WASHINGTON — The Treasury Department’s inspector general told senior Treasury officials in June 2012 he was auditing the Internal Revenue Service’s screening of politically active organizations seeking tax exemptions, disclosing for the first time on Friday that Obama administration officials were aware of the matter during the presidential campaign year.
At the first Congressional hearing into the I.R.S. scandal, J. Russell George, the Treasury inspector general for tax administration, told members of the House Ways and Means Committee that he informed the Treasury’s general counsel of his audit on June 4, and Deputy Treasury Secretary Neal Wolin “shortly thereafter.”
It remained unclear how much the disclosure would affect the broader debate over the I.R.S.'s problems. Complaints from Tea Party groups that the I.R.S. was singling them out became public in 2012, through media accounts.
Mr. George told Treasury officials about the allegation as part of a routine briefing about ongoing audits he would be conducting in the coming year, and he did not tell the officials of his conclusions that the targeting had been improper, he said.
Still, the inspector general’s testimony will most likely fuel efforts by Congressional Republicans to show that Obama administration officials knew of efforts to single out conservative groups applying for tax-exempt status for additional scrutiny, but did not reveal that knowledge during President Obama’s re-election campaign.
Representative Paul D. Ryan, Republican of Wisconsin, who joined the Republican ticket as the vice-presidential candidate later in the year, said, “That raises a big question.”
Representative Dave Camp of Michigan, the House Ways and Means chairman, said in opening the hearing, “This appears to be just the latest example of a culture of cover-ups — and political intimidation — in this administration. It seems like the truth is hidden from the American people just long enough to make it through an election.”
The hearing quickly turned into partisan jousting, with House Republicans pressing to expand the inquiry to other tax misdeeds closer to the White House, while Democrats tried to keep the focus narrow and under the purview of an I.R.S. chief appointed by President George W. Bush.
Steven T. Miller, the acting I.R.S. commissioner, who has resigned, called the agency’s actions “obnoxious,” but told the House Ways and Means Committee they were not motivated by partisanship. And in testy exchanges, he said he had not misled Congress, even though he did not divulge the targeting efforts of a Cincinnati unit examining 70,000 applications for tax exemption.
He called the group’s centralization of applications from groups with names that included the words “Tea Party” or “patriots” simply “foolish mistakes” that “were made by people trying to be more efficient in their workload selection.”
With two additional hearings already scheduled for next week, it is clear the focus of Congressional inquires will extend well beyond the selection of conservative groups for special scrutiny of their tax-exemption applications.
Mr. Camp pressed Mr. Miller and Mr. George on the releasing of tax information on Koch Industries, the giant family business of the conservative benefactors Charles and David Koch, by a former White House economist, Austan Goolsbee. He also hit on the publication of donor lists for the National Organization for Marriage, which opposes same-sex unions, and the release of confidential applications for tax-exempt status to the investigative reporting outfit ProPublica.
The incidents of releases of confidential tax information were referred to the inspector general for investigation, but were found to be inadvertent, the witnesses said.
When Republicans asked Mr. Miller whether the targeting of conservative groups was divulged to Obama administration officials outside the I.R.S., Mr. Miller said “that would be a violation of law.”
“I would be shocked” if that occurred, he said.
Mr. Miller did concede that the I.R.S.'s apology for targeting was prompted by a question planted by the agency last Friday at an American Bar Association meeting. At that meeting, Lois Lerner, the head of the I.R.S.'s division overseeing tax-exempt organizations, was asked about an inquiry of the targeting issue, eliciting an apology that quickly leaked out of the closed-door session. The I.R.S. then scrambled to issue a formal release on the issue.