hung out there in 
this limbo status they were denied their opportunity to appeal 
any decision because there was no decision rendered--everything 
you have looked at, that happened with ``Tea Party,'' ``9/12,'' 
``Patriot,'' conservative groups, correct?
    Mr. Kutz. The criteria in our report is what we understand 
to be accurate----
    Mr. Jordan. All right.
    Mr. Kutz. --that was used.
    Mr. Jordan. All right. I understand.
    Mr. Chairman, I'd yield back.
    Mr. Connolly. Mr. Chairman?
    Mr. Mica. Mr. Walberg?
    Mr. Connolly. Well, Mr. Chairman, could I just have a 
unanimous consent?
    Mr. Mica. Oh, no problem.
    Mr. Connolly. Thank you so much.
    Just before we were finished, I was going to ask unanimous 
consent to enter into the record the communication from the 
head of investigations to the Principal Deputy IG on the 
subject we were talking about, in the review of the 5,500 
emails.
    Mr. Mica. Without objection----
    Mr. Connolly. I thank the chair.
    Mr. Mica. --so ordered.
    Mr. Mica. And now we'll go to Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman.
    And thanks to the panel for being here again.
    According to Mr. Hull, who we had the privilege of 
listening to this morning with his direct testimony, during a 
meeting in July of 2011, Ms. Lerner instructed her subordinates 
to--that the Tea Party applications should henceforth be 
referred to as ``advocacy'' applications. Is that right?
    Mr. Kutz. What Ms. Lerner did, as I understand, is she 
changed the criteria in the BOLO to no longer include ``Tea 
Party'' names in the BOLO, if that's what you're referring to. 
July 2011 is when the criteria was changed from ``Tea Party'' 
to what you have----
    Mr. Walberg. ``Advocacy.''
    Mr. Kutz. That's correct. That's my understanding. And 
that's what's in the document Mr. George submitted for the 
record.
    Mr. Walberg. But just to be clear, according to Mr. Hull, 
the two test cases he was working in Washington on were both 
filed by groups affiliated with the Tea Party movement, right?
    Mr. Kutz. Only one, sir.
    Mr. Walberg. Only one.
    Mr. Kutz. Correct.
    Mr. Walberg. Do you think it was pretextual for Ms. Lerner 
to label these applications as advocacy cases when they were 
really Tea Party cases?
    Mr. Kutz. Well, she was trying to fix the problem. She 
actually, I think, recognized then that these criteria were 
inappropriate, to use any names, regardless of political party.
    Mr. Walberg. Okay.
    Mr. Kutz. And she was trying to fix it. It wasn't perfect 
criteria, but it was better than using the names ``Tea Party,'' 
``9/12,'' and ``Patriots.''
    Mr. Walberg. Okay, so ``Tea Party'' didn't work, so 
``advocacy'' would, at that point.
    Mr. Kutz. Political advocacy, sir. That's how it was----
    Mr. Walberg. Political advocacy.
    Mr. Kutz. --referred to, yes.
    Mr. Walberg. Mr. Hull has testified that the Tea Party test 
cases pending in Washington were transferred from him in August 
of 2011 with no explanation and assigned to Hillary Goehausen. 
Is that reflective of your findings, as well?
    Mr. Kutz. Yes, sir.
    Mr. Walberg. With no explanation, just a transfer.
    It's interesting that Mr. Hull, as we listened to this 
morning and know of his record, his tenure and service, 
extensive service, 48 years, in fact, do you have any sense of 
whether Ms. Goehausen has anywhere near the practical 
experience of Mr. Hull?
    Mr. Kutz. We don't have anything on that, sir.
    Mr. Walberg. She had 4 months before being put in this job.
    Ms. Goehausen told committee staff in an interview that, 
prior to July 2011, she had no experience with 501(c)(3) and 
501(c)(4) groups applying for tax-exempt status. Do any of you 
find that to be odd, that the IRS would transfer these test 
party--or these Tea Party, these advocacy cases from someone 
with decades of experience to someone with little or no 
experience?
    Mr. Kutz. We don't know. I mean, in the time that we have, 
the issue you're talking about contributed to the delays that 
we describe in our report. But we have no knowledge of what 
have described there.
    Mr. George. But I would just add, Congressman, given the 
fiscal constraints facing the entire Nation but especially 
those confronting the Internal Revenue Service, I am not 
surprised that they would have made a decision like that. And 
they are unfortunately going to have to continue to make some 
of these, you know, haphazard types of decisions because of a 
lack of resources and manpower.
    Mr. Walberg. We can only hope it was resources and 
manpower.
    Mr. George, in a letter sent to Chairman Issa on Friday, 
Ranking Member Cummings asserts that you found no evidence of 
political bias. And I apologize for not being here for your 
opening comments due to the fact of being on the floor.
    But in the course of your audit, you said that you hid this 
fact from the general public, about the political bias. I 
recall reading the audit and finding you stating exactly that, 
that you did not find any evidence implying political bias.
    It seems Mr. Cummings and his staff did not thoroughly read 
your report or pay attention when you testified to this effect 
previously. How do you respond to Mr. Cummings' criticism that 
you hid this fact from the public?
    Mr. George. Yes, Congressman, thank you for helping me once 
again to clarify both in the opening statement that I issued 
today, both in terms of the audit report that we issued and in 
previous testimonies before a variety of a number of committees 
both in the House and Senate, I made it patently clear that we 
had not found such motivation, political motivation.
    But, again, this was under an audit, not under any other 
review that we're undertaking.
    Mr. Walberg. Mr. Chairman, I yield back.
    Mr. Jordan. [Presiding.] I yield to the gentleman from 
Tennessee, Dr. DesJarlais.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    And, Mr. George, I do appreciate you being here and your 
colleagues.
    You've been doing this for about a decade. Have you ever 
been involved in a case quite like this?
    Mr. George. This is the most unprecedented example I have 
ever experienced, not only as an inspector general but as a 
former member of this very committee's staff for almost 25 
years and being a former White House staffer. I have not--I 
have never experienced anything like this, sir.
    Mr. DesJarlais. What type of things have made it more 
challenging than usual?
    Mr. George. The fact that people are trying to misinterpret 
the findings of career employees who, over the course of the 
existence of our organization, have uncovered billions and 
billions of dollars that the IRS has misspent or could be spent 
in more efficient and effective ways, and then a variety of 
policy changes that the IRS has agreed to in terms of making 
changes to better serve the American people.
    And to have our reputation, again, of career people--I am, 
you know, a political appointee; I expect this heat. I mean, 
even though I don't think I deserve it in this instance, I 
expect it. My career people neither deserve it nor should they 
have to expect it. And that is troubling, sir.
    Mr. DesJarlais. Well, certainly, we could sense the 
frustration from our earlier witnesses, Ms. Hofacre and Mr. 
Hull, that--you know, it was apparent that they were willing to 
come here, openly testify. They didn't have anything to hide. 
They were doing their jobs. But yet somebody higher up the food 
chain chose, as Ms. Hofacre said, to invoke a nuclear strike, 
and they felt essentially thrown under the bus.
    Do you have any sense as to why somebody would either want 
to cover something up or blame somebody that clearly we've 
proven, I think, through testimony were not responsible?
    Mr. George. You know, I don't have facts that I--to provide 
to justify that, sir. But it's just troubling that it's 
happening.
    Mr. DesJarlais. Well, you know, I guess I hate to say we're 
almost getting used to that here, but after our hearing on 
Benghazi and listening to reports come out about how this pesky 
YouTube video was responsible for the death of the Americans, 
and that story was propagated for 3 weeks, and then we hear Mr. 
Carney and other folks higher up in the IRS blaming it on these 
two rogue agents in Cincinnati, you might think that they want 
to change their storyteller, because, you know, we've proven 
both of those are not the case. You know, I think the American 
people are getting very frustrated, and I know that they are 
extremely anxious to hear what we find and where this goes.
    What would--what would make your job easier? What continues 
to make this so difficult, besides being personally attacked by 
members of this committee?
    Mr. George. And, again, I have to preface my response by 
saying tax policy decisions that the Department annunciates is 
within the scope of the Assistant Secretary for Tax Policy. And 
it has been that way since the Nixon administration.
    But it is extremely--and I indicated this earlier in a 
response to a question--when a provision of law prevents me 
from telling you and others information that I have that I know 
would help clarify the matter but under, you know, the 
potential of violating Federal law I'm unable to do so. So I'll 
have to leave it at that.
    Mr. DesJarlais. Okay.
    Elizabeth Hofacre testified that she could not process Tea 
Party applications pending in Cincinnati because she was 
waiting on guidance from Carter Hull in Washington. Mr. Hull 
testified that he could not provide Ms. Hofacre with guidance 
because he was waiting for direction from senior IRS 
leadership, including Chief Counsel's Office.
    Is that consistent with the findings of your audit?
    Mr. Kutz. Yes, sir.
    Mr. DesJarlais. And I'm assuming that Chief Counsel will be 
questioned more thoroughly in the future?
    Mr. Kutz. We did not interview Chief Counsel as part of the 
audit, I will say. They were in our timeline as being consulted 
and one of the reasons perhaps for the delays. But we did not 
interview anyone from Chief Counsel's Office for the audit.
    Mr. DesJarlais. Okay. Are there plans to interview people 
from Chief Counsel?
    Mr. George. Again, as I indicated earlier, sir, we're 
working both with the Department of Justice as well as the 
FBI--there's a component of that--on a continuing review of 
this matter. And I'm not at liberty to go into----
    Mr. DesJarlais. Okay. Well, you know, people seem to feign 
outrage that the Republicans are just on this witch hunt trying 
to implicate the White House. The fact is, there was an 
election year, there were groups that had different political 
views than this President, and there was a political appointee 
who has been implicated in these cases that have been sent up 
the food chain.
    So, you know, I think it's only fair that we continue to 
look and dig, because, you know, this happened about 40 years 
ago in our history, not this exact same thing. But I don't 
think it's outrageous, considering the fact that people are 
trying to put out misleading stories if there's nothing more to 
see. And there wouldn't be agents, or there wouldn't be 
employees claiming the Fifth or asking for the Fifth when they 
come to testify.
    So, anyways, thank you for your work. I'm out of time, and 
I'm sure there's more to come.
    Mr. George. Thank you, sir.
    Mr. Jordan. The gentleman from Pennsylvania is recognized.
    Mr. Cartwright. Thank you, Mr. Chairman.
    You know, when Mr. George was here last in front of this 
committee, I said, it's an outrage if this is true. And I want 
to say I took a lot of heat from folks back home, because I was 
implying that perhaps what you said in your report wasn't the 
complete story. And I just want to go back to that, because I'd 
hate to imply something that isn't true.
    Mr. George, in the committee hearing on May 22, 2013, the 
chairman asked you some clarifying questions to my line of 
questioning. I'd like to ask you some clarifying questions 
about those clarifying questions.
    To refresh your memory, here's what you--what you said. 
Chairman Issa said, ``Were there any BOLOs issued for 
progressive groups, liberal groups?''
    ``Mr. George: The only 'Be on the Lookout,' that is BOLO, 
used to refer cases for political review were the ones that we 
described within our report. There were other BOLOs used for 
other purposes. For example, there were lookouts for indicators 
of known fraud schemes so that they could be referred to the 
group that handles those issues. There were nationwide 
organizations. There were notes to refer State and local 
chapters to the same reviewers. As we continue our review of 
this matter, we have recently identified some other BOLOs that 
raised concerns about political factors. I can't get into more 
detail at this time as to the information that there is because 
it's still incomplete--that we've uncovered, rather, because 
it's still incomplete.''
    Chairman Issa said, ``So, clearly, it's fair to say, 
though, there was a BOLO for 'Tea Party' but not a BOLO for 
'MoveOn' or 'progressive.'"
    Mr. George, you said, ``I'm not in a position to give you a 
definitive response on that question at this time.''
    Chairman Issa said, ``I only ask if there's at least one. 
Are you aware of at least one that was targeted using a BOLO 
that was a 501(c)(4), in which they were targeted politically 
but did not fall into this current report we have before us?''
    Mr. George, you said, ``Under the report, the review, the 
purposes of the audit that we conducted, which was to determine 
whether they were looked at for--in the context of political 
campaign intervention, there were no others.''
    And the chairman said, ``Thank you.''
    So, to be clear, Mr. George, first you said the only BOLOs 
used to refer cases for political review were the ones 
described within the report. Then you immediately say there 
were other BOLOs used to refer cases for political review that 
were outside your report. Then, after Chairman Issa pressed 
you--and I want to thank Chairman Issa for pressing you so hard 
on this issue--by asking if there was even one group that was 
flagged with a BOLO for political reasons that wasn't included 
in the report, and you said there were no others.
