Lois Lerner Hard Drive a Central Figure as Issa Probes IRS

(Bloomberg) A central character in the 14-month dispute in Congress over the Internal Revenue Service’s scrutiny of Tea Party groups is a computer hard drive.

The device in question belonged to Lois Lerner, the former IRS official accused by Republicans of giving extra scrutiny to small-government groups seeking tax-exempt status. The IRS says a catastrophic failure—the crash of her computer hard drive followed by the recycling of backup tapes—means two years’ worth of her e-mails were wiped out.

Republicans don’t buy it. They argue that in an age where it seems like every keystroke lives forever, it’s too much to believe that these particular e-mails, from this particular person, simply vanished.

“I believe Lois Lerner is hiding something,” Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, said today on Fox News. “I believe the Justice Department, the IRS and the White House are interested in her succeeding in hiding what she’s hiding, which is her targeting of conservative groups based on their ideology.”

Issa will bring IRS Commissioner John Koskinen in before lawmakers today for the second time in four days.

The tax agency said last week that the computer failure meant it couldn’t recover many of Lerner’s e-mails from 2009 to 2011. Lerner, who retired last year, oversaw employees who determined whether groups seeking nonprofit status were too political.

Issa’s Questions
Issa sent Koskinen a list of questions yesterday about the technology problems and when Koskinen learned about them. The commissioner, who took over the IRS last year, said earlier this year that the agency would produce all of Lerner’s e-mails.

The IRS has produced thousands of her e-mails, including some from the two-year period in question, by retrieving them from other people on the messages.

“It’s feasible that she loses her hard drive,” said Karen Evans, administrator for information technology at the Office of Management and Budget from 2003 to 2009. “It is feasible that the server would be cycled through.”

Retrieving e-mail is an important function that private-sector companies have fallen short on, too, Evans said.

“Most operations people have plans in place that you can recover e-mail because you don’t want everybody screaming and yelling at you,” she said. “It’s a thing that you try to avoid.”

Header Information
There may still be a way to find more of Lerner’s e-mails if the IRS has retained e-mail transfer data showing the header information, Evans said. That would allow the tax agency to know who Lerner was corresponding with.

Starting in 2010, the IRS gave Tea Party groups seeking tax-exempt status extra scrutiny based solely on their names, causing the groups to experience delays.

Agency officials have admitted those actions while insisting the IRS didn’t do so for political reasons.

Groups organized under section 501(c)(4) of the tax code, which are allowed to keep their donors secret, are required to operate “exclusively” for the promotion of social welfare. The IRS has interpreted that to mean they can’t have politics as their primary purpose, a rule that has led to disputes about the meaning of “politics” and “primary.”

So far, the investigations have found little, if any, direct evidence of political motivation or involvement from officials outside the IRS.

Criteria Confusion
Instead, documents released so far show that lower-level workers were confused about what criteria they should use to sort and assess applications. They show that IRS executives tried to respond to concerns from Democratic lawmakers, among others, that groups were using 501(c)(4) status to circumvent campaign-finance disclosure laws.

At a June 20 hearing by the House Ways and Means Committee, Representative Paul Ryan challenged Koskinen’s credibility about the missing e-mails.

“I don’t believe you,” said Ryan, a Wisconsin Republican. “This is incredible.”

“I have a long career; that’s the first time anybody has said they do not believe me,” Koskinen responded.

“I don’t believe you,” Ryan said.

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Tax practice Finance
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