The applications of some tea-party groups for tax exemption are still languishing at the Internal Revenue Service, where they have been reviewed by the chief counsel’s office and by a senior adviser to Lois Lerner, the agency’s former director of Exempt Organizations, according to the testimony of three Internal Revenue Services attorneys involved in their processing. The IRS’s chief counsel, William Wilkins, is one of two political appointees at the agency. His office demanded information about the political activity of tea-party groups “right before the  election period,” and to this day has yet to make a determination whether the groups qualify for tax exemption, according to one IRS attorney.
The explosive testimony comes from Carter Hull, a recently retired IRS attorney who was charged with providing guidance to the Cincinnati agent processing tea-party applications; his superviser, Ronald Shoemaker; and Michael Seto, the manager of the Exempt Organizations Technical unit made up of tax lawyers and based in Washington, D.C.
Hull began reviewing tea-party applications in April 2010. According to a partial transcript of his interview with Oversight Committee investigators, he felt he had enough information to make a determination on the applications, but sometime in the winter of 2010–2011, the senior advisor to Lois Lerner told him the IRS chief counsel’s office needed to review the applications nonetheless. These were “test” applications whose treatment would provide guidance for agents processing the bulk of the tea-party applications.
Seto, Hull’s boss, told investigators applications were sent to the chief counsel’s office after Lerner “sent me an e-mail saying that . . . these cases need to go through multi-tier review and they will eventually have to go [through her staff] and the chief counsel’s office.” Lerner’s senior adviser told Hull the applications were to go “to the IRS chief counsel.”
Months later, in August 2011, the chief counsel’s office held a meeting with Hull in which officials indicated they would need updated information from the tea-party groups before they could make a determination. “They had it for a while and the information wasn’t as current as it should be,” Hull said, adding that the request took him aback. Hull’s superviser, Ronald Shoemaker, told investigators that the chief counsel’s office sought information about the groups’ political activity “right before the  election period” and, to his knowledge, has to this day — over three years since the applications were filed — failed to make a determination about whether they qualified for tax exemption.
Excerpts of the testimony provided by Hull, Shoemaker, and Seto came in a letter sent from Oversight Committee chairman Darrell Issa and Ways and Means Committee chairman Dave Camp, along with their ranking members, to acting IRS commissioner Danny Werfel demanding documents from the chief counsel’s office and any communications between the chief counsel’s office and the White House.
The IRS’s “involvement and demands for information about political activity during the 2010 election cycle appears to have caused systematic delays in the processing of tea-party applications,” Issa said Wednesday.
Hull will appear before the Oversight Committee on Thursday as it holds another hearing on the IRS’s targeting of tea-party groups. Elizabeth Hofacre, the Cincinnati agent charged with processing tea-party applications, as well as the Treasury Department inspector general J. Russell George and two of his TIGTA colleagues, will also testify.