    Have I read that correctly?
    Mr. George. You've read it correctly, but, I mean----
    Mr. Cartwright. I just want to give you the benefit of the 
doubt here and allow you to explain yourself, Mr. George. Was 
it true when you said that the only BOLOs used to refer cases 
for political review were the ones described within the report?
    Mr. George. That is correct, sir.
    Mr. Kutz. Congressman, that's in the document that he 
submitted for the record. Those were the BOLOs we were given by 
the IRS, May 17, 2012, that show for political advocacy cases 
what the BOLOs were.
    Mr. George. Sir, you were not here during the part of my 
testimony which indicated that, as recently as last week, the 
Internal Revenue Service is still providing us information that 
would've had a direct bearing on this testimony and on our 
audit report.
    Mr. Cartwright. Let's go at it this way, Mr. George. As of 
today, are you aware that there were BOLOs out about 
progressive or liberal groups?
    Mr. George. There were BOLOs----
    Mr. Cartwright. And when did you first find out?
    Mr. Kutz. On which ones?
    Mr. Cartwright. I'm asking Mr. George.
    When did you first find out there were BOLOs about liberal 
or progressive groups?
    Mr. George. It was the night before I was testifying before 
the Senate Finance Committee, at around 6:30 p.m.
    Mr. Cartwright. And was that before your testimony here on 
May 22nd?
    Mr. George. That was before, yes.
    Mr. Cartwright. So you were here on May 22nd testifying 
about BOLOs about Tea Party groups, and when Mr. Issa 
questioned you specifically about other groups, you said there 
were no others.
    Mr. George. Well----
    Mr. Cartwright. But you didn't say a word about BOLOs that 
you knew were about progressive or liberal organizations, even 
though you just admitted today----
    Mr. George. Yeah.
    Mr. Cartwright. --that you were aware of that as of your 
May 22nd----
    Mr. George. Sir----
    Mr. Cartwright. --testimony. Am I correct on that, Mr. 
George?
    Mr. George. --I need to clarify something. One, it was on--
the BOLO group name was on ``Occupy.'' And I can use that word 
because it's generic. We had no information whatsoever how, if 
at all, that information was used or misused.
    Mr. Cartwright. It doesn't matter. You knew there were 
BOLOs about ``Occupy''----
    Mr. George. But we----
    Mr. Cartwright. --and you didn't say a word about it in 
your last testimony here in this committee, May 22nd.
    Mr. George. Yeah.
    Mr. Cartwright. You knew people's heads would explode if 
you talk about Tea Party BOLOs, and you didn't mention any 
other ones.
    Mr. George. Sir----
    Mr. Cartwright. What do you think we are doing here?
    Mr. George. Sir, if you look at page 6, footnote 16 of my 
audit report, it acknowledges the existence of other BOLOs and 
the fact that we did not--the charge of that audit was not on 
how they were utilized.
    Mr. Cartwright. You knew there were BOLOs about liberal 
groups----
    Mr. Jordan. The gentleman's time has expired.
    Mr. Cartwright. I'll yield back, Mr. Chairman.
    Mr. Jordan. You can only yield back when you've got time to 
yield back, but we thank the gentleman.
    We'll go now to the gentleman from South Carolina.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Mr. George, how long have you been the Inspector General?
    Mr. George. I was confirmed in November of 2004 for this 
current position.
    Mr. Gowdy. And how do you view your job, your role?
    Mr. George. I consider it one of the most important 
Inspector General responsibilities in the Federal Government, 
given the role that the IRS plays in the lives of every single 
American and anyone else who has a tax obligation to the United 
States of America.
    Mr. Gowdy. Well, I've always thought of inspector generals 
as really having no friends to reward and no foes to punish; 
they just go where the facts take them.
    Mr. George. And that is exactly how I've comported myself, 
sir.
    Mr. Gowdy. You know, Mr. George, when I see quotes like 
this one from one of our colleagues on the other side of the 
aisle--or, rather than discuss the facts of your investigation 
or your background or your reputation for integrity, they just 
want to say this: ``This is a Republican-appointed inspector 
general. This is someone who has donated and worked for 
prominent Republicans. Are we as Democrats and the public to 
believe he is objective and simply followed the truth where it 
leads?''
    And I think to of your colleagues, a man by the name of 
Michael Horowitz. He's the Inspector General for the Department 
of Justice. And, you know, he had a connection to Lanny Breuer, 
and he was appointed by this administration. But I decided to 
do something novel, and I would encourage my colleagues on the 
other side of the aisle to do it, too: Allow the person to do 
their job before you judge them based on connections. So I let 
Mr. Horowitz do his job, and guess what? He was fantastic, 
straight down the middle, calling balls and strikes. Couldn't 
tell he had any political connection.
    So what's your reaction when you have questions like the 
ones you just had from our colleague on the other side of the 
aisle and when your integrity is attacked like it was by my 
colleague responsible for this quote? What's your reaction?
    Mr. George. You know, and I'm not being flip here, but they 
don't know that I was page at the 1980 Democrat National 
Convention. They don't know that I was a founder of the Howard 
University College Democrats. Yes, you know, I saw the light 
and joined Bob Dole's staff during college, but I have--I think 
anyone who has worked with me on either side of the political 
spectrum will agree that I call it as I see it. I have never 
allowed political--you know, personal political views to affect 
decisions. We worked with Democrats, we worked with Republicans 
to get legislation passed. And we--and I continue to do so.
    And so, you know, I mean, again, sir, I've been in 
Washington now for, you know, over 2 decades, and I know how, 
you know, sometimes politics is played and works. It's 
unfortunate, because, you know, when I was doing my due 
diligence, sir, by talking to some of the first IGs, you know, 
who were appointed by Jimmy Carter and then later fired by 
Ronald Reagan and then some rehired by him, they said to me, do 
not take this job. They say, if you are perceived to be too 
aggressive, the administration is angry at you. If you're 
perceived to be not aggressive enough, Congress is angry at 
you.
    And while I love this job and I just have the greatest 
staff that work with me, you know, I'm willing to make--to do 
it. And I've made sacrifices personally and in many other ways, 
but I'm serving the people of the greatest Nation on Earth, and 
I have no regrets.
    Mr. Gowdy. Well, Mr. George, I've got to be honest with 
you, you're a lot more magnanimous than I am, because I think 
it's disgraceful. I think when you attack people just because 
you have a political opportunity and you go through their 
background and find some tangential connection to a Republican 
or a Democrat and then want to disparage their work because of 
that--if somebody has a problem with your audit--and I hasten 
to add, this was not an investigation, it was an audit. And 
your work is ongoing.
    You know, you got Republican and Democrat sheriffs, you got 
Republican and Democrat prosecutors, you can't tell the 
difference. I can't tell the difference in inspector generals, 
which is why I never thought to ask. Just tell me what the 
facts are.
    And you don't prosecute cases, do you? You don't convene a 
grand jury.
    Mr. George. That is correct.
    Mr. Gowdy. You refer them to the Department of Justice.
    Mr. George. That is correct, sir.
    Mr. Gowdy. And I will remind my colleagues on the other 
side of the aisle, one of his referrals to the Department of 
Justice for the willful disclosure of confidential information 
was declined by the Department of Justice.
    So, Mr. George, I appreciate your work. Keep going, keep at 
it, and don't let the detractors get you down.
    I yield back, Mr. Chairman.
    Mr. George. Thank you.
    Mr. Jordan. Mr. McCarthy, real quick. You were--in your 
former job, you were deputy staff director at this committee; 
is that correct?
    Mr. McCarthy. That's correct, sir.
    Mr. Jordan. And you served under a Democratic chairman, Mr. 
Towns; is that correct?
    Mr. McCarthy. That's correct, yes.
    Mr. Jordan. And in your 3 years working, or approximately 3 
years for working for Mr. George at TIGTA, have you ever seen 
him function in a political manner being biased one way or the 
other?
    Mr. McCarthy. I haven't been at TIGTA for 3 years. I've 
been there for about 18 months.
    Mr. Jordan. In your 18 months that you've been there--
excuse me--have you ever seen that?
    Mr. McCarthy. No, I--it's not a political organization.
    Mr. Jordan. The way he described his behavior in the last 
12 years, you would attest to that in what you've seen in the 
last 18 months?
    Mr. McCarthy. I haven't seen any political behavior.
    Mr. Jordan. I appreciate that, Mr. McCarthy.
    I now yield to the gentlelady from the District of 
Columbia, Ms. Holmes Norton.
    Ms. Norton. Mr. George, I asked staff to get out what was 
the charge for the audit. And the charge, and here I'm quoting, 
was that you were to look for inconsistent treatment of 
applications. That's the word I want to focus on, 
``inconsistent treatment of applications.''
    You have testified earlier today that you did not know of 
the--of the handling of progressive groups. You didn't know, 
for example, that some of them had had a 2- or 3-year wait.
    Mr. George--Mr. George, my question really goes to the 
methodology that you were using. You have used words previously 
like ``targeted.'' It seems to me that one has to look at the 
entire universe in order to know whether any specific groups 
have been targeted or kicked out.
    Even though you were not told about progressive groups, if 
your charge was to look for inconsistent treatment of 
applications, doesn't that necessarily drive you to look at 
applications from progressive groups to the extent possible and 
applications from conservative groups to the extent possible? 
That's my question.
    Mr. George. Okay. And I'm going to defer to Mr. Kutz.
    Mr. Kutz. We probably could. We weren't labeling anybody. I 
mean, that's what Mr. George said in his opening statement----
    Ms. Norton. That's not my question, about whether you were 
labeling. Here is my question. My question goes to methodology.
    Mr. George. Uh-huh.
    Ms. Norton. You were focused on the Tea Party--the way in 
which Tea Party groups were treated.
    Mr. George. All groups in the 298. All groups in that 298 
that----
    Mr. Kutz. All groups in the political advocacy----
    Ms. Norton. Well, if you were focused on all groups, how 
could you not have--how could you not have, in the ordinary 
course of doing your work, discover the treatment of the 
progressive groups? And why would you not have reported the 
treatment of both groups to this--to this committee?
    I mean, you have testified that you didn't know of the 
treatment of some of the progressive groups. And that says to 
me--that goes to a flaw in methodology. If all of the groups 
are on the table, one concludes targeting only after comparing 
the groups. And I don't see evidence of that kind of rigorous 
comparison, Mr. George, in your work.
    Mr. George. Ms. Norton, if I may, first of all, again, we 
did not go line by line to say, this is a progressive group, 
this is a, you know, conservative group, this is----
    Ms. Norton. Well, then, how could you find that there was 
targeting of Tea Party groups?
    Mr. George. Because of the----
    Ms. Norton. Because that would have to be compared to 
something else.
    Mr. George. It was because----
    Ms. Norton. Because you can't possibly target everybody or 
else you wouldn't use the word ``target.'' If you are 
targeting, it means you're picking them out from the universe 
of groups, or else you were wrong to use the word ``target'' at 
all.
    Mr. George. But, ma'am, it was because they used ``Tea 
Party.'' The groups that were highlighted/targeted had the name 
``Tea Party'' or ``9/12'' or----
    Ms. Norton. Yeah, well, the BOLO listing for Occupy groups, 
unless--if you were born even yesterday, would mean that you'd 
have to look at Occupy groups, but you don't mention Occupy 
groups in your report.
    Mr. George. But they weren't in the same category, 
Congresswoman. They were in a, what was called historical tag. 
They were not--I'm sorry, what?
    I'm sorry, they were on a watch list. They were not on the 
political advocacy group tab that we were provided and that we 
were charged with looking at in this audit.
    Ms. Norton. You were charged with looking at what? 
Inconsistencies among groups.
    Mr. George. We were charged with looking at whether or not 
the Internal Revenue Service was applying Treasury regulations, 
as well as, you know, the Tax Code, as it applied to 501(c)(4) 
applicants in this particular realm, which the Internal Revenue 
Service itself provided us. Not, there----
    Ms. Norton. I don't know what the Internal Revenue Service 
provided you. All I know is your charge was to look at 
inconsistent treatment of applications.
    If I may say so, Mr. George, I don't believe you are 
dishonest and I don't believe that you are political. I do 
believe that your testimony shows, demonstrates that you were 
not using the appropriate methodology in order to meet your 
charge, which was to find whether there was inconsistent 
treatment. You would have had to put the universe before you to 
responsibly make that--answer that question.
