Republicans have called for Steven Miller's resignation. | John Shinkle/POLITICO Acting IRS chief knew in 2012

The Internal Revenue Service’s acting commissioner first learned about the agency’s targeting of conservative political groups more than a year ago, the agency revealed Monday, even as President Barack Obama called the extra scrutiny “outrageous,” and promised those responsible would be “held accountable.”

“You don’t want the IRS ever being perceived to be biased and anything less than neutral in terms of how they operate,” Obama said at a joint press conference with British Prime Minister David Cameron. “I’ve got no patience with it, I will not tolerate it and we will make sure we find out exactly what happened on this.”


Obama’s comments were his first on the situation since the IRS’s scrutiny of groups with “tea party” and “patriot” in their names came to light on Friday. The IRS also targeted groups working to make “America a better place to live” and ones focused on government spending and debt, according to a draft report from the agency’s investigator general.

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Acting IRS Commissioner Steve Miller was told in May 2012 that the Internal Revenue Service was targeting conservative groups for extra review, POLITICO has learned.

The tax exempt and government entities office informed Miller, then the deputy commissioner for services and enforcement, about the “improperly identified” applications on May 3, 2012, according to the IRS.

This detail from the agency clarifies when senior IRS officials first learned about the program that singled our conservative groups that included the words “tea party” or “patriot” in their tax documents.

Two months before Miller was informed, former IRS Commissioner Doug Shulman told Ways and Means lawmakers that the IRS was not giving extra review based on groups’ politics. The IRS has maintained that Shulman did not know details of the program when he testified.

Miller’s position at the time would have been only one level below Shulman.

Miller has been at the IRS for more than two decades and once headed the exemption organizations office currently under review, but he transferred departments before the program began in 2010.

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The president said he learned of the IRS misbehavior in the news reports that emerged Friday, though White House press secretary Jay Carney later told reporters the White House counsel’s office was informed of the report during the last full week of April, but not told of its findings.

“If, in fact, IRS personnel engaged in the kind of practices that have been reported on and were intentionally targeting conservative groups, then that is outrageous, and there is no place for it, and they have to be held fully accountable,” Obama said Monday.

The president’s comments came as congressional leaders signaled plans to probe the issue, tea party groups threatened to to sue the IRS, and fresh charges emerged that the agency’s misconduct may have been broader than originally reported.

The National Organization for Marriage accused the IRS Monday of leaking its confidential tax return to its opponents at the Human Rights Campaign. “What NOM has experienced suggests that problems at the IRS are potentially far more serious than even these latest revelations reveal,” said Brian Brown, the group’s president.

The Koch brothers-backed Americans for Prosperity claimed Monday that it was indirectly targeted in 2010 when, the group alleges, some tea party organizations received letters from the IRS asking if they were in any way connected to AFP.

Meanwhile, some tea party groups publicly weighed plans to take the agency to court. “We are looking at it pretty seriously,” said Dan Becker, a lawyer who represents a half-dozen conservative groups targeted by the IRS including Combat Veterans Training Group and TheTeaParty.net. “Given the sheer scope of maleficence at the IRS, there may be a legal recourse.”

On Capitol Hill, the House Ways and Means Committee has set a hearing for Friday morning and the House Oversight and Reform Committee also plans a hearing within the next two weeks. Following the reports of Miller’s knowledge of the situation in May 2012, Committee Chairman Dave Camp (R-Mich.) called it “almost inconceivable to imagine that top officials at the IRS knew conservative groups were being targeted but chose to willfully mislead the Committee’s investigation into this practice…

“An apology is not sufficient, there have been enough excuses and delays, and now it is time for the IRS to answer to the American people,” Camp said in a Monday night statement.

Finance Committee Chairman Max Baucus (D-Mont.) has pledged a “full investigation into this matter,” and Senate Majority Leader Harry Reid (D-Nev.) said he has “full confidence” in Baucus and his committee.

Sen. Marco Rubio (R-Fla.) filed an amendment Monday afternoon to the Senate’s Water Resources Development Act that would toughen penalties against the IRS for “misconduct against taxpayers” to include mandatory termination and criminal liability. He also plans to introduce the measure as a separate bill on Tuesday, but its attachment to the water bill — which has bipartisan support — could offer a quicker path forward.

The agency has maintained that while its actions were inappropriate, laws weren’t broken.

The targeting of conservative groups began as early as March 2010, according to the draft report from the Treasury Inspector General for Tax Administration. The IRS official in charge of nonprofits, Lois Lerner, said Friday that the decision to include “tea party” and “patriot” as search terms was made by low-level field reporters in Cincinnati.

But a few months after the targeting program began, the report says, “management” from the agency’s Determinations Unit “requested its specialists to be on the lookout for tea party applications.”

The report appears to contradict Lerner’s implication that she first began inquiring with her staff during the run-up to November’s presidential election, when she read about conservative groups complaining that the agency was in some cases asking for donor or member lists. The report says Lerner learned about the program at a briefing on June 29, 2011, when she raised concerns about the language used to flag groups for additional scrutiny during that meeting.

In January 2012, the criterion was changed to “political action-type organizations involved in limiting/expanding government, educating on the Constitution and Bill of Rights, social economic reform/movement.” This change was put in place because the field officers felt previous search terms were “too generic,” the report says.

In May 2012, the agency informed targeted groups that it would destroy “some of the inappropriately collected information.”

The investigation found no evidence that then-IRS Commissioner Douglas Shulman knew of the targeting when he adamantly denied at a congressional hearing in March 2012 that the program existed. Senate Minority Leader Mitch McConnell (R-Ky.) told the National Review on Monday that the agency’s acting commissioner, Steven Miller, should resign his post. Other Republican lawmakers have said the same.

Lauren French, Jake Sherman, Kevin Robillard and Tarini Parti contributed to this report.