Congressional Republicans are pointing to new evidence that the IRS chief counsel, a position appointed by President Obama, was directly involved in seeking more information about the political activities of Tea Party groups.
The president appoints two IRS officials, and the chief counsel is one of them. Republican congressional investigators uncovered the new revelation during the closed-door testimony of Michael Seto, who was in charge of a unit that advised front-line agents on processing applications for tax exemptions.
Excerpts of Seto's testimony, which the House Ways and Means Committee released before a Thursday hearing on IRS targeting, said the instruction to send Tea Party applications to the chief counsel's office came from Lois Lerner, who formerly directed the IRS's exempt organization's office.
Lerner has pleaded the Fifth Amendment against self-incrimination and is refusing to testify before Congress. Seto said Lerner sent him an e-mail in 2010 explaining that she thought that specific Tea Party cases had to "go through multi-tier review, and they will eventually have to go ... to the chief counsel's office."
Carter Hull, a now-retired lawyer who worked for the IRS for 48 years and was in Seto's unit, told the oversight committee that he was "taken aback" when the chief counsel's office sent two Tea Party cases back to him after several months.
"I hadn't had the case for a while," he said. "I couldn't ask if I didn't have the case."
Democrats say the select excerpts of the Seto interview paint the wrong picture. Rep. Elijah Cummings, D-Md., accused Republicans of cherry-picking Seto's account to present a skewed view of events.
In his opening statement at the House Oversight and Government Reform Committee hearing Thursday, Cummings said Republicans are on a witch hunt and are straining to try to find any link to the White House or President Obama.
"Since the chairman and other Republicans first began making these accusations, the committee has identified no evidence whosoever - documentary, testimonial or otherwise — to substantiate them," he said. "... This is unsubstantiated nonsense. It undermines the committee's integrity and every member of this body's integrity and it destroys the committee's credibility."
Other IRS officials have said it was routine to send tough cases to the chief counsel for extra deliberations and scrutiny. The chief counsel's office employees 1,600 people.
During testimony before the committee, Hull said he was told to forward documents to an adviser for Lerner and then later was directed to send the documents to the Office of Chief Counsel for review. The chief counsel is William Wilkins, a former Senate Finance Committee staffer in the 1980s who Obama appointed to the position in 2009.
At an August 2011 meeting, Hull said, an official in the chief counsel's office told him that additional scrutiny was needed of the Tea Party applicants Hull was looking into, and that he should send them another letter requesting additional information.
Tea Party and other conservative groups have complained about lengthy delays in the IRS determining whether they should be granted tax-exempt status and have specifically cited these letters.
Several times during his testimony, Hull called the additional layer of review "unusual" — at one point saying he could not recall anything similar during his 48 years at the IRS. There were long delays, he said, because he was waiting for guidance from the chief counsel's office.
He then testified that applications were eventually taken out of his control and forwarded on for "further review," a step he said was "rare."
Republican lawmakers on Thursday said Hull told them in closed session that he tried to continue working on the Tea Party cases he was given, but Lerner said the applications needed to go through the chief counsel's office. It was the first time in his career that he was told to send applications to Lerner's senior adviser, who was expected to send them to the chief counsel's office, Hull said.
The committee also heard from Elizabeth Hofacre, an IRS employee in the Cincinnati office who was told to review dozens of Tea Party applications under Hull's management before she asked to be transferred to another office because she felt like she had become a "dumping ground" for the conservative organizations and was frustrated by delays in approving the applications ordered by superiors.
Hofacre testified that she was "deeply offended" after White House spokesman Jay Carney blamed IRS "line people in Cincinnati" for the targeting of Tea Party and other conservative groups for special tax scrutiny and former IRS Commissioner Steven Miller blamed the targeting scandal on a handful of "rogue" line agents in the Ohio office.
She said she was stunned and felt like she was being scapegoated.
"Personally, I felt like it was a nuclear strike," she said. "I felt they were blaming us."