New IRS chief: Trust in the agency ‘has been broken’

Updated
Acting IRS Commissioner Danny Werfel testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial...
Acting IRS Commissioner Danny Werfel testifies on Capitol Hill in Washington, Monday, June 3, 2013, before the House Appropriations subcommittee on Financial...
AP Photo/Charles Dharapak

The new acting head of the Internal Revenue Service is promising to restore Americans’ faith in the integrity of the scandal-tarnished federal agency.

Daniel Werfel delivered his first testimony to Congress on Monday. It’s the fourth hearing on the tax collection agency’s targeting of conservative groups and the first of three Congressional hearings slated for this week.

Werfel–who has been on the jobs for less than two weeks–told a House Appropriations subcommittee in charge of overseeing financial services that his primary mission is to restore trust in the IRS and that “has to start with a recognition that the trust has been violated” and “broken.”

He called the inspector general’s findings “significant and alarming” but said he is confident the problems can be corrected.

Werfel, who is conducting a 30-day review of the IRS, said a new team would focus on clearing the backlog of applications from groups seeking tax exempt status, in addition to looking into if additional “personnel actions” were necessary. He also said he was conducting a broader review of IRS operations.

“We owe it to the American public to use this moment as an opportunity to take a hard look internally at the IRS and see where other deficiencies or risks may exist and take action to address them,” he told the panel.

Obama–who has said he was unaware of the IRS’s targeting of Tea Party groups–tapped Werfel to repair the agency’s image. Werfel was previously the controller of the White House Office of Management and Budget.

Werfel also addressed the report by the Treasury Inspector General for Tax Administration that will be released Tuesday, which shows the agency spent nearly $50 million on more than 200 lavish employee conferences from 2010 to 2012. That includes shelling out $4 million for a conference for 2,600 mangers in Anaheim, Calif., three years ago—where employees stayed in suites that currently cost between $1,500 and $3,500 a night. The agency also spent $50,000 to produce two videos shown at one of the events, including one where employees learned the “Cupid shuffle” dance.

Werfel said he has called for a review into the conference and will take measures to correct the practice. In an earlier statement, Werfel said “this conference is an unfortunate vestige from a prior era. While there was legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred.”

The hearing comes as House Oversight and Government Reform Committee Chairman Darrell Issa is arguing that the Obama administration was involved in the IRS scandal. Over the weekend, the Republican lawmaker from California released partial transcripts of interviews with IRS employees from Cincinnati, insisting they proved a link.

In one part of the interview, the IRS employee—when asked if a supervisor gave any indication why a search for conservative groups was needed—said, “He told me that Washington D.C. wanted some cases.” In another part, the unidentified employee says he/she was “taking all my direction” from the EO Technical,” which is the IRS Exempt Organization office in D.C.

Democratic Rep. Elijah Cummings of Maryland, who sits on the panel, released a statement ripping Issa’s claims Monday.

“So far, no witnesses who have appeared before the Committee have identified any IRS official in Washington D.C. who directed employees in Cincinnati to use ‘Tea Party’ or similar terms to screen applicants for extra scrutiny,” Cummings said. “Chairman Issa’s reckless statements today are inconsistent with the findings of the Inspector General, who spent more than a year conducting his investigation.”

New IRS chief: Trust in the agency ‘has been broken’

Updated