Lois Lerner ultimately rejected a request to step down. | John Shinkle/POLITICO, AP Photos What's next for the IRS?

In the two weeks since the news surfaced that the Internal Revenue Service wrongly targeted conservative groups applying for a tax exemption, the debacle has unfolded at a breathless pace — complete with resignations, three congressional hearings and the transformation of civil servants into household names.

Lois Lerner, the embattled IRS official, provided many of the more bizarre twists and turns by defiantly proclaiming her innocence at a congressional hearing before invoking her Fifth Amendment right against self-incrimination and ultimately rejecting a request from her new boss to step down.


But now the flood of scandal news is poised to slow dramatically.

( Also on POLITICO: IRS official defies Washington)

Congress has hauled virtually every conceivable witness before several committees to testify on their role in the debacle. And lawmakers are heading out of town for a week — meaning Republicans risk losing a news cycle that has been unusually kind to them as the IRS scandal collided with other Washington meltdowns.

The GOP — and many Democrats — insist the investigation is only getting started. But where can the saga go from here?

Lerner drama

The most immediate question is the fate of Lois Lerner, who — until Thursday — was the director of the IRS division that processes applications for various tax exemptions. She triggered the scandal by acknowledging the targeting program at a legal conference on May 10.

Despite calls from members of both parties to step down, she has little incentive to do so while she’s on administrative leave for the next month. She’ll still collect a paycheck and may hope that the scandal will die down as June drags on.

( PHOTOS: 8 key players in IRS scandal story)

The only problem: She’s almost certain to be back on Capitol Hill soon after Congress returns from its Memorial Day break.

House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) argues that by delivering an opening statement before his panel, Lerner waived her constitutional right to avoid self-incrimination.

Issa told reporters on Thursday that he’s consulting the House general counsel and parliamentarian along with outside lawyers. He hopes to have the issue “resolved” soon after lawmakers return to Washington in June.

( PHOTOS: 10 slams on the IRS)

Daniel Werfel, the new acting IRS commissioner who asked for Lerner’s resignation this week, could fire her but that could create a bigger headache. It’s difficult to fire a civil service employee because the termination can be appealed to the Merit Systems Protection Board — a process that can take over a year.

Punishment

The two resignations that have already come from the IRS — combined with Lerner’s discipline and the many ongoing investigations into the scandal — isn’t cutting it for some lawmakers.

House Speaker John Boehner has said some IRS officials should wind up in jail.

Some members of Congress have floated the idea that Lerner and former IRS Commissioner Doug Shulman could face criminal charges if they lied to Congress. It is unclear whether they will pursue the accusations as a contempt of Congress charge, a rare move that could lead to jail time.

Werfel could try to ease the pressure by forcing more agency staffers to resign.

And lawmakers could revive legislation to give agencies the option of suspending high-level employees like Lerner without pay. The House easily passed the bill last year in the wake of a scandal over a lavish General Services Administration conference in Las Vegas. Lawmakers were enraged that one of the GSA employees was placed on paid leave but the bill never made it to the Senate floor.

Meanwhile, lawsuits are flying. The National Organization for Marriage is suing the IRS for improperly releasing its confidential tax return information. And Citizens for Responsibility and Ethics in Washington, a government watchdog group, is suing the agency for improperly implementing rules governing the acceptable level of political activity at nonprofits.

Document dump

Members themselves are partially to blame for the slower pace about to kick in. The three committees investigating the misconduct — House Ways and Means, House Oversight and Government Reform and Senate Finance — have buried the agency under mountains of questions and document requests.

The IRS and the inspector general are working on responses — but it’s going to take longer than anyone would like. That could mean that it will be several more weeks until new revelations on the scandal come to light.

And when the documents are ready, they could come all at once.

The agency has already missed a deadline set by House Ways and Means Committee Chairman Dave Camp and Rep. Sander Levin, the panel’s top Democrat. The pair sent the agency a list of questions on more than a dozen topics as well as a request for all documents related to the audit. Those responses were supposed to be returned by May 21 but only a few responses have trickled in, according to committee aides.

More hearings

Congress has heard from an inspector general, disgraced IRS officials and a senior member of the Obama administration.

Next up, the conservative targets.

Issa reached an agreement on Wednesday with Maryland Rep. Elijah Cummings, the top Democrat on the Oversight Committee, to bring groups targeted by the IRS to testify about their experience. That process could start as early as June, according to sources who asked to remain anonymous.

Meanwhile, Issa and Rep. Charles Boustany, the chairman of the Ways and Means oversight subcommittee, said panel staffers have begun privately interviewing IRS employees both in Washington and the Cincinnati field office where the misconduct originated — a process that will continue in the coming weeks.

“We’re coordinating with the Oversight and Government Reform Committee to do transcript interviews with all of the Cincinnati employees,” Boustany said.

More grumbling

Not all members are willing to wait for more deadlines and delays.

Several Republicans are agitating for Congress to appoint a special prosecutor to investigate whether criminal charges are in order.

“I think a special prosecutor, as long as you have access to grand jury power and subpoena power, yes that’s the way you investigate crimes,” said Rep. Trey Gowdy (R-S.C.). “Congress is not well-equipped to investigate crimes.”

Even Democratic Rep. Stephen Lynch of Massachusetts warned of the prospect of a special prosecutor if the IRS doesn’t cooperate with Congress.

But Issa — no stranger to tough talk — is dismissing such talk. He’s opting to keep the scandal inside the committees already tasked with the investigation.

“This is what our committee does, investigate and propose reforms,” Issa said. “We do it well.”

Reform talk

As the dust settles, expect to hear more talk from both Congress and the White House about what might be done to make good on pledges to never allow the IRS to become embroiled in such a scandal again.

Camp told reporters on Thursday that Congress needs to change the way the IRS does business.

“Clearly, at first look, I think giving the IRS less discretion is going to be important to do,” Camp told reporters on Thursday.

For Issa, the ultimate goal of his hearings will be to identify areas where the IRS needs to be overhauled.

“Our challenge will be to get reform,” Issa said. “That will be our exit strategy.”