    Mr. Kutz. May I comment just because, you know----
    Mr. Jordan. The lady's time has expired. The gentleman may 
respond.
    Mr. Kutz. Okay. We looked at over 600 cases, and only 72 of 
them were Tea Party cases. We sampled from a bucket of cases 
that was outside of this 298 cases, and we found that 175 
statistically should have actually been included in the 
political review.
    We didn't look at them and label them as any sort of 
political thing. We said, based on the substance in the case, 
if there was evidence in the files, as Mr. George said, and 
Treasury regulations in that should've been actually looked at 
as political cases. In the same light, of the 298, we found 
that 31 percent of them had no evidence in the file of 
political campaign intervention and perhaps should not have 
been looked at.
    So we only looked at 72 Tea Party; we looked at over 600 
cases total. So, you know, we did look at it a little bit 
broadly, sure, but the lane we looked at was the lane called 
political advocacy. Keep in mind, they process tens of 
thousands of cases a year. There were only 300 in this group--
--
    Ms. Norton. Political advocacy, where the statute says 51 
percent. You know, obviously, you narrowed--you narrowed your 
focus.
    Mr. Kutz. That's correct. We narrowed it to political 
advocacy cases.
    Chairman Issa. [Presiding.] I thank the gentlelady.
    We now go to the gentleman, Mr. Meadows.
    Mr. Meadows. Thank you all for being back with us.
    And, as you know from some of our previous inquiries, I'm 
one that will call it as I see it. And so I am not necessarily 
giving you a free pass, but I want to just apologize. You know, 
you guys are the messengers, and you're getting beat up in the 
middle of this when we're throwing out red herrings.
    You know, we're talking about BOLO list, and we're--these 
are red herrings. And I'd like you to comment on this. Even 
though there may have been two different BOLO lists, we do know 
that the ``Tea Party''s were singled out because 100 percent of 
those were either detained for a long period of time or 
systemically detained in terms of any kind of result, for some 
as much as 3 years or more. Is that not correct?
    Mr. Kutz. There were actually five different BOLO tabs. 
There was the potential abusive historical, potential abusive 
coordinated processing watch list, or what was called emerging 
issues----
    Mr. Meadows. Right.
    Mr. Kutz. That's where the Tea Party was, emerging issues. 
These other four BOLO lists out there, we said very clearly in 
our report on page 6 that we did not look at them. That doesn't 
mean there's not something wrong, perhaps, with what they were 
doing----
    Mr. Meadows. But they weren't treated in the same way as 
these on this BOLO list; is that correct? Let that message be 
clear today.
    Mr. Kutz. We don't know if they got delays and letters. We 
know that the people--a large group of those people got 
significant delays, on average almost 600 days.
    Mr. Meadows. And 100 percent of the Tea Party cases got a 
delay?
    Mr. Kutz. I don't know if a hundred. No. Some were actually 
approved. Some Tea Parties were approved at some point.
    Mr. Meadows. Three? I think you--how many were approved?
    Mr. Kutz. We'll have to get that into the record, sir.
    Mr. Meadows. Okay. Because I've read your report five 
times, I feel like I know you, and so I want to go on a little 
bit further, because Lois Lerner, you know, it's been reported 
widely that she found out about this in July of 2011 is--but 
in--there was a sensitive case report that actually started 
back as early as April of 2010. Is that not correct? I think 
it's on page 32 or 33 of your TIGTA report. April of 2010. Is 
that correct?
    Mr. Kutz. April 2010, yes, that's correct.
    Mr. Meadows. Okay. And that report actually went to Ms. 
Lois Lerner at that particular point. So she could have known. 
It was meant to be reported. It was going to the executive, as 
Mr. Hull testified earlier today. And we also know that it went 
up to E and O. Could it have gone to her--her desk?
    Mr. Kutz. She gets a summary. She would not get the actual 
report, my staff----
    Mr. Meadows. So she would get a summary of the sensitive 
case reports?
    Mr. Kutz. Right.
    Mr. Meadows. Okay.
    Mr. Kutz. That's correct.
    Mr. Meadows. And so that summary, would it indicate that 
these were Tea Party cases?
    Mr. Kutz. We don't know.
    Mr. Meadows. Okay. Why would we not call these progressive 
cases from--from February of 2010 until July of 2011? Why would 
we not have called those progressive cases?
    Mr. Kutz. I don't understand your question.
    Mr. Meadows. Well, I mean, did we call them Tea Party cases 
because the majority of them were Tea Party cases?
    Mr. Kutz. We called them Tea Party cases because that was 
what was actually told----
    Mr. Meadows. Right. I mean, why would the IRS call them Tea 
Party cases? I mean, we're missing this whole point. We----
    Mr. Kutz. Because----
    Mr. Meadows. If they were predominantly progressive cases, 
wouldn't we have referred to them as progressive cases----
    Mr. Kutz. I believe----
    Mr. Meadows. --or Occupy cases?
    Mr. Kutz. I believe they're generally referred to Tea Party 
cases, meaning Tea Party, 9/12 and Patriots, because if you 
look at the names of some of the Tea Party organizations, they 
actually have the word ``Patriot'' in them. So I think that 
there's some combination. My understanding is 9/12 is a 
separate organization, but I think Tea Party Patriots is--is a 
frequent combination.
    Mr. Meadows. So if you think predominantly that these were 
liberal groups, would we have not probably come up with a 
different name, the IRS would have come up with a different 
name to refer to them as?
    Mr. Kutz. Let--let me say this: of the 298 cases, we know 
that 96 were Tea Party, 9/12 or Patriots. We did not go through 
and make a judgment about what the 202. You've read our report 
five times.
    Mr. Meadows. Right.
    Mr. Kutz. You know we did not do that.
    Mr. Meadows. Right.
    Mr. Kutz. And we really don't think it's--some of them had 
the words ``liberty,'' ``freedom.'' I don't think we could make 
a judgment based upon certain words. And that wasn't really our 
charge. Our charge was to look at the substance of the case and 
see if it had actual evidence of political advocacy.
    Mr. Meadows. All right. Knowing what we know now, and so 
let me get to--so we don't follow this red herring here, if--if 
we've got--as we start to look at these particular cases, 
knowing that you can't classify conservative or liberal, were 
Tea Party, 9/12, Patriot groups treated predominantly 
differently than the Occupy or progressive groups that we have?
    Mr. Kutz. We don't know. We did not audit Occupy or the 
other names you've used. We know everybody that got into the 
298, whether they were conservative, liberal, whatever, they 
were treated differently. The average time in our report was 
well over 500 days that they were sitting waiting. So--and we 
know there were 96 Tea Party, 9/12 and Patriot. That's what we 
do know, sir.
    Mr. Meadows. If I can ask one last question. We've been 
told by IRS employees that the case names actually appeared on 
the summary of this sensitive report that went up. Is that 
accurate? So those case names were actually on there, the ones 
that went to Lois Lerner? That's what we've been told by IRS 
employees.
    Mr. Kutz. We know they're on the actual case reports. 
That's what I'm told.
    Mr. Meadows. So can you check back with us and let--because 
that would make a big difference, because it would indicate 
that Lois Lerner probably knew about it as early as April of 
2010, some 14 months before she changed it.
    Mr. Kutz. Yeah. The first thing we know of Lois Lerner 
knowing is July of 2011, but we will check on the question you 
have and submit it for the record.
    Mr. Meadows. All right. Thank you. I appreciate the 
patience
    Chairman Issa. I thank the gentleman. We now go to the 
gentleman from Massachusetts.
    And if the gentleman would allow me 10 seconds before he 
begins.
    Would you also include in the gentleman's request, quite 
frankly, a short, quick analysis to see if you can find one or 
more of this nearly 300 files that your people could 
potentially go through that is, in fact, clearly not 
conservative? And if you find one or more, would you inform the 
ranking member and myself? I know that an exhaustive, extensive 
search might take time, but if it's there, I think the ranking 
member and I would love to know anecdotally that at least one 
likely, and we will then go to the Ways and Means Committee to 
ask for a detailed look, because right now, you know, we show 
that there are seven that have the name ``progressive.''
    Mr. George. The answer's yes, Mr.----
    Chairman Issa. Okay. So----
    Mr. George. And it may be more than one, but, so----
    Chairman Issa. Okay. So--so progressive likely are not 
conservative groups, right?
    Mr. Kutz. We didn't look below the name. I mean, there 
were--there were, I think, three with the word ``progressive,'' 
and there were no ``Occupy'' in the 298.
    Chairman Issa. Okay. I've taken too much time. I'll come 
back to it. You know, I think--I think all of us here at some 
point are going to want to know of nearly 300, how many of 
them--I mean, if you dig down into them, whether deliberately 
or accidentally were set aside in this group of people that 
wait 500 days.
    You know, I think the ranking member and myself, we may 
argue about a lot of things, but we don't want to argue about 
the facts. If the facts are that--that people got abused for a 
myriad of reasons, we'd like to know it.
    There's one thing that I think we all are going to know at 
the end of this hearing is groups got sectioned out, and they 
got abused in the process, and that's the undeniable part. Now 
we--we want to dumpster dive, if you will, a little bit in to 
find out why, but certainly I don't think any of you or any of 
us here think that this be--or the president thinks that this 
behavior was acceptable.
    Yes, Mr. George.
    Mr. George. I don't know whether you were in the room, but 
I indicated that I requested that my staff do take a look to 
see how these other groups were treated, but again, during the 
course of this additional review that we're doing with the FBI 
and the Justice Department, some of this has to be held in 
abeyance until that aspect of the work is done, but we will try 
to comply with your request.
    Chairman Issa. All right.
    And, Mr. Cummings, maybe you and I should speak off line, 
but it would be our considered opinion, I believe, that this 
committee can receive knowledge which cannot be made public, so 
that at least we could understand whether or not there was a 
there there, even if it has to be withheld. We don't norm---we 
want to be very public, but we certainly, I think, would join 
together to say if you find certain--some of those things in 
your investigation, we'd like--sort of consistent with the 7-
day rule, we'd like a non-public disclosure, so at least we 
know how to plan going forward.
    Mr. George. And I've just been informed by staff that we 
can comply with that within a timely period, sir.
    Mr. Cummings. Would the gentleman yield?
    Chairman Issa. Of course. The chairman will yield as much 
time as the ranking member wants.
    Mr. Cummings. I apologize. I just want to get this 
straight, Mr. Chairman.
    Chairman Issa. We haven't started the clock. Go ahead.
    Mr. Cummings. Real quick. Can you put some kind of timeline 
on that for us? I mean, do you have any idea? Because we may be 
next year.
    Mr. George. Actually, I'm told, sir, it could take us 
almost as long as a month from now. We have the information, 
but it's voluminous, sir.
    Mr. Cummings. Well, a month is not as bad as a year.
    Chairman Issa. That's lightening time when we're going to 
be gone all of August.
    Mr. George. Okay. Right.
    Chairman Issa. So--but we look forward to hearing that by 
the time we come back from the August----
    Mr. George. Maybe we could work with your staff just to 
ensure that we are all on the same----
    Chairman Issa. We will--we will work together with your 
folks.
    Mr. George. Thank you.
    Chairman Issa. Mr. Tierney, thank you for your patience.
    Mr. Tierney. Certainly. Thank you.
    Mr. George, in your testimony, you made a statement that 
raised some concern the with me, and I quote, your statement 
was, ``the letter from Ranking Member Cummings to the chairman 
dated July 12, 2013, states that I failed to disclose to 
Congress that we found no evidence of political motivation.''
    I think, you know, when I read the letter from Mr. Cummings 
to Mr. Issa, that's not what it says. Let me, in fact, read to 
you what it says. It says, Mr. George did not disclose to the 
committee either in his report or during his testimony that he 
met personally with his top investigator and tasked him to 
conduct the review of 5,500 emails of IRS employees and that 
this official concluded after this review that there was, ``no 
indication of pulling these selected applications was 
politically motivated,'' a fact that this official reported 
was, ``very important.''
    That's quite a distinction from what you were saying in 
your testimony, Mr. Cummings, had said, and so I wanted to make 
sure that we were all on the same page here.
    But the fact of the matter is, Mr. George, you never told 
this committee, you never disclosed about your meetings with 
your top investigator, did you?
