'Is this still America?' Congressional hearing turns into IRS smackdown as disgraced former commissioner and Treasury Inspector General face tea-party scandal questions

Appointee in charge of screening tax-exempt applications is now in charge of implementing new Obamacare taxes

Ousted Steven Miller defends himself, insists that targeting of conservatives was 'foolish mistakes,' not political gamesmanship

May 10 leak that launched the scandal was 'prepared,' Miller acknowledges

Former IRS commissioner testified last year that there was 'absolutely no targeting' going on

Democrats on the panel blame 2010 'Citizens United' Supreme Court ruling for creating a flood of tax-exemption applications during an election year



The IRS under the Obama administration painted targets on the backs of conservatives beginning in 2010, and ousted acting IRS commissioner Steven Miller apologized to the House Ways and Means Committee on Friday. But members on both sides of the aisle were furious, and castigated him for the mismanagement and political gamesmanship the IRS engaged in on his watch.

Texas Republican congressman Kevin Brady had the harshest criticism for Miller.



‘Is this still America?' he asked him.

'Is this government so drunk on power that it would turn its full force, its full might, to harass, and intimidate, and threaten an average American who only wants her voice, their voices heard?’

'The American public deserves better,' Miller agreed. But both he and J. Russell George, the Treasury Department's Inspector General for Tax Administration, insisted that no IRS employees engaged in political witch-hunting.

SCROLL DOWN FOR VIDEO

The House Ways and Means Committee held the first congressional hearing on the Internal Revenue Service targeting conservative applicants for tax-exempt status with special scrutiny based on their politics. J. Russell George (L) and Steven Miller (R) were called on the carpet

House Ways and Means Committee Chairman Rep. Dave Camp castigated the former IRS acting commissioner for presiding over a corrupt system that played political favorites

George oversaw the year-long internal probe that ended in a report released Wednesday. It concluded that the agency used 'inappropriate criteria' in selecting tax-exemption applications for closer scrutiny, but did not find any wrongdoing on the part of senior-level IRS officials.

Miller concurred with that finding, blaming the problem instead on 'foolish mistakes' while affirming that partisanship 'has no place at the IRS.'

President Barack Obama announced his removal on Wednesday, as a scandal unfolded involving the IRS targeting hundreds of right-wing organizations for intense scrutiny based on keywords like 'tea party' or 'patriots' in their names.



Miller wrote to IRS employees, however, that he was leaving at the end of his scheduled term in early June.

Ultimately, he conceded on Friday, he agreed to step down because responsibility for the IRS's activities 'stops at my desk.'



Michigan Democratic Rep. Sander Levin is the most senior Ways and Means Democrat to side with Republicans against IRS corruption

Committee chair Dave Camp, a Michigan Republican, stared down Miller, saying that 'this systemic abuse cannot be fixed with just one resignation.'

'And as much as I expect more people need to go, the reality is this is not a personnel problem,' Camp maintained. 'This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers.'

Sander Levin, the panel's ranking Democrat, said the IRS and its employees 'have completely failed the American people' by 'singling out organizations for review based on their name or political views, rather than their activity.'

'All of us are angry about this on behalf of the nation,' the left-leaning Michigan congressman said.

Lois Lerner is the civil servant who heads up the IRS division in charge of evaluating charitable and other nonprofit organizations. Levin called for her head.

Lois Lerner, director of the IRS's Exempt Organizations section, told a legal conference on May 10 that her agency's Inspector General would soon publish a report about the unfair targeting of tea party groups for special tax scrutiny. Her disclosure, which Steven Miller conceded Friday was 'prepared,' launched the scandal

'Ms. Lerner should be relieved of her duties.' he said.



We must seek the truth, not political gain.'

In what Miller called 'a prepared Q-and-A' on May 10, Lerner told an American Bar Association conference about a pending IRS Inspector General report examining the targeting of conservative groups inside the IRS's Exempt Organizations section.

That admission started the media feeding frenzy that has spiraled into a full-blown scandal. The acknowledgement that Lerner went to the event with the intention of publicly disclosing the IG report's existence raised eyebrows on the congressional panel.

Illinois Republican Rep. Peter Roskam quizzed Miller about a phone conversation he said he had with Lerner about the planned disclosure, which Miller said was intended to coincide with a disclosure to Congress.

He agreed with Roskam, however, that Congress wasn't told at the same time a question was 'planted' at the bar association conference.



'We called to try to get on the calendar' of the Ways and Means Committee,' Miller said.

'You called to try to get on the calendar?' Roskam asked, incredulous. 'Is that all you've got?'



'It's the truth,' Miller responded.

Under questioning from California Republican Rep. Devin Nunes, Miller said he would not commit to giving Congress his notes, phone records, and other evidence of conversations with Lerner.

Nunes reminded him that Congress could, and might, subpoena them.



'IS THIS STILL AMERICA?' Texas Rep. Kevin Brady slammed former IRS acting commissioner Steve Miller for presiding over the political persecution of a constituent whose tax-exempt application for her tea party group was subject to nearly 100 lengthy, intrusive questions

Lerner's superior, Sarah Hall Ingram, was the most senior political appointee in charge of exempt organizations reviews during the years when the IRS was targeting right-wing groups. This year the Obama administration has elevated her to a position of authority over the tax implementation of the Affordable Care Act, the president's signature health care overhaul.

