Sen. Max Baucus, D-Mont., left, and Rep. Dave Camp, R-Mich., launched an effort to overhaul the nation's tax code last month. (H. Darr Beiser / USA TODAY)
WASHINGTON — The Tea Party targeting scandal shows the need for a major shake-up of the Internal Revenue Service, the chairmen of Congress’s two tax-writing committees told reporters Friday morning.
“There does need to be a fundamental restructuring,” said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. “There are real problems here. The Cincinnati office is almost cut off from D.C. Not entirely, but it’s tough. You have 90,000 employees, it’s tough to manage them all.”
The IRS Cincinnati office is at the epicenter of the scandal because that’s where every application for tax-exempt status is first processed. Transcripts of interviews with IRS employees there show that low-level employees first raised questions about Tea Party groups seeking tax-exempt status in 2010, but that Washington supervisors micromanaged the process of those applications. The Tea Party groups were channeled into a separate, more stringent review process that delayed their approvals for months or years.
An inspector general’s report last month found that when top IRS officials learned of the targeting in 2011, they failed to immediately stop it or report it to Congress.
Rep. Dave Camp, R-Mich., said that top leadership of the IRS was “so out of touch, almost rising to the level of wrongdoing.”
“This looks like at best a complete management failure and at worst intentional,” said Camp, chairman of the House Ways & Means Committee. “We don’t know that yet. We really need to know all the facts.”
Baucus and Camp spoke to reporters Friday at a breakfast hosted by the Christian Science Monitor. The topic was their joint efforts at tax reform, which have been bolstered by the revelation last month that the IRS held up the tax-exempt applications of Tea Party groups while approving dozens of liberal groups.
But both chairmen said they’re still in the early stages of investigating the Tea Party affair.
“This is a painstaking process,” Camp said. “This is really more of a white-collar approach, where you need documents to prove things.”
The House Oversight Committee, chaired by Rep. Darrell Issa, R-Calif., is also investigating, and has already interviewed at least five employees in the Cincinnati office. But the chairmen of the tax-writing committees have additional legal powers to view taxpayer information protected by privacy laws. Both chairmen said they’re using that power.
“My style is, let’s get the facts first,” Baucus said.
Gregory Korte writes for USA TODAY.