    Mr. George. Yeah. Well, sir, for two reasons: one--and, 
again, you weren't in the room when I explained this earlier--I 
was told by my staff that there was a smoking gun email in 
which an IRS employee either, and this is not verbatim, but 
acknowledged that he or she was charged with targeting Tea 
Party people--and, again, I know there's a nuance here that my 
colleague can address in a moment--and that there were, again, 
roughly 5,000 emails that the auditors had not had a chance to 
review, but that my investigators----
    Mr. Tierney. I guess the point is, if I can be so--to 
interrupt you, but you never told us that you charged your 
investigator with looking at the 5,500 emails.
    Mr. George. Well, sir, but because it's very important, 
this was an audit. It was no more than an audit, sir.
    Mr. Tierney. All right. So he reported to you that the 
emails showed no indication of any political motivation, and 
you didn't think it was important to share that information 
with this committee?
    Mr. George. Well, sir, because I don't know whether there 
was an email that was destroyed. This was done very quickly. 
There may have been an email that was destroyed.
    Mr. Tierney. Well, it certainly wasn't amongst the 5,500 
that he reviewed.
    Mr. George. Yeah.
    Mr. Tierney. --that he thought that it was very important 
that he found nothing in there that was politically motivated.
    Mr. George. Well----
    Mr. Tierney. And then you just thought you weren't going to 
share that with the committee?
    Mr. George. Well, that was one--that was his opinion. And--
and, then, so if--under oath, when people are subject to a lot 
more, you know, potential penalties regarding their behavior 
and responses to questions and additional information 
available, who knows whether or not this email will surface. I 
don't know, sir.
    Mr. Tierney. Well, no. I'm not asking about one that may 
service in the future. I'm asking about the 5,500 that you 
charged your investigator to look through, and he reported--let 
me tell you what he reported back. The emails indicated the 
organizations needed to be pulled because the IRS employees 
were not sure how to process them.
    Mr. George. Right.
    Mr. Tierney. Not because they wanted to stall or hinder the 
application. There was no indication that pulling these 
selected applications was politically motivated.
    Mr. George. Yeah.
    Mr. Tierney. The email traffic indicated that there was 
unclear processing directions, and the group wanted to make 
sure they had guidance on processing the applications, so they 
pulled them. This is a very important nuance. So your 
investigators went through 5,500. That's what I found. I think 
it's an important nuance. You then had it in an earlier draft 
report, and you scrubbed it.
    Mr. George. I'm going to ask----
    Mr. Tierney. What's that all about?
    Mr. George. Well, there's a reason for that.
    Mr. Kutz. Because the investigator said that our report 
support--that their work supported the fact that we said 
ineffective management. Our report also said there was no 
political motivation. He's testified to that today.
    Mr. Tierney. Right. But you didn't give us the--I mean, I--
you don't think it's important that you look through 5,500 
emails and had a report from an investigator that said the 
words I just quoted? You don't think it would be important for 
us know to that, when everybody's running around here trying to 
make allegations and, you know, hyperventilating about it being 
something more than it is? You don't think that was important?
    Mr. Kutz. Well, we thought it was important because it 
confirmed our report. And he told us that it confirmed our 
report.
    Mr. Tierney. So why didn't you put it in there?
    Mr. Kutz. We----
    Mr. Tierney. I think it's important because it confirms 
your report as well. I think it gives us the kind of substance 
that may have stopped some of this, you know, allegations that 
are running around here rampant and people, you know, going 
off, you know, and taking these positions that don't make any 
sense when the facts are out there. These are facts that 
support your report that are pretty important.
    Mr. George. Sir, this is an ongoing matter. If, at the 
conclusion of this, if you were to make the same allegations, 
mea culpa. I would join you in admonishing me. This is an 
ongoing review, and we're working with the FBI. We're working 
with the Department of Justice. We're doing subsequent work 
looking at various other treatment of taxpayers.
    Mr. Tierney. That's fair. But it would have been helpful to 
have that----
    Mr. George. Hindsight's 20/20, sir.
    Mr. Tierney. --at the appropriate time, because it opened 
the door to a lot of people going off in directions that are 
just----
    Mr. George. But not at my----
    Mr. Tierney. --helter-skelter.
    Mr. George. Sir, I didn't suggest they do that.
    Mr. Tierney. No, no. You did not suggest it, but I'm 
suggesting that if you had left it in your report instead of 
scrubbing it out, if you had wanted to tell us that you did 
have an investigator involved even though it was audit, that he 
looked through 5,500 emails, that he found out that, you know, 
there was no indication that pulling these selected 
applications was politically motivated, all of those things, I 
think, would have been important at the right time on that.
    So, Mr. Cummings, I don't know if you want any more time on 
that. Otherwise, I'll yield back.
    Chairman Issa. The gentleman yields back his negative 24 
seconds.
    We now go to the gentleman from Florida, Mr. DeSantis.
    Mr. DeSantis. Thank you, Mr. Chairman.
    And the gentleman from Ohio, would you like me to yield?
    Mr. Jordan. You go first.
    Mr. DeSantis. Go first? Okay.
    Mr. George, I know that some of our colleagues on the other 
side have attacked the manner in which your audit was 
conducted. I think Ranking Member Cummings wrote a letter 
requesting your testimony. In that letter he wrote, he implied 
that your audit was purposely tailored in a way that shows only 
conservatives were targeted. It that true?
    Mr. George. The--his assertions or that----
    Mr. DeSantis. His assertions.
    Mr. George. No. No.
    Mr. DeSantis. Were--were there any facts that your team 
uncovered that were intentionally left out of the audit?
    Mr. George. You know, there are always decisions made as to 
what information should and should not be included in an audit, 
some which are--have, you know, just a tangential relationship 
to the overall subject matter, others that might be, you know, 
in hindsight deemed extraordinarily important and then the vast 
majority in between, which is why there are different 
iterations of it, which is why the subject of the audit is 
included in almost every step of the audit process, to make 
sure that we don't misstate facts or that if they deem 
something that is of great importance that we neglected to 
mention, that we are in a position to include it. So--so I 
don't know. Did you want to add anything to that?
    Mr. Kutz. No. I mean, with respect to what Mr. Tierney was 
talking about, we were told that what they found validated the 
facts in our report, and we thought that made us feel good that 
our report was accurate. And we didn't say something in 
addition to what we already said, because we'd already said 
what he found.
    Mr. DeSantis. So any facts that were left out, I mean, 
there was no intent to kind of skew the result of the report in 
one direction or another?
    Mr. Kutz. It didn't change the report. We just didn't say 
we did it. That--that--that's the difference.
    Mr. George. And the answer is no. And nothing that has been 
alleged here at all changes our conclusion that the IRS engaged 
in inappropriate behavior and this showed gross mismanagement 
in the process of operating this program, sir.
    Mr. DeSantis. And what was your reaction to the letter that 
the ranking member sent to Chairman Issa? Have you had a chance 
to read that?
    Mr. George. I--just in passing. There's been so much 
paperwork, sir, but, I mean--so, I mean, it's--you know, again, 
this is Washington. This is a highly contentious issue. I 
understand if, you know, if there's a feeling that it's not 
perfect what we have done, but, you know, being human beings--
I'm from, you know, the old school. By definition, being a 
human being, were imperfect, so I can't say that, you know, 
anything that a human does is perfect. Would I have loved for 
him to given me a gold star on it? Of course. He didn't do 
that.
    Mr. DeSantis. Well, this is Washington, after all. Thank 
you.
    And I'll yield the balance of my time to the gentleman from 
Ohio.
    Mr. Jordan. I thank the gentleman for yielding.
    Look, Mr.--Mr. George, if you're such a Republican 
political hack, look, I've been a little critical of a couple 
things in your timeline, but if you're favoring the 
Republicans, we got the TIGTA timeline the last time you were 
in front of this committee testifying. And on May 30th of last 
year, you shared with the IRS commissioner initial findings of 
your audit that Tea Party, Patriot, 9/12 were used to target 
groups. Four days later, you shared that with the chief counsel 
at the Treasury.
    Mr. George. Correct.
    Mr. Jordan. But you didn't share it with us. You had to--
think about this. Put it in context. That's in the middle of a 
Presidential election year. That's kind of important 
information for people to get, but you chose, because what Mr. 
Gowdy said, you're calling the balls and strikes here. You're 
going to play it down the middle. You're going to play fair. 
You chose not to share that information with the chairman of 
the committee, with me as the chair of the subcommittee who 
asked for the audit, and we're the committee that has 
jurisdiction over the inspector general. And you said, you know 
what? I'm not going to do it, because that would look 
politically motivated as well. So this idea is just baloney. I 
mean, I wish you would have shared it, frankly, but--and I made 
that point clear a month and a half ago when you were here. It 
makes no----
    And here's the other thing. Look at the facts. I know media 
reports one or two left wing groups said they experienced 
delays, but they got approved, but I know of dozens and dozens 
and dozens of conservative groups that got not only delayed, 
but still haven't been approved, because one of them is in our 
district and is what prompted the chairman and I to request the 
audit in the first place.
    So the other side can say all the baloney the want, but the 
facts are the facts. That--that's what--I got fired up again, 
as I do sometimes in this committee.
    But, I mean, look, you were calling the balls and strikes, 
because, frankly, I would have loved to have had that 
information in May of 2012 that dozens and dozens and dozens of 
conservative groups were being targeted, and you chose not to 
give it to the very committee who asked for the audit. And 
that's fine. That's your role. But to say you're somehow 
favoring the Republicans, I just don't get it.
    Mr. George. It was never a consideration of politics at 
all, sir. Never considered.
    Mr. Jordan. And you're proving that, you're proving that.
    Chairman Issa. Because if politics had been the case, 
releasing that just before the election would have been 
dynamite for the Republican side. If you--if you wanted to play 
Republican politics, you could have had a heck of an impact by 
showing that they were going after Tea Party people 
systematically at a time in which the President was up for 
election, right?
    Mr. George. But if I may, sir, the most important factor 
that I--that I took into consideration is that the audit was in 
midstream; it wasn't complete. Had it been complete, it would 
have been released. It was not complete.
    Chairman Issa. Thank you. We now go to the gentleman from 
Illinois.
    Mr. Tierney. Will the gentleman first yield for a question?
    Chairman Issa. I--I don't control any time.
    The gentleman from Illinois is recognized.
    Mr. Davis. Thank you very much, Mr. Chairman----
    Chairman Issa. He can certainly yield.
    Mr. Davis.--and thank you, gentlemen, for being here.
    Mr. George, I'm--I'm recalling that when you appeared 
before this committee before, I specifically asked you how 
several progressive groups had been included in the list of 
298. Neither your testimony nor your report revealed that you 
had limited your investigation solely to targeting of 
conservative political campaign ideology.
    When you wrote Congressman Levin, you stated that you were 
nonpartisan. When I asked you at the Ways and Means hearing how 
this audit started, you stated that you met with staffers from 
the Oversight Subcommittee. Were these Democratic staffers or 
Republican staffers, or were they both?
    Mr. George. You know, thank you so much for this 
opportunity, because I actually misspoke in response to, I 
don't know whether it was you, Mr. Cummings, or it was--whether 
it was Ms. Norton, but who inquired about the first time that I 
sat down with Mr. Issa. And I was informed that at--at a staff 
level, two of my staffers, three of my staffers met with Chris 
Hixon, a staffer of the Government Reform majority staff on 
March 8th, and this was prior to the--the audit. And so I--I 
wanted to clarify that now. And then----
    Mr. Davis. And so there were no Democratic staff or 
staffers present at this meeting?
    Mr. George. That's my understanding.
    Mr. Davis. Did anyone ever raise any concerns that there 
may not have been any Democratic staffers present?
    Mr. George. No one raised concerns to me about that. I 
don't know if----
    Mr. Kutz. I wasn't there.
    Mr. George. Are you aware?
    Mr. McCarthy. [Nonverbal response.]
    Mr. George. All right.
    Mr. Davis. And so you're basically responding to staff 
inquiry, and on the basis of that, you initiated the audit?
    Chairman Issa. Would the gentleman yield? The chair--very 
quickly. The chair in a formal letter requested that. The 
consultation earlier on led to a letter which the ranking 
member received. Thank you.
    Mr. Davis. So once the chairman--Mr. Chairman received the 
concern, the expression or the information, then you actually 
initiated----
    Chairman Issa. Right. It was in a--it was in a letter that 
was CC'd to the ranking member requesting his audit. If the 
gentleman wants to be involved in protecting, you know, these 
groups, we're happy to have you help us with the Tea Party 
complaints. I will tell you, over in the Senate, the Senate 
Democratic leaders were constantly sending letters to the 
others--from the other side asking that they go after these 
groups. These are all in the record.
