(Bloomberg) House Oversight Committee Chairman Darrell Issa sent a subpoena for Internal Revenue Service documents to the Treasury Secretary, saying he thinks the agency’s chief counsel’s office is “compromised.”

The IRS hasn’t been forthcoming in responding to committee requests for documents related to the agency’s scrutiny of Tea Party groups seeking tax exemptions, Issa, a California Republican, said today. He spoke at a hearing of a subcommittee of his panel in Washington and issued the subpoena afterward.

“You are slow-rolling us,” Issa told acting IRS Commissioner Danny Werfel.

“That’s not true,” Werfel responded.

Issa’s move escalates the confrontation between Republicans and the administration over the IRS, which apologized in May for applying tougher scrutiny to Tea Party groups applying for tax- exempt status.

As Congress leaves for a five-week recess, Issa rejects President Barack Obama’s attempt to label the matter a “phony” scandal and insists that incomplete responses make it impossible to determine what happened and who was responsible.

At least four IRS officials have lost their positions. Seven congressional committees have opened inquiries into the IRS, requesting internal documents that would help explain how and why the agency scrutinized Tea Party groups.

“I’ve asked you for information; you’re not forthcoming,” Issa told Werfel. “The office of chief counsel, a politically appointed office, has been compromised.”

‘Timely Fashion’
“Our expectation is that Treasury Department will take over the delivery of documents in a timely fashion,” Issa said. He asked Werfel to remove the IRS counsel’s office from any “decision making” related to the inquiry.

The IRS is housed within the Treasury Department. In a statement, Treasury said it is reviewing the subpoena and is committed to cooperating with the committee’s inquiry.

“This is not about obstruction,” Werfel said. “This is about offering as much information as we can.”

In a letter today, Werfel said the agency is “fully committed to transparency and cooperation” with the congressional inquiries. He wrote that 70 attorneys are reviewing documents full time and producing documents weekly.

“By any measure, this is an enormous undertaking for the IRS,” he wrote to Issa. “We are aggressively working to share, gather and provide information requested by your committee and others, and we continue to do so.”

Progressive Groups
Also during today’s hearing, Representative Elijah Cummings, the top Democrat on Issa’s committee, said he was “disappointed” that Inspector General J. Russell George’s office was “blocking” information about IRS inquiries into progressive groups.

“If we do not receive a satisfactory response from the IG by next week, I would ask that you go ahead, Mr. Werfel, and produce these documents,” said Cummings of Maryland.

Democrats say revelations about IRS scrutiny of progressive groups cast doubt on the idea that only Republican-leaning groups drew extra attention from the agency.

“Our job is to ensure that all applications for tax-exempt status are treated fairly, whether they are conservative, progressive or in between,” Cummings said.

The leaders of the House Ways and Means Committee, who can obtain confidential taxpayer information without redactions, wrote a letter to the IRS last week complaining about the pace of document production.

3 Percent
“We only have about 3 percent of the documents that we’ve asked for,” Representative Dave Camp, chairman of the House Ways and Means Committee, said today on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

“What we really need,” Camp said, “are the e-mails. We don’t have those yet.”

In a joint statement today, the leaders of the Senate Finance Committee said they want the IRS to be more cooperative in releasing documents. Senators Max Baucus, a Montana Democrat, and Orrin Hatch, a Utah Republican, said their investigators have interviewed 14 IRS employees and reviewed more than 21,000 pages of documents.

The Finance Committee panel has held one hearing on the IRS investigation and has taken a much lower public profile on the issue than Issa and Camp.

“We are not prepared to make any final conclusions until our investigation is completed,” Baucus and Hatch said. “Doing so would undermine our ability to get to the truth and effectively address the problems within the IRS that led to these abusive practices.”

Search Terms
In his letter, Werfel estimated that there may be about 1.64 million documents to review, many of which won’t be relevant. He said the IRS is switching to more focused search terms to speed up the process.

Issa has been investigating the potential involvement of William Wilkins, the IRS chief counsel and one of two political appointees at the tax agency. Documents and testimony so far have shown only that Wilkins’s office—which has 1,600 lawyers—was involved, not Wilkins himself.

In his letter, Werfel wrote that a search of Wilkins’s e-mails found seven responsive documents, six of which were sent to Issa’s staff. The other, Werfel wrote, was a copy of the inspector general’s report containing taxpayer information.

“Further, we have offered to have Mr. Wilkins participate in an interview with your staff, and they have indicated they prefer not to interview him at this time,” Werfel wrote.

Interview Timing
Frederick Hill, a spokesman for Issa, said in an email that the IRS has acknowledged that it hasn’t delivered relevant emails from Wilkins.

“The committee has told the IRS that it wants to interview Mr. Wilkins and will do so within the framework of the current process that began with employees in the Cincinnati office and has been working up toward more senior officials,” Hill said.

The Justice Department also has started a criminal investigation.

Obama yesterday nominated John Koskinen to become IRS comissioner. If confirmed by the Senate, he would replace Werfel, who became acting IRS leader after Obama forced out the previous acting commissioner, Steven Miller.

—With assistance from Kasia Klimasinska in Washington. Editors: Jodi Schneider, Laurie Asseo

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access