Grassley, during his tenure as top Republican on the Senate Finance Committee, zeroed in on abuses by charities and other nonprofit groups improperly claiming tax-exempt status under Lerner, and he spearheaded a 2006 change in federal law making it harder for organizations to improperly claim the credit.
Grassley and Lerner were no strangers to each other, and it’s one of the reasons Republicans fear Lerner’s push to audit Grassley might have been politically motivated.
“If she was interested in political payback, it would be absurd,” Sen. Rob Portman, R-Ohio, a member of the Senate Finance panel, told the Washington Examiner. “What Senator Grassley was trying to do all of those years was to make sure that people who had tax-exempt status deserved it. He was working with the IRS in a way, not against them.”
Congressional staff who worked under Grassley during his 2001-10 tenure as top Republican on the Senate Finance panel say he conducted vigorous oversight of the IRS Tax Exempt division, which Lerner was appointed to run in 2005.
“This isn't random,” said Dean Zerbe, a tax lawyer who helped Grassley investigate tax-exempt groups and reform the law governing them. “This is going after the senator most active in conducting serious reviews of charitable organizations as well as the IRS work in this area."
Grassley conducted several hearings examining tax-exempt organizations, and he led the push in 2006 to reform the way some nonprofits are granted tax-exempt status. The resulting law has required the IRS, under Lerner, to revoke the tax-exempt status of dozens of illegitimate charities.
Grassley was also one of a dozen senators who sent a letter to the IRS in March 2012 questioning whether Tea Party groups seeking tax-exempt status were being unfairly scrutinized.
In December 2012, Lerner mistakenly received an invitation to an event that was meant for Grassley. The event officials offered to pay for the senator's wife to attend the event.
Lerner asked a co-worker, “Looks like they were inappropriately offering to pay for his wife. Should we refer to Exam?”
Both Lerner and Grassley were invited to speak at the event, which was redacted from an email chain made public by Republicans on the House Ways and Means Committee. Lerner said in another email that she was not eager “to be on stage with Grassley” at the particular event, which was not described in the email.
Ways and Means Committee Chairman Dave Camp, R-Mich., said he suspected Lerner's motives to refer Grassley for an audit were political.
"I think clearly we have problems with the IRS' role in politicizing that agency when a Republican senator, simply because they received an invite, is referred for a tax audit,” Camp said.
The Senate Finance Committee is investigating the matter, along with allegations that the IRS improperly targeted conservative groups seeking tax-exempt status. Lerner was placed on administrative leave by the IRS last year.
Grassley, who still serves on Senate Finance, told the Examiner he can’t comment on Lerner’s suggestion that the IRS audit him.
He held up a piece of paper to reporters, outlining several points on the matter, among them,”It’s pretty alarming how a clerical mix-up might lead to extra IRS scrutiny for a taxpayer, no matter who it is. It just fuels real concern about the political targeting by senior IRS officials. There needs to be accountability. Not just for me.”