    Mr. Cummings. Will the gentleman yield just so I'll help 
him with--just--would you just yield just for a second?
    Mr. Davis. Yeah.
    Mr. Cummings. We--okay. We--staff tells me we got the 
letter that the chairman sent out, we did get a copy of that, 
but we did not get a copy of the response from Mr. George to 
that letter. All right. Then you can let--thank you very much 
for yielding. And I'll enter George's response into the record.
    Chairman Issa. Without--without objection, it will be 
placed in the record.
    Mr. Cummings. All right. Thank you.
    Mr. Davis. Thank you. Reclaiming my time.
    Mr. George, there's been a great deal of discussion about 
whether you found any White House involvement or political 
motivation in your investigation, in your report. And I believe 
the statements on page 9 of your written testimony make clear 
that you found nothing of the kind, no documents, no witnesses, 
nothing. Is that correct?
    Mr. George. That is correct, as of the time of that audit, 
sir.
    Mr. Davis. Are you suggesting that at some other time, you 
found something else?
    Mr. George. I'm--I'm suggesting, sir, that this is an 
ongoing review, and I'm not going to make any conclusions 
beyond what we have already done with a concluded--an audit 
report that has been concluded, but this is an ongoing matter, 
and I'm not going to prejudge the findings.
    Mr. Davis. So as of this moment, nothing has been found 
that would suggest any kind of political motivation or 
involvement coming from the White House?
    Mr. George. That is correct, sir, nothing as of now.
    Mr. Davis. Thank you very much. I yield back.
    Mr. Cummings. Would the gentleman yield?
    Mr. Davis. Yes.
    Mr. Cummings. Mr. George, I want you to understand 
something. I've been sitting here listening to the other side. 
You know, we're no potted plants over here. And I've gone on 
numerous television shows, and they've asked me, do I trust you 
and things of that nature? I said I have questions, and I will 
reserve judgment. I have--and I want to make that very clear. 
And for us to inquire about things that may have been left out 
of a report, and we even used that in hindsight it may have 
been a little different, but I'm going to tell you, that's my 
job to ask questions, and I will ask them, just like I would 
expect the chairman to ask them. So, you know, I'm glad--and I 
think it was--I think it's good that you came in here to 
clarify that. You know, I don't go out there and say, oh, 
George is a horrible person. I said let--I don't understand 
this, so let him come in with his people and explain it. I just 
want to make that clear to you. All right?
    Mr. George. I appreciate that.
    Mr. Cummings. All right.
    Mr. George. Thank you.
    Chairman Issa. Thank the gentleman.
    We now go to the gentleman from--the gentleman from North 
Carolina has been pushed off by the gentleman from Tennessee.
    If you're going to argue, I'll take the time.
    Mr. Duncan. I'll yield. I'll yield to the chairman.
    Chairman Issa. Thank you. I recognize the gentleman, and 
I'll take a little of his time when they come back.
    Mr. George, I just want to make sure to get a couple of 
things straight. Earlier Mr. Tierney was--was inquiring about 
what I have as a count, he called it 5,500, I have 5,617 
different emails that came up as hits based on key word 
searches of a number of IRS employees, and those key word 
searches, obviously, we've talked about the 9/12, the (c)(4).
    Now, Lois Lerner made a series of denials and statements 
and attempted to take the Fifth before this committee. I don't 
see her listed as some--as somebody that you did a search on in 
this group. It's up on the board. Can we inquire as to whether 
a similar search has been done on her emails?
    Mr. George. You know, sir, I have--my deputy, who conducted 
or authorized----
    Chairman Issa. As these are all Cincinnati people, and, 
again, this committee is not presuming there is political 
intent. We're looking for the communication to find out some--
why something even the President has said was wrong went on.
    Mr. McCarthy. All right. This was a search that was done 
during the course of the audit. It was a limited search. But 
we're not going to go into any----
    Chairman Issa. Current----
    Mr. McCarthy. --current----
    Chairman Issa. Current----
    Mr. McCarthy. --activities.
    Chairman Issa. Okay. Well, then I'll just use the time 
briefly to say, certainly when somebody comes before this 
committee and refuses to answer questions in their official 
conduct, we would hope that you have preserved those records.
    Additionally, it is the intent to work with Justice and 
yourself to make sure that individuals who take the Fifth 
before this committee not only appropriately have their 
official mail checked, but because there has been a record of a 
number of individuals using private mail to circumvent official 
mail auditability, that you would also make efforts with the 
Justice Department, if appropriate, to determine whether or not 
they may have used such a technique, since that has been 
repeatedly seen by this committee.
    I'm not asking for your answer. I realize that there are 
ongoing investigations as to possible wrongdoing.
    Mr. George. I would just say the FBI, Justice Department 
utilize different----
    Chairman Issa. They have warrant authority, right?
    Mr. George. Well, among other things. And, again, I'm not 
going to confirm or deny an investigation, sir, at this time. 
We're--it's a review----
    Chairman Issa. Okay.
    Mr. George. --from our perspective.
    Chairman Issa. Now, your best efforts--and Mr. Duncan, if 
you need your time back, let me know.
    But your--your best effort, if I understand correctly, 
you're going to have your people, and I know we're going to 
work on it off-line, you're going to have your people make 
every effort to take what we currently know, which is on a key 
word basis, 96 out of--out of 96 groups come up as Tea Party or 
9/12 Patriot, 7 come up as progressive, and currently, you 
don't have any specific knowledge of time delays that occurred. 
We have a lot of knowledge that these were, as you said, 500 or 
so days, but the breakdown of groups that may have been caught 
up in the net that may not have been conservative or may have 
used ``progressive'' but not been liberal groups, you're going 
to make every effort to get that information and give it to us 
in an acceptable format?
    The gentleman, Mr. McCarthy.
    Mr. McCarthy. Mr. Chairman, if I could, one of the 
questions that came up was we get a lot of questions about the 
298 cases and what are the names on there. And as the inspector 
general testified, we don't want to be in a position of trying 
to characterize things as liberal or conservative. One of the 
things that we have been able to do and we did very early on in 
the process is when we received the 6103 request from the Ways 
and Means Committee and the Senate Finance Committee, we 
provided the list to them. So Congress has these lists. If it 
would be appropriate for Congress to do an analysis within that 
list of 298 of who's liberal and who's conservative, I don't 
know if that would--that would be an option that would satisfy 
what you're looking for.
    Chairman Issa. Okay. The ranking member and I have agreed 
that we'll--we'll find a way to try to do that within our 
halls.
    Mr. George, you've been a Federal employee for, what, a 
short 20 years or so?
    Mr. George. 25.
    Chairman Issa. 25. So compared to the first panel, you're--
you're a newcomer.
    Mr. George. Yes.
    Chairman Kutz. Mr. Kutz, how long have you worked for the 
Federal Government?
    Mr. Kutz. About 23 years.
    Chairman Issa. Mr. McCarthy, including your time here?
    Mr. McCarthy. About 13 years, sir.
    Chairman Issa. Now, Mr. McCarthy, you served here under--
under a Democratic chairman, so I'm not going to ask you any 
questions for a moment, nor do I assume your politics.
    Mr. George and Mr. Kutz, in your regular dealing, both 
yourselves and the people you deal with through Treasury at 
IRS, do you routinely either tell people what your politics 
are, Republican, Democrat or other, or do you routinely ask 
them what their politics are?
    Mr. George. You know, Mr. Chairman, with the exception of 
this gentleman, because of the fact that I hired him----
    Chairman Issa. We--we----
    Mr. George. --from this committee, so I could guess what 
his leanings were----
    Chairman Issa. Or at least who liked him a lot, although we 
liked him on both sides of the aisle, but doubtless, he's a 
good professional.
    Mr. George. I have no idea whatsoever of the political 
persuasion of any other member of my 800-person staff. Never 
once have I had a conversation with them about their political 
persuasion.
    Mr. Kutz. I----
    Chairman Issa. Yes. Go ahead.
    Mr. Kutz. I have not either with my staff or with IRS 
officials. That is not the kind of thing I would feel 
comfortable talking about.
    Mr. George. And I need to amend it. IRS, nor with the IRS, 
none.
    Chairman Issa. That's good. And that's the way I think we 
want it to be, and I thank you.
    The gentleman from Massachusetts, Mr. Lynch, is recognized.
    Mr. Lynch. Thank you, Mr. Chairman. Mr. George, sometimes 
there's--in cases like this, that are controversial, there's 
collateral damage among the innocent, and I want to ask you a 
line of questioning here about the IRS Office of Chief Counsel. 
It's my understanding that the IRS Office of Chief Counsel 
periodically provides the Exempt Organizations Unit with 
guidance regarding how to process applications of 501(c)(4) tax 
exempt status. Is that correct?
    Mr. Kutz. Yes. That's my understanding.
    Mr. Lynch. Okay. Thanks, Mr. Kutz.
    In the past, the chairman has described that involvement by 
the IRS Office of Chief Counsel as, ``unusual,'' ``atypical'' 
and, ``a break from ordinary procedure.''
    Now, contrary to those descriptions, several IRS employees 
that have been interviewed by the committee have basically said 
that the decision to consult with the Counsel's Office is 
consistent with their usual practice. For example, Mr. Hull's 
direct successor as the tax law specialist in the Washington, 
D.C., office, by the way, a self-described Republican, stated 
that it was, ``common for us to ask for their assistance in 
review.'' And further she said, it was for the purpose of an 
extra--an extra pair of eyes, additional attorneys to weigh in 
on the application of this area of the law. She goes on and 
says, to review the kind of, I would say, well, hazards of 
litigation, you know, whether there could be a strong argument 
made later on down the line on the decisions that we made and 
whether the kind of--whether this was worth it going forward to 
deny an organization, for example, or approve them.
    Similarly, there's another Technical Unit Group manager who 
as well described the chief--the office of--excuse me, the 
chief off--Office of Chief Counsel for the IRS as offering 
similar services.
    In your investigations, is it--is it ordinary practice for 
different units on specialized questions to seek guidance from 
the Office of Chief Counsel for the IRS?
    Mr. Kutz. We don't have detailed understandings of that. 
What we do know is in our timeline in our appendix to our 
report, there is a reference to some meetings with chief 
counsel that happened as part of the Tea Party and other 
criteria with respect to our audit, so we can only speak to 
that limited piece of information.
    Mr. Lynch. Okay. Then let's get to those points, then. In 
several case there have been--it's been alleged that there have 
been considerable delays that were motivated by a desire to 
stop the granting of (c)--you know, tax exempt status to some 
of these groups by going to chief counsel.
    Has your investigation shown that any of the attempts of 
conferring with the Office of Chief Counsel were--were done for 
the purpose of deliberate delay?
    Mr. Kutz. We don't have any details on intent necessarily. 
What we do know is that it was part of the confusion and the 
delay story. And, of course, we concluded ineffective 
management overall was the cause of what happened here. So it 
was part of that, but we found we have no indications of 
intent, but we did not interview anyone directly from the 
Office of Chief Counsel.
    Mr. George. And I've been told by the auditors that 
actually conducted the audit that, no, we do not have 
information to that effect, sir.
    Mr. Lynch. Okay. Mr. George, let me ask you, when you were 
here last time, we talked about three categories of groups that 
were given extra scrutiny by the IRS. There were some 
progressive groups that were--were listed. The vast majority 
were conservative groups, but there was also a category that 
was described as individuals who were critical of the way the 
government was being run. That was--that came out of a hearing.
    Do you have any recollection of facts or circumstances 
around that last category, people who were critical of the way 
the government was being run?
    Mr. George. To make it clear, though, our audit did not 
characterize people by progressive or conservative. And then 
that last category was a category that the Internal Revenue 
Service itself devised when it, well, you know, went away from 
the Tea Party, you know, upper case, lower case Tea Party----
    Mr. Lynch. Okay.
    Mr. George. --name, and so----
    Mr. Lynch. Okay. So let me get this straight. I just want--
this is a fine point. So the IRS actually adopted the category 
here for greater scrutiny.
    Chairman Issa. I'd ask unanimous consent the gentleman have 
an additional 15 seconds. Without objection.
    Mr. Lynch. Thank you, sir. The--so the IRS actually came up 
with this--this term, this Be on the Look Out for individuals 
who were making application who were critical of the way the 
government was being run?
    Mr. Kutz. It was not on the Be on the Look Out. It was in a 
memo--a briefing that Lois Lerner had in June of 2011. In our 
report, it's showing Figure 3 as some of the expanded criteria 
that were used. The only thing in the BOLO's was the Tea Party. 