Miller called her 'a superb civil servant,' and said he promoted her to her current position.



In a flurry of press releases, broadcast statements and tweets, conservatives have lashed out at Ingram, suggesting a level of corruption on her part that could compromise the fair and impartial implementation of Obamacare.



Ingram 'allowed and possibly encouraged the outrageous and discriminatory tactics toward Tea Party Patriots based on political ideology, clearly violating her supposedly unbiased office,' said Jenny Beth Martin, the group's national coordinator.



'We ... do not trust anyone who was involved in targeting tea party groups to administer the Affordable Health Care Act in a fair and equal manner,' Martin added.

'We certainly do not trust Sarah Hall Ingram to be anywhere near our incredibly sensitive health care decisions. It appears the administration has rewarded her for allowing the discriminatory actions rather than disciplining her. She must be terminated or resign immediately for her disgraceful actions.'



New York Democratic Rep. Charles Rangel complained that the Supreme Court's 'Citizens United' ruling created an environment ripe for abuse of political donations, making the IRS's job impossible to do fairly

In a stunning flashback moment, Louisiana Republican Rep. Charles Boustany played a video clip showing former IRS Commissioner Douglas Shulman testifying before the House Ways and Means Subcommittee on Oversight in March 2012.

'Can you give us assurances that the IRS is not targeting particular groups based on political leanings?' Boustany, the subcommittee's chairman, asked Shulman then.



'There's absolutely no targeting,' the then-commissioner responded in 2012. 'This is the kind of back-and-forth that happens when people apply for 501(c)(4) status.'

Asked Friday if this was a lie, Miller said 'It was incorrect.'

'But whether or not it was untruthful --' he continued, without reaching a conclusion.



'Why did you mislead Congress and the American people on this?' Boustany asked.

'Congressman, I did not mislead Congress or the American people,' Miller responded.

Washington Democrat Jim McDermott, a reliable liberal partisan, acknowledged that 'the IRS stiff-armed us, basically, at best,' in past testimony, but defended the agency''s behavior.

Tax 'examiners took a shortcut,' in the face of a flood of new applications for tax-exempt status, he said, 'which they deeply regret'

Still, he conceded that it was wrong to treat groups differently because of their political positions.

'As much as I dislike the right,' he said, 'I think it's wrong to be un-evenhanded in government application' of laws and regulations.

Wisconsin Republican Rep. Paul Ryan slammed Miller for failing to tell the Ways and Means Committee what he knew during a previous hearing

Paul Ryan, the Republicans' vice presidential nominee in 2012, slammed Miller for what he said was less-than-truthful testimony when he appeared before a subcommittee last year. Although he had been briefed by then about the problems with tax-exempt applications from tea party groups, he said nothing.

Miller hid material facts from Congress, Ryan said.

'How can we conclude that you did not mislead this committee?'

Miller fired back. 'I stand by my answers,' he said, saying that the word '"harassment" implies political motivation' on the part of IRS employees.

'There was no political motivation,' he insisted.

The Tea Party Patriots and other conservative groups provided a powerful rallying force during the 2010 midterm elections. It was around the same time that the Obama administration's IRS began targeting such groups that applied for tax-exempt nonprofit status

Washington Republican Rep. Dave Reichert picked up that thread when it was his turn to ask questions.

'Do you not believe it's your job to provide us with the information that you knew?' he demanded.

'You're a law-enforcement agency, for crying out loud.'

'I answered all questions truthfully,' Miller responded.

'You're not going to cooperate,' said Reichert, dismissing him and moving on to question George.

The hearing is the first in what will likely be a series of inquisitions from Congress about the IRS scandal, just one of the three hanging over the Obama administration.



The House Oversight and Government Reform Committee will hold its own hearing on May 22, taking testimony from Lois Lerner, former IRS Commissioner Shulman, and Treasury Deputy Secretary Neal Wolin.

Barack Obama (R) and Turkish Prime Minister Recep Erdogan (L) held a joint news conference in the White House Rose Garden on Thursday, but the president was hammered on his domestic scandals. Asked if anyone in the White House knew about the IRS's targeting of right-wing groups before the White House Counsel was notified around April 22, Obama would only say that he personally had no knowledge of it

New York Democrat Charles Rangel took issue with the Supreme Court's 2010 'Citizens United v. Federal Election Commission' ruling, which he said created en environment that resulted in the IRS's malfeasance.

The underlying problem, he said, was a resulting law 'almost written for abuse,' as it prohibits Congress from interfering with 501(c)(4) groups' political spending.



The Citizens United Ruling is generally credited with creating a flood of applications for tax-exempt status with the IRS, including hundreds from conservative groups hoping to capitalize on their newfound power to influence national politics with untraceable dollars.

'This is not "Democrat or Republican,"' Range said. 'It relates to the integrity of the government.'

'We're on the same side as far as determining how this happened.'

Rangel told Miller that he wanted the 'tens of thousands of IRS employees [to] have the stigma of corruption taken away from them.'

