(Bloomberg) A partisan divide is developing on how U.S. lawmakers view Internal Revenue Service actions, with Republicans seeing intimidation of their allies and Democrats citing agency mistakes and mismanagement.

The IRS has a culture of targeting some organizations that went beyond the extra scrutiny given to Tea Party groups, Representative Dave Camp, chairman of the House Ways and Means Committee, said as he opened a panel hearing on the issue today.

Suggesting a pattern, Camp listed gift-tax audits of donors to a group that supported the war in Iraq, the release of confidential information from other groups, and extensive questions to Republican-leaning organizations. The Michigan Republican cited a “culture of political intimidation and discrimination,” and said after the hearing that the committee plans to interview more IRS employees.

“We’re really just beginning,” Camp said.

He also said he didn’t think it was appropriate to draw conclusions from the interviews conducted so far. Representative Darrell Issa, a California Republican and chairman of the House Oversight and Government Reform Committee, has used excerpts from those interviews to claim the extra scrutiny of some groups was “coordinated in all likelihood” from Washington.

Today’s hearing signaled the two parties’ different views of investigations into the tax agency over the past month. Republicans say the IRS demonstrated bias against small-government groups, while Democrats say the controversy resulted from a series of errors and flawed laws and rules.

Tax Break
Representative Jim McDermott, a Washington Democrat, said Republicans are looking to create a conspiracy that doesn’t exist.

Speaking to members of the Tea Party groups who testified today, he said, “None of your organizations were kept from organizing or silenced. We’re talking about whether or not the American taxpayers will subsidize your work. We’re talking about a tax break.”

Among the witnesses at today’s hearing was John Eastman, chairman of the National Organization for Marriage. The group’s political opponents received its confidential information, including a donor list, that contained markings suggesting it had come from the IRS. That can’t be inadvertent and it has chilled donors, he said.

“You can imagine our shock and disgust over this,” he said. He said he has been “stonewalled” in attempts to get information from the IRS or its inspector general about the document release.

Eastman’s group opposes same-sex marriage.

Inadvertent Release
The IRS said the inspector general’s investigation found that the release of information was inadvertent.

As chairman of the tax-writing Ways and Means committee, Camp has the authority to examine otherwise private taxpayer information that would help get to the facts of the marriage group’s case. He said after the hearing that he would do so at an appropriate time.

Separately, the inspector general released a report today that said the IRS spent $4 million on a 2010 conference for employees in Anaheim, California, including $17,000 for a speaker who painted pictures of former basketball star Michael Jordan and U2 singer Bono to motivate employees.

The tax agency spent about $49 million on 225 conferences from fiscal 2010 to 2012, according to the report. Two top IRS officials stayed in presidential suites that typically cost between $1,499 and $3,500 a night in Anaheim, the most expensive of the conferences, the report said.

The House Committee on Oversight and Government Reform plans a June 6 hearing on the agency’s spending.

Second Hearing
Also testifying to the Ways and Means Committee today was Sue Martinek, president of the Coalition for Life of Iowa, which she said was asked by IRS officials not to protest at Planned Parenthood as a condition of receiving tax-exempt status.

The hearing is the Ways and Means panel’s second since the IRS revealed May 10 that it had selected some groups with “Tea Party” or “patriot” in their names for tougher scrutiny of their applications for tax-exempt status.

Representative Sander Levin, the top Ways and Means Democrat, said he thought the IRS request made to Martinek’s anti-abortion group was “worse than inappropriate.”

“I do think it’s our obligation to get the facts and not deal in conjecture,” said Levin, of Michigan.
Six congressional committees and the Justice Department are investigating the IRS.

Three-Year Wait
Dianne Belsom, president of the Laurens County Tea Party in South Carolina, said she is still waiting to hear from the IRS on her group’s application for tax-exempt status after answering repeated and extensive questionnaires from the agency.

“Nearly three years of waiting for an answer is totally unacceptable,” Belsom said. “The IRS needs to be fully investigated and held accountable for its incompetence, harassment and targeting of conservative groups.”

Becky Gerritson, president of the Wetumpka Tea Party in Alabama, which has been approved for tax-exempt status, said she didn’t want to disclose lists of volunteers to the IRS.

“The questions were chilling,” she said. “I was shocked that I was being asked those questions.”

—With assistance from Kathleen Miller in Washington. Editors: Michael Shepard, Don Frederick

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