These other criteria like 9/12, Patriots, issues include 
government spending, government debt or taxes, the one you 
mentioned here, statements in the case file criticize how the 
country's being run, those were being used by the screeners 
when Lois Lerner asked, what's actually going on to screen 
cases for political advocacy. So that came from the screeners 
who were actually looking through the cases and funneling to 
the political advocacy pile, if you will.
    Mr. Lynch. Okay. So----
    Chairman Issa. Thank you. We now recognize the gentleman 
from North Carolina, Mr. McHenry.
    Mr. McHenry. Thank you, Mr. Chairman.
    At the heart of this hearing today and this ongoing 
investigation about the IRS is that we have millions of 
Americans that live in fear of their government. And that's not 
whether you're a liberal or a conservative, you're a Democrat 
or Republican, or you don't care at all about politics, you 
don't want to live in fear of your government. And that's 
what's frightening about this. And the more that we've 
investigated here in the House, the more that we find that is 
disturbing, deeply disturbing. And so when we--when we talk 
about this question about, you know, these--these cases being 
shipped from Cincinnati up to Washington, some want to believe 
it's because these were hard or complex cases, but what we 
found in our investigation is we have cases that were sent from 
Washington--from Cincinnati to Washington based on news reports 
about a class of Tea Party folks.
    Then we've also heard from Carter Hull that he had--he had 
cases taken from him, and he's got 40 years of experience, and 
given to somebody who has very little experience with these 
cases. So the idea that it was complexity that drove this, it 
doesn't appear to be the case.
    What we find is that it was the politics that mattered, and 
that leads us to be more fearful of what the IRS is doing.
    Now, Mr. George, have you found anything counter to what 
I've said?
    Mr. George. Counter to what you said. No. I mean, the IRS 
has one of the most important roles in the Federal Government, 
it is one of the organizations that most Americans at one point 
in their lives or another will have to interact with. It has to 
have the trust of the American people. We live in a voluntary 
compliance system, and if people don't trust that system, it 
can undermine, you know, this Nation.
    Mr. McHenry. Trust.
    Mr. George. Trust, yes.
    Mr. McHenry. Well, you know, I appreciate you all's 
testimony and the work that you do on a daily basis to be that 
oversight, that inspect--you know, that inspector generals are 
there for that purpose. Regardless of what administration's in 
power, there needs to be a check on this.
    And so going back to the first panelist's testimony, I 
referenced Mr. Hull, but also Ms. Hofacre, she testified that 
she accidentally sent this BOLO, this Be on the Look Out list, 
to Washington personnel. Have you found that in your 
investigation?
    Mr. Kutz. We--we didn't see that, no.
    Mr. McHenry. You did not see? She testified to it on the 
first panel. So it--so--so then it leads to the question, so if 
she accidentally sent this to Washington leadership, shouldn't 
they have known this was happening?
    Mr. Kutz. All we know is according to Lois Lerner, this 
briefing I mentioned a minute ago to Congressman Lynch, Lois 
Lerner started asking questions and was first briefed in June 
of 2011. That's what we know at this point. There could be more 
information, but that's what we know based upon our audit.
    Mr. McHenry. Okay. Well, with that, I'd like to yield the 
balance of my time to my colleague----
    Chairman Issa. Would the gentleman yield just 15 seconds 
first over here?
    Mr. McHenry. Happy to yield to the higher ranking 
individual.
    Chairman Issa. We're not higher ranking.
    There's been a lot of debate here, and I know you're not 
tax experts, but if I understand the letter of the law on 
501(c)(4)'s, primary group was--was (c)(4)'s, 501(c)(4)'s must 
have the majority of their activity not, if you will, 
political, not advocacy.
    Mr. Kutz. Social welfare, yes.
    Chairman Issa. Social welfare. And throughout this audit 
and the targeting, did you find that they were using that 
standard, in other words, looking for, was it less than 51--or 
less than 49--49 percent or less, or did you find that they 
were looking for nuances? And the reason I ask that is, as you 
know from your audit, in 2010 or shortly afterwards, they began 
asking for what did you do in the last cycle, in other words, 
auditing as though they had granted something which they hadn't 
yet granted.
    And the reason I ask that is I just want to know, is there 
any semblance of information that they were not using, if you 
will, the existing law, but looking for advocacy that could 
have been certainly well less than 50 percent?
    Mr. Kutz. I heard Ms. Hofacre say the 50 percent. I think 
that must be an unwritten rule, because we haven't seen it in 
writing as far as I know. But our issue was using names and 
policy positions is the wrong thing to do. And the basis of our 
audit was the substance of the case, which is what we looked 
at, whether there was significant campaign intervention in the 
file, and that's what we recommend IRS should be doing going 
forward.
    Chairman Issa. Thank you. I yield back.
    Mr. Jordan. Well, I thank the gentleman. I have just a 
couple seconds, if I could.
    Mr. George, the fact that you referred a case to the 
Department of Justice for willful misconduct regarding the 6103 
and political donor, and Justice chose not to prosecute, does 
that cause you concern about the Department of Justice 
investigation of this issue?
    Mr. George. It--it does not, sir, just because of the 
various standards.
    Mr. Jordan. Has--has the new FBI director contacted you? 
Have you talked to Mr. Comey about the IRS targeting case?
    Mr. George. No, no.
    Mr. Jordan. Have you been in contact with the FBI?
    Mr. George. Yes.
    Mr. Jordan. How many times--since the case was launched, 
how many times have you had conversations with the FBI?
    Mr. George. We've had meetings with various senior FBI----
    Mr. Jordan. Can you give me a number?
    Mr. George. Two.
    Chairman Issa. Okay.
    Mr. Jordan. Two meetings?
    Chairman Issa. Thank the----
    Mr. Jordan. Just two meetings?
    Mr. George. Yes.
    Chairman Issa. Okay. Thank the gentleman.
    We now go to the gentlelady from California, Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    Mr. George, I have the highest regard for inspector 
generals. We can't do our job in this committee if we don't 
have inspector generals that will guide us, show us where the 
red flags are, but we need objective IG's that are not in any 
way going to spin something one way or the other. So let me ask 
you this: Last week, almost 8 weeks after you published your 
audit, our committee received an email dated May 3rd that 
revealed that you had tasked the head of your investigation 
office to run a search of IRS employee emails. According to 
your head of investigations, the purpose of the email search 
was to determine, and I quote, ``if an email existed that 
directed the staff to target Tea Party and other political 
organizations.''
    So you were looking for any evidence that staff was 
directed to target Tea Party groups as well as any other 
political organization. That's what the email said. Correct?
    Mr. George. I don't know verbatim what the email said, but 
I do know what I instructed my deputy for investigations. I was 
informed by an auditor, or maybe someone from the counsel's 
shop, I'm not sure which division, but----
    Mr. Kutz. Representative, IRS--we were looking for an email 
IRS told us existed. Okay? That's--let me make sure I clarify 
that.
    Ms. Speier. All right. So let me go on. The email goes on 
to explain how this search was supposed to work. This is what 
your head investigator wrote, ``audit provided us with a list 
of employees in question, key word search terms and a time 
frame for the emails. We pulled the available IRS emails, which 
resulted in 5,500 response emails.''
    So they used key words to search to identify the emails 
they wanted to review. Is that right? They used key search 
words.
    Mr. George. Yes, yes.
    Ms. Speier. All right. Earlier this week the ranking member 
of our committee, Mr. Cummings, wrote to you to request the 
specific search terms that your staff used to pull these 
emails, and late last night we received a document from your 
office that lists them out. It's a very short list. According 
to this document, your staff used only four key word search 
terms, and this is what they were: Tea, Patriots, 9/12, and 
(c)(4).
    Now, that seems completely skewed, Mr. George, if you are 
indeed an unbiased, impartial watch dog. It's as if you only 
want to find emails about Tea Party cases. These search terms 
do not include any progressive or liberal or left-leaning terms 
at all. Why didn't you search for the term ``progressive''? It 
was specifically mentioned in the same BOLO that listed Tea 
Party groups.
    Mr. George. You know, unlike--my colleague didn't complete 
his answer. I was told that there was a specific email that 
identified Tea Party, 9/12 and/or Patriot, and that--and that 
this email was the, ``smoking gun.''
    Ms. Speier. All right. You've said that. You've testified 
to that before. We know that. Okay? But when you're doing a 
search, you are an impartial third party. You know this BOLO 
list had a number of other groups. Why wouldn't you--I mean, 
it's not like it's costing you any more to search for these 
other terms when you're searching 5,500 emails, correct?
    Mr. George. Well, the BOLO lists that we were focused on 
was on political activity. And we--again, and unless I'm 
mistaken, the progressives were--and just if you want to 
address this.
    Ms. Speier. No. I've got a training workshop with 
PowerPoints that lists both parties, lists progressive groups. 
You've redacted it. Two bullets. We don't know what the second 
bullet is. So, I mean, you've done a training program on this. 
Did you not--why wouldn't you search for ``Occupy''?
    Mr. George. Now I will ask Mr. Kutz to respond.
    Mr. Kutz. Well, the emails we were looking for were ones 
that IRS told us existed but could not find, and that was the 
purpose of looking for the emails. You're talking about on the 
limited search we did, which was to support information that we 
were looking for. Now you're talking about the document I think 
that we received on July 9th, 2013.
    Ms. Speier. This is July 28th, 2010, is when----
    Mr. Kutz. But when----
    Ms. Speier. --the workshop was.
    Mr. Kutz. --when we received it----
    Ms. Speier. My point is this: If you are really impartial, 
if you really are the third party, unbiased, then you would be 
searching for all the terms, not just Tea Party, not just 
Patriot. And you said in a letter to the Ways and Means 
Committee ranking member, you described the scope of your audit 
as follows: We reviewed all cases that the IRS identified as 
potential political cases and did not limit our audit to 
allegations related to the Tea Party.
    How can you make that statement when the only groups or 
only entities that were being searched for were Tea Party, 9/
12, Patriot?
    Mr. George. Because most of the complaints that we received 
were allegations that Tea Party, 9/12 and Patriots were being 
targeted, ma'am.
    Chairman Issa. Would the gentlelady yield for a question?
    Ms. Speier. I certainly will.
    Chairman Issa. Ms. Speier, I'm going to not be the devil's 
advocate, but maybe help you here. The--if they had searched a 
broader group and found what they were looking for, which would 
have been somebody talking about targeting people for their 
politics, that would have gone against what, I believe, has 
been said repeatedly all day on your side of the aisle, which 
was there is no evidence of people being targeted for their 
politics or by their politics. The more extensive a group, if 
we looked through every single email of every IRS employee, we 
might find somebody talking about Republican or Democratic 
activity.
    Ms. Speier. But that's--isn't that what you're all--what 
we're talking about here? We don't want them targeting one 
group or the other. I don't think anyone's----
    Chairman Issa. Well, but--but it wasn't about targeting 
groups. His search, if I understand correctly, this search was 
looking for whether there was political intent. And if they 
looked further and found political intent, it would fly in the 
face of what Mr. Cummings, Ms. Maloney and others have been 
saying. So although they could have done more, I will tell you 
from my personal observation, when we went to the IRS and began 
a joint investigation with the new commissioner and they were 
talking about search terms, they used these same four as their 
suggestion.
    Ms. Speier. But my point is only this, Mr. Chairman, in his 
letter to Mr. Levin, he said that we reviewed all cases that 
the IRS identified as potential political cases and did not 
limit our audit to allegations related to the Tea Party. This 
would suggest that, in fact, he did.
    Chairman Issa. No. I agree with the gentlelady that a more 
exhaustive search might find more. I only----
    Ms. Speier. It might find nothing.
    Chairman Issa. No. I understand it might find nothing if we 
went through every employee of the IRS, but one of our 
challenges, quite frankly, is that the inspector general works 
for and with the IRS. The IRS gave us these same terms when we 
were looking for things, so to the extent that you're unhappy 
with their search, and you're welcome to be unhappy, the odd 
thing is the IRS suggested these terms as the right terms. And 
so the inspector general's here, but when Danny Werfel was here 
yesterday, it would have been his employees that suggested 
these same four words.
    Ms. Speier. But, Mr. Chairman, the presumption of all of 
these hearings has been that the President is trying to take 
down his political enemies.
    Chairman Issa. Madam----
    Ms. Speier. I mean, that has been said over and over again.
    Chairman Issa. Madam, only on your side of the aisle.
    Ms. Speier. No, it hasn't. It was Mitch McConnell put out--
--
    Chairman Issa. He is not in this--on this committee.
