IRS faces more heat from watchdog report amid Tea Party fracas

Fri May 31, 2013 7:45pm EDT
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By Kim Dixon

WASHINGTON (Reuters) - The new chief of the Internal Revenue Service conceded on Friday there was "inappropriate" spending on a 2010 agency conference, a subject set to be the focus of one of three U.S. congressional hearings next week at which the IRS will likely face more criticism.

The IRS is already embroiled in a major political scandal over extra scrutiny it gave to conservative groups seeking tax-free status, and Republicans in the House of Representatives are likely to keep the White House on the defensive over the agency's actions.

Acting IRS Commissioner Danny Werfel said expenses associated with a conference held three years ago "should not have occurred."

The conference will be the focus of a report set for release on Tuesday from an IRS watchdog, Werfel said in a statement.

"This conference is an unfortunate vestige from a prior era. While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate," said Werfel, named acting IRS commissioner two weeks ago.

The IRS has been under a spotlight for three weeks since a mid-level administrator publicly apologized at a conference for the extra scrutiny given to applications for tax-exempt status filed by conservative political groups.

The controversy that followed led to the ousting by President Barack Obama of the agency's top executive and an FBI investigation, and has become a major distraction for the White House.

The Treasury Inspector General for Tax Administration, a watchdog agency that monitors the IRS, is expected to issue a long-planned report on the agency's spending on conferences, travel and awards, next week.   Continued...

Committee Chairman U.S. Representative Darrell Issa (R-CA) holds a House Oversight and Government Reform Committee hearing on alleged targeting of political groups seeking tax-exempt status from by the Internal Revenue Service (IRS), on Capitol Hill in Washington, May 22, 2013. REUTERS/Jonathan Ernst