    Ms. Speier. Well, that have been references made by any 
number of members on your side of the aisle, and if you would 
like me to get them out, I'll be happy to do so. But I think 
the point is, we don't want to see the IRS targeting any group, 
correct?
    Chairman Issa. And we saw them targeting----
    Ms. Speier. For political----
    Chairman Issa. --based on the key words Tea Party.
    Ms. Speier. Well, no, we saw them--they're targeting 
because they got an influx of 501(c)(4)s, and as a result of 
that they were trying to find a way to streamline the process. 
And as it turned out, it didn't get streamlined, it ended up 
taking more time.
    And the question for us is whether or not these entities 
are exclusively for social welfare purposes, which they are 
not, and that goes to the fact that the law says exclusively 
for social welfare purposes, and it was the IRS in a regulation 
that made it primarily, and now we're looking at these IRS 
agents and trying to--and expecting them to be able to 
determine if something's primarily or not. Unless you do a 
specific audit of every organization, you're never going to 
know if it's primarily for social welfare programs.
    Chairman Issa. Ms. Speier, I couldn't agree with you more 
that you'll never know unless you were to audit all of them. 
What I will find interesting is the number of 501(c)(4)s during 
the 2009-2010 period went down, and the special scrutiny of Tea 
Party groups began at application number one, and then went on 
with application number 10. By the time there was an influx, 
they were well along their targeting. Their targeting began at 
number one.
    Last time I checked, and I go back to Euclid for my 
mathematics, I'm that old, but the fact is one is such a lonely 
number that I wouldn't call it a rush or an influx or a large 
group. It just seems to be the loneliest number, and that's 
when this began, is with the first one. That's how this thing 
gets to be one, then five, then hundreds, and people realize 
that they began targeting and sending to Washington before 
there were a dozen applications.
    And so one of the challenges we face with Mr. Cummings, 
yourself, and myself, is we may find other misconduct at the 
IRS, and we are asking the IG to use his resources to help find 
them if they exist. But the key words, the BOLO and so on, 
predominantly began almost--early on, and they began with this 
Tea Party question.
    The gentlelady's and many of us question about what the 
right amount is to be a 501(c)(4) and whether, as the Acting 
Commissioner has said, 60 percent and you can self-declare. You 
can do 40 percent politics according to the Commissioner, self-
declare, and you're fine. That's the current decision by the 
Commissioner, and that's over and above the current law, which 
would still be 50 plus 1.
    So I'll work with the gentlelady on all kinds of reforms, 
but we're trying to stay focused. And I will say once again, we 
do not intend on going anywhere except the facts and the 
testimony lead, and currently there are no allegations by any 
of the witnesses about the President being involved. We are at 
the point of Lois Lerner and the Office of the Counsel. That's 
where we are in our investigation, and we'll continue, and 
you're welcome to come to the interviews as we----
    Ms. Speier. I would love to. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    Mr. Kutz. Mr. Chairman?
    Chairman Issa. We now go to the gentlelady--oh, yes, Mr. 
Kutz?
    Mr. Kutz. I just want to say, I mean, what Mr. George 
submitted at the beginning of the hearing is called the BOLO 
advocacy cases iterations. It was given to us May 17, 2012, and 
represented by the IRS to be the entire set of BOLOs that were 
used for political advocacy. We're not making this up. We've 
submitted it for the record.
    If IRS was doing something beyond that, they never made it 
apparent to us in an entire year of doing an audit. So I just 
want to make that clear. If other people were misused, we're 
very concerned about that, but IRS is the one that asserted to 
us in this email and a document Mr. George submitted for the 
record that the entire population of BOLOs used for political 
advocacy is on the document that says Tea Party until Lois 
Lerner changed it to advocacy in July of 2011.
    I just want to make that clear. That's a key piece of 
evidence for us. And they never changed their story for a year. 
When Ms. Lois Lerner came up May 10th, she didn't apologize for 
anything else except the evidence that she gave us. I just want 
to make that clear to everybody.
    Chairman Issa. Thank you.
    We now go to the gentlelady from New York, Mrs. Maloney.
    Mrs. Maloney. Thank you. I want to follow up on the 
gentlelady's mention of a screening workshop on July 28th which 
clearly states in their training manual, look for terms such as 
Republican/Democrat, look for donkey/elephant, look for Tea 
Party, and look for progressives. So they were training 
according to their own training manual that they were to look 
for progressives when they were looking for this, ``political 
activity.''
    So I think it's very clear that in their training manual 
they were saying look for political activity, Republican/
Democratic, conservative/liberal, and Tea Party and 
progressive. Would you--did you have this training manual? Did 
you ever see this training manual?
    Mr. George. Mrs. Maloney, we received that document last 
Tuesday.
    Mrs. Maloney. Okay.
    Mr. George. And this is over a year of conducting an audit, 
they withheld that document.
    Mrs. Maloney. But do you know why you never received this 
document?
    Mr. George. We do not, and it raises concerns about other 
documents that they may not have been sharing with us.
    Mrs. Maloney. But you also looked at, according to your 
testimony, over 5,500 emails, and did they not come across any 
claims relating in any way, shape, or form in all these 5,000 
emails to the training session of what they are to look for?
    Mr. George. As we weren't looking for that, that was not 
one of the search terms used to review the 5,000 emails.
    Mrs. Maloney. Well, would you agree, now that we have the 
training manual, that the IRS was training their employees to 
likewise look at progressives?
    Mr. George. We will have to review that and make that 
determination. That, unfortunately, would require us either to 
amend the audit, which is a possibility, or, as I've indicated 
before I think you arrived, I've instructed my staff to conduct 
an audit to see how the other Be On the Look Out, BOLO lists 
were utilized. Unfortunately, most of this has to wait until 
after we've completed our work with the FBI, with the 
Department of Justice Civil Rights Division, and ourselves for 
fear of interfering with that matter.
    Mrs. Maloney. Well, is it clear from this training manual 
that they were asking them to look at progressives, too?
    Mr. George. I am not sure. I really----
    Mrs. Maloney. Well, I think you should look at it and study 
it--it says progressive real big--and get back to us on whether 
you think the training manual included progressives.
    And, Mr. George, you've been in politics a long time. You 
know that there are Democrats and Republicans out there. You 
know that there's liberals and conservatives. It's hard for me 
to believe in my--I am--it's beyond belief that you would 
conduct an audit that only looked at Tea Party. That makes no 
sense whatsoever.
    I know that I wrote a letter of recommendation in support 
of you, even though you were Republican, because we worked 
together and I respected your work. Yet I cannot believe that 
you called for an audit that only looked at Tea Party when you 
know that there's a whole array of political activity. That's 
called targeting. That's called going after people.
    Some Republicans in their public statements, and I have a 
list of them, have tried to smear the President and said he did 
this and he did that. I would say that your audit tried to 
smear, to smear I don't know who, someone, or tried to blame 
someone by excluding a whole swath of the political 
establishment. I think an eighth-grade class that was asked to 
do an audit of what was happening politically for people asking 
for status would look at both sides. That's common sense.
    How in the world did you get to the point that you only 
looked at Tea Party when liberals and progressives and Occupy 
Wall Street and conservatives are just as active, if not more 
active, and would certainly be under consideration. That is 
just common plain sense. And I think that some of your 
statements have not been--it defies--it defies logic, it defies 
belief that you would so limit your statements and write to Mr. 
Levin and write to Mr. Connolly that of course no one was 
looking at any other area.
    It's common sense if they have certain regulations that 
they thought was the law--I think the law should be changed, I 
don't think there should be any exemption or tax deduction for 
political activity. But you know that there's political 
activity on both sides, right? Why wouldn't you look at both 
sides? That would be the fair thing to do. That would be the 
commonsense thing to do. That would be an appropriate audit. 
It's like saying look for wrongdoing in the bank but only look 
at overdraft fees. Everybody knows there are a lot, a whole 
swath of areas that you could look at.
    So to limit it defies logic, defies--I am mystified that a 
distinguished professional would put forth an audit that looks 
at only a very thin sliver when the training documents, when 
the letters, when plain common sense dictates that there is a 
whole array of political activity in our great country.
    Chairman Issa. I thank the gentlelady.
    And I know there wasn't a question there, but, Mr. George, 
I think you've got an answer.
    Mr. George. Yes, thank you, sir, I appreciate this.
    Mrs. Maloney, first of all, we received allegations from 
Members of Congress and from media reports about a particular 
activity that was occurring, all right? And it wasn't just Tea 
Parties, it was patriots, it was 9/12. So we were charged, you 
know, both through a request from Congress, as well as through 
our audit process, and this was in our audit plan, to look at 
how tax-exempt organizations were treated.
    Now, never once did I ever indicate that we would limit our 
review to just how these particular groups were treated.
    Mrs. Maloney. But you did.
    Mr. George. Well, ma'am, it takes a year. This audit took a 
year. And, yes, if you wanted us to wait another year before 
completing, you know, a fuller audit, we can, but that doesn't 
serve the American people, it doesn't serve the IRS well. Once 
we find the IRS is engaged in inappropriate behavior--and there 
are many examples of this--we alert them so that they can stem 
that behavior so that American taxpayers aren't unduly harmed 
and that the IRS can take corrective action.
    And so now I hope this discussion obviously will benefit 
any other group that might be inappropriately targeted, for 
lack of a better word, or treated by the Internal Revenue 
Service. And you would, I think, acknowledge, groups, 
501(c)(4)s, regardless of their political persuasion, should 
not have had to wait 3 years to get their status approved. That 
was wrong. I don't care what political party or political view 
they hold, Mrs. Maloney. I don't care. I do care that the IRS 
does the job it's supposed to do, and it didn't. It was gross 
mismanagement and it was poorly handled, and it was released 
before our report was----
    Mrs. Maloney. I would say that your audit was 
mismanagement. And I would say that it----
    Chairman Issa. The gentlelady's time has----
    Mrs. Maloney. --had the effect of smearing----
    Chairman Issa. The gentlelady's time has expired.
    Mrs. Maloney. Point of personal privilege to respond.
    Chairman Issa. To respond to, after your time is finished, 
to making another attack on the witness?
    Mrs. Maloney. No, no, no. To make a request of information 
for this committee that will help us get to the bottom of this.
    Chairman Issa. I look forward to seeing that in writing. 
Thank you.
    Mrs. Maloney. Okay.
    Chairman Issa. We now go to the gentleman from California, 
Mr. Cardenas.
    Mr. Cardenas. Thank you very much, Mr. Chairman.
    Mr. George, you testified earlier that your approach is to 
call balls and strikes. I'd like to ask that you do that right 
now. Mr. George, there has been a lot of discussion today about 
whether you found any White House involvement or political 
motivation in your report. I believe the statement on page 9 of 
your written testimony made clear that you found nothing of the 
kind--no documents, no witnesses, nothing. Is that right?
    Mr. George. That is correct.
    Mr. Cardenas. Okay. So given your clear statement, I'd like 
to ask you about a number of statements our Republican 
colleagues have made, especially since they are presumably 
based on your report, and I want to ask you whether you have 
identified any evidence to support their claims.
    First, on May 14, 2013, Chairman Issa went on national 
television and said this: ``This was the targeting of the 
President's political enemies effectively and lies about it 
during the election year so that it wasn't discovered until 
afterwards.''
    So my question is, during the course of your audit, have 
you identified any evidence whatsoever that the IRS was 
targeting the President's political enemies?
    Mr. George. While we don't have access to the information 
that the committee may have, our audit--and again please, sir, 
it needs to be stressed that it was an audit, it was nothing 
beyond that, although now there is an ongoing review, but our 
audit did not find anything.
    Mr. Cardenas. So, so far in the activities that you've been 
engaged in, you haven't found any evidence?
    Mr. George. That is correct.
    Mr. Cardenas. Okay.
    Mr. George. Well, as it related to the audit. We have an 
ongoing matter that we're working with the Justice Department 
as well as the FBI, and I am not privy to all of the 
information that they have gathered.
    Mr. Cardenas. So that's why I clarified my question. What 
you're privy to, the activities that you've engaged in, in your 
audit.
    Mr. George. Yes, I have not thus far been informed of 
anything that's untoward in that regard.
    Mr. Cardenas. All right. On June 3, 2013, House 
Appropriations Committee Chairman Hal Rogers stated, ``Of 
course the enemies list out of the White House that IRS was 
engaged in shutting down or trying to shut down the 
conservative political viewpoint across the country, an enemies 
list that rivals that of another President some time ago.''
    So my question is this: During the course of your audit 
have you identified any evidence relating to an enemies list 
that came out of the White House?
    Mr. George. No.
    Mr. Cardenas. Okay. On June 19, 2013, Senator Ted Cruz said 
this, ``President Obama needs to tell the truth. When Richard 
Nixon tried to use the IRS to target his political enemies it 
was wrong, and when the Obama administration does it, it's 
still wrong.''
    My question to you is this: During the course of your 
investigation, have you identified any evidence that the 
administration tried to use the IRS to target the President's 
political enemies?
    Mr. George. We have not found anything to that effect, sir.
    Mr. Cardenas. Okay. Senator Mitch McConnell recently issued 
a video paid for by his political campaign in which he said 
this, ``I don't know about you, but I think that the leader of 
the free world and his advisers have better things to do than 
dig through other people's tax returns. What they are trying to 
do is intimidate donors to outside groups that are critical of 
the administration.''
    The question is this: During the course of your 
investigation, have you identified any evidence that the 
President or any of his advisers were digging through other 
people's tax returns?
    Mr. George. Not about the President. And as to his other 
advisers, I'm not in a position to give you a definitive 
answer, but we found no evidence thus far.
    Mr. Cardenas. Okay. I think my point's clear, the 
Republicans are engaged in a sustained campaign to falsely 
smear the White House, and your report contradicts all of their 
unsubstantiated accusations so far.
    But also what I'd like to point out for the public, this is 
a public hearing of a committee of the United States Congress, 
and it appears that 298 applications were investigated and only 
72 were Tea Party applications. What I would prefer as a member 
of this committee, that I become to a committee and have 
witnesses and be asking them questions about all 298 
applications, not just the Tea Party applications, as the title 
of this committee hearing is ``The IRS' Systematic Delay and 
Scrutiny of Tea Party Applications.''
    Therefore, I state for the record, the only organization 
that clearly and blatantly focused on one type of application 
is this committee. The title of this hearing, I'll say again, 
is to investigate Tea Party applications, not all 298. And with 
all due respect, when you look at 72 applications out of 298, 
it is a small subset compared to the entire number of 
applications.
    So it's unfortunate that I'm called to a committee that I'm 
a member of and yet I'm to participate in some kind of bias 
toward what we should be asking.
    I yield back my time.
    Chairman Issa. Mr. George, do you want to respond to any of 
the numbers or characterizations?
    Mr. George. Well, Mr. Chairman, with all due respect, you 
know, again, and I alluded to this earlier----
    Chairman Issa. And please stay above the partisan portion 
of his statement if you don't mind.
    Mr. George. No, no, no, no. It's just that being an 
inspector general is one of the most difficult jobs in the 
Federal Government, okay? Because, believe me, when you're 
walking into the Secretary's office or the Deputy Secretary or 
whomever or the agency head, you are normally not coming in 
with good news. You're coming in with bad news. You're 
identifying ways that the function of the organization is not 
operating well or, if you're lucky, you're coming in with ways 
that they can operate in a better manner.
    And I have to admit, I am a little concerned that this type 
of forum could have a chilling effect on the operations of 
inspectors general. I mean, again, I have been around for, you 
know, a while, and so I've seen this before, but not to this 
extent. And believe me, we shall be issuing some reports 
shortly that's going to show a lot more of not the best 
behavior on the part of the Internal Revenue Service, just as 
we recently did with their $50, you know, million dollars' 
worth of conferences and a few other things that we have 
recently reported about.
    And so those reports will be coming out. They have no nexus 
to this at all. But I took an oath to uphold the law. I intend 
to do so as long as I'm in this position. And we have to rely 
on--believe me, when I was sitting in that back row as the 
staff director under Steve Horn, we relied tremendously on both 
GAO as well as IGs to help us do our jobs, and we could not 
with a staff of five people have done it on our own.
    So, believe me, I know the role of the IG. You know, Mr. 
Horn, we never treated an IG office like this. I mean, if it 
were an allegation of personal wrongdoing on my behalf or on my 
organization's behalf, that's one thing, but to just try to 
suggest that an audit could have been done differently, you 
know, this is--you know, this is unprecedented, sir, too. This 
is unprecedented.
    Chairman Issa. I thank you. And I remember the late Steve 
Horn. I served with him. There was nobody who worked harder and 
looked more for the facts. And, quite frankly, Professor Horn 
came to Congress with almost no politics, and we on the 
Republican side always asked couldn't he be more Republican, 
and the answer is, I can't be more honest. And I miss--I miss 
Steve.
    It's now the ranking member's opportunity to close.
    Mr. Cummings. You know, I was feeling pretty good until 
your last statement. I want you to be very clear, Mr. George. 
You call balls and strikes. We call balls and strikes, too. The 
700,000 people who sent me to this Congress did not send me 
here just to sit and listen. They didn't do that. And if I have 
questions, I'm going to ask them. The chairman, when he has 
questions, he asks. When he has questions, where there's a 
question of whether we can get a document, he asks. He 
represents 700,000 people, I represent 700,000 people.
    And I will--I--when I put up my hand to protect the 
American people and uphold the Constitution every 2 years, I 
mean it. I don't care whether the person is Republican, 
Democrat, whatever. That's my job. That's my duty.
    And so, you know, the mere fact that you were asked some 
questions about a report that even you say, looking at it in 
retrospect, you might have done things a little different, you 
know, hello, welcome to the club.
    And so, you know, I am--I've got to tell you, I'm glad you 
came. I'm glad you brought your two associates. And I think you 
all have done a very good job of answering the questions. But 
give us some credit, too. On almost every single show I have 
been on they have asked me, do you trust the IG? And you can go 
back and check, and every single time I said, I want to get 
information.
    I'm a lawyer. I am trained to do this. Not necessarily to 
attack anybody, but get answers. And any IG, if they present to 
me something and I'm wondering, well, did I miss something or 
is everything not here, I'm going to ask the questions.
    And as I said, I don't have a monopoly on this one. Mr. 
Issa would do the same thing. And so folks come and said, oh, 
you know, the IG, we should never ask, you know, an IG, don't 
ask him a question, don't question. No, no, no, no, no, no, no, 
no. That's not how it operates.
    And then there's another piece of this. I believe that, 
this committee must be about not only oversight, but reform, 
and in order to reform you've got to have good information. 
It's got to be transparent. It's got to be complete, the whole 
truth, nothing but the truth, so help me God. So the mere fact 
that a question is asked, please, don't get insulted. I think 
you should be grateful that we asked you to come back to 
clarify, and you did it.
    And so just like Chairman Issa asked you a minute ago about 
how you looked at your role, well guess what? And you gave a 
great answer, and I was pleased to hear it, but guess what? I 
expect the young lady who was here, Ms. Hofacre, and Mr. Hull, 
who is now retired, I believe that they're the same way. I've 
actually said it over and over again that I think that what--as 
I read the transcripts, it seems that people came in, they were 
hard-working Americans, giving their blood, sweat, and tears, 
not making a whole lot of money, put their party hats to the 
side and walked in there and tried to obey the law as best they 
could. Then that means that maybe if the law was not right or 
we need to change something, maybe we need to do that. You said 
that there were management problems. Maybe we need to do that.
    And so nobody is trying to attack you or anybody else. Just 
trying to get to the facts. This is our watch. This is it. I've 
said over and over again, we don't know how long we are going 
to be here. But in this time, in this period, this is our watch 
to be the very best that we can be, and we are better than what 
we have been so far. You said it in so many words just a moment 
ago: The IRS can be better.
    And what I'm doing, Mr. Chairman, as I close, I am reaching 
out trying to get to that better world, to that more perfect 
IRS. That's what this is all about. Nothing less. Nothing less, 
nothing more. It is simply that. And I want--I do not want to 
see the IRS destroyed. I want it to be the very best that it 
can be. And so with your help and the help of God we will 
accomplish that.
    Thank you, Mr. Chairman.
    Chairman Issa. Thank you, Mr. Cummings.
    I think Mr. Cummings is right, we don't know how long we're 
going to be here. I lost one of my friends, Gideon Goren, today 
suddenly after only 80 years on this Earth and 50 good years of 
marriage.
    So without further lamenting some parts of the day, I have 
just a closing question for you, Mr. George. With what you and 
your organization know today, do you know that there was 
special scrutiny on organizations lumped together as the term 
Tea Party, but obviously 9/12 and the other search terms, do 
you know there was special scrutiny of those organizations and 
that it was, in your opinion, inappropriate in--at least in the 
time of delay?
    Mr. George. Yes.
    Chairman Issa. And as of what you know today, from what 
you've been able to ascertain, I know it's ongoing, do you know 
of similar treatment of specific scrutiny because of their key 
name and delay for groups other than those? In other words, do 
you know of progressive groups that as of today were 
scrutinized for being progressive advocacy groups and delayed?
    Mr. Kutz. We don't know that. The 202 names, as we 
mentioned, we don't know who was what, okay?
    Chairman Issa. Okay. So as this committee continues to 
look, we will close today knowing that Tea Party groups, 
patriot groups, 9/12 groups are held to have been--held up to 
special scrutiny here in Washington, delay, including perhaps 
the office of Lois Lerner and certainly individuals in the 
Office of the Counsel caused an unreasonable delay to Tea Party 
groups, and to this day we know of no specific equivalent among 
groups, specifically left-wing groups, progressives, and so on.
    That is what we have learned today. We certainly charge you 
as our representatives with eyes and ears where we cannot look, 
to continue looking, to use all your resources, and to leverage 
other resources at the IRS to find this and other areas within 
the IRS.
    Now, many people have characterized today what I believe 
and what I say. In closing, I believe that, in fact, Mr. 
George, you and your team have done an excellent job. When I 
look at the speed of your work, I wish for faster. When I look 
at the quality of your work, I certainly want to send you back 
to do more in many areas.
    But I certainly know this: The IRS is an agency in crisis. 
They cannot get their procurement right. We've seen that. They 
cannot get their conference spending, at least in the past, 
anywhere under control, and they used funds which were 
inappropriate to fund those conferences.
    This special scrutiny raises major concerns about whether 
or not they even understand the criteria under the law of 
501(c)(4)s in what they asked and how they asked, including 
asking for donor information, including asking for the 
specifics of political activity rather than the balance of 
eligibility.
    That and other areas give you, your three and others not 
here today, a huge job, and I for one have confidence that you 
will do that job, as all of our IGs work hard to do. And this 
committee will continue, as it did with Steve Horn, to leverage 
heavily the hard work and the 12,000 or so men and women that 
work for IGs.
    So I want to thank you. I want to make one closing 
statement, and that is, hopefully we will stop asking people in 
public or using in public what their political persuasion is 
unless we're speaking to activities that they did, that those 
activities may compromise their objectivity. Otherwise every 
American has a right to belong to or not belong to any party, 
to believe what they want to believe, and we want them to be 
able to do that and exercise that.
    So, again, I'm going to be the first to say, every one of 
you, I'd like to get more out of you. I encourage you to work 
both jointly and, quite frankly, I encourage you to meet with 
the ranking member's staff any time you want, huddle with them, 
listen to their concerns, and do the same, because this 
committee charges you often from one side or the other, but we 
charge knowing that your work is nonpartisan, your results are 
given to both of us on a consistent basis, and by the way, also 
to other committees of jurisdiction, without us asking. You 
make the decision of who needs to know, and we appreciate that. 
And with that----
    Mr. Cummings. Will the gentleman yield----
    Chairman Issa. Of course.
    Mr. Cummings. --for just one question?
    Chairman Issa. Of course.
    Mr. Cummings. My staff tells me that in the interviews your 
staff always asks the party affiliation. Can we then stop 
within the interviews asking for party affiliation?
    Chairman Issa. I appreciate that, and it's a fair question. 
I believe that my--they have asked routinely whether somebody 
describes or not, they've asked about political contributions 
and even volunteering. I have instructed my people not to use 
that as criteria for decision process.
    We do have some people who actually campaigned for a 
particular candidate and made contributions, but we have not 
and did not use it today, I don't believe I heard it one time. 
You know, I believe interviews need to ask all the questions 
extensively, if appropriate, and we did do that. Candidly, it's 
the reason I was happy not to hear it asked by my side of the 
aisle today.
    And with that, I thank the ranking member. This has been a 
long day for you. You were here for the first panel, and I know 
you could have accomplished a lot of what we're asking for 
today if we let you have this day in the office.
    And with that we stand adjourned.
    [Whereupon, at 5:23 p.m., the committee was adjourned.]


                                APPENDIX

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