IRS replaces official in tea party scandal

WASHINGTON — Moving quickly to stem a raging controversy, the new acting head of the Internal Revenue Service started cleaning house Thursday by replacing the supervisor who oversaw agents involved in targeting tea party groups.

A day after she refused to answer questions at a congressional hearing, Lois Lerner was placed on administrative leave, according to congressional sources.

Sen. Chuck Grassley of Iowa, a senior Republican on the Senate Finance Committee, said Lerner was asked to resign but refused, so she was placed on leave. An IRS spokeswoman said the agency could not comment on Lerner’s status because it was a private personnel matter.

Danny Werfel, the agency’s new acting commissioner, told IRS employees in an email that he had selected a new acting head of the division, staying within the IRS to find new leadership.

Ken Corbin, a 27-year IRS veteran, will be the new acting director of the agency’s exempt organizations division. Corbin currently is a deputy director in the wage and investment division, where he oversees 17,000 workers responsible for processing 172 million individual and business tax returns, Werfel said.

Werfel’s email Thursday made no mention of Lerner. But congressional aides who were briefed on the matter confirmed that Lerner was placed on paid administrative leave. The aides spoke on condition of anonymity because a personnel matter was involved.

“From all accounts so far, the IRS acting commissioner was on solid ground to ask for her resignation,” Grassley said in a statement. “The IRS owes it to taxpayers to resolve her situation quickly. The agency needs to move on to fix the conditions that led to the targeting debacle. She shouldn’t be in limbo indefinitely on the taxpayers’ dime.”

Lerner’s lawyer, William W. Taylor III, did not immediately respond to requests for comment.

Lerner is the IRS official who first publicly disclosed on May 10 that IRS agents had been targeting tea party and other conservative groups for additional scrutiny when they applied for tax-exempt status. At the time she apologized on behalf of the IRS, but it wasn’t enough to stop a firestorm of criticism from the White House and Congress.

If Lerner, a career civil servant, is dismissed she would become the third IRS official to lose their job in the scandal. Last week, President Barack Obama forced acting IRS Commissioner Steven Miller to resign, replacing him with Werfel, a former White House budget official who started at the IRS on Wednesday.

Also last week, Joseph Grant, one of Miller’s top deputies, announced plans to retire June 3, according to an internal IRS memo. Grant had just been named commissioner of the agency’s tax exempt and government entities division, which includes the agents that targeted tea party groups. Grant had been the acting head of the division since 2010.

Lerner provided one of the most electric moments since the controversy erupted when she unwaveringly — but briefly — defended herself before the House Oversight and Government Reform Committee on Wednesday.

“I have not done anything wrong,” she told the committee, reading from a written statement. “I have not broken any laws, I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee.”

Then, she refused to answer lawmakers’ questions, invoking her constitutional right against self-incrimination. A few minutes later, she was excused. As she boarded an elevator, several of the men who escorted her briefly jostled with TV camera operators who were trying to film her.

Lerner learned in June 2011 that agents were singling out groups with “Tea Party” and “Patriots” in their applications for tax-exempt status, according to a report by the agency’s inspector general. Lerner ordered agents to scrap the criteria immediately, but later they evolved to include groups that promoted the Constitution and the Bill of Rights.

It finally stopped in May 2012, when top agency officials say they found out and ordered agents to adopt appropriate criteria for determining whether tax-exempt groups were overly political.

Former IRS Commissioner Douglas Shulman told two congressional committees this week that he first learned in the spring of 2012 that conservative groups had been improperly singled out for additional scrutiny. However, after learning that the practice had stopped and that the inspector general was investigating, Shulman said he didn’t tell anyone in the Treasury Department or the White House about it. The IRS is part of the Treasury Department.

Shulman, who was appointed by President George W. Bush, left office in November, when his five-year term expired.

On Thursday, the two leaders of the Senate Investigations subcommittee accused Lerner of misleading committee staff just a few days before it she made the controversy public.

Subcommittee Chairman Carl Levin, D-Mich., and the top Republican member, Arizona Sen. John McCain, called on the IRS to immediately suspend Lois Lerner from her job as director of the IRS division that handles applications for tax-exempt status.

On April 30, committee staff interviewed Lerner and seven of her colleagues for six hours, the senators said in a letter to Werfel.

“That interview covered, among other topics, how the IRS determines which groups to review, what actions are taken in connection with the IRS reviews, and how the laws and regulations are used to examine those groups,” the senators wrote. “Ms. Lerner failed to disclose the internal controversy.”

Lerner, 62, is an attorney who joined the IRS in 2001. In her brief appearance Wednesday, she expressed pride in her 34-year career in federal government, which has included work at the Justice Department and Federal Election Commission. AT the IRS, she oversaw 900 workers and a budget approaching $100 million.

Corbin, the new acting director of exempt organizations, began his IRS career in Atlanta in 1986, Werfel said.

“Ken is a proven leader during challenging times. He has strong management experience inside the IRS handling a wide range of processing issues and compliance topics as well as taxpayer service areas,” Werfel said. “Combined with his track record of leading large work groups, these skills make him an ideal choice to help lead the Exempt Organizations area through this difficult period.”

Rep. Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, praised the selection of Corbin.

“In naming Ken Corbin as acting director to replace Lois Lerner, the administration has taken a strong step to address serious mistakes made by the IRS Exempt Organization Division,” Levin said. “This and further corrective action are vital in restoring the confidence of the American people.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Olivia Vanni / The Herald 
The Mukilteo Lighthouse. Built in 1906, it’s one of the most iconic landmarks in Snohomish County.
The Mukilteo Lighthouse. Built in 1906, it’s one of the most iconic landmarks in Snohomish County. (Olivia Vanni / The Herald)
Mukilteo mayor vetoes council-approved sales tax

The tax would have helped pay for transportation infrastructure, but was also set to give Mukilteo the highest sales tax rate in the state.

Marysville Mayor Jon Nehring gives the state of the city address at the Marysville Civic Center on Wednesday, Jan. 31, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Marysville council approves interim middle housing law

The council passed the regulations to prevent a state model code from taking effect by default. It expects to approve final rules by October.

x
State audit takes issue with Edmonds COVID grant monitoring

The audit report covered 2023 and is the third since 2020 that found similar issues with COVID-19 recovery grant documentation.

Bothell
Bothell man pleads guilty to sexual abuse of Marysville middle schoolers

The man allegedly sexually assaulted three students in exchange for vapes and edibles in 2022. His sentencing is set for Aug. 29.

Larsen talks proposed Medicaid cuts during Compass Health stop in Everett

Compass Health plans to open its new behavioral health center in August. Nearly all of the nonprofit’s patients rely on Medicaid.

Guns for sale at Caso’s Gun-A-Rama in Jersey City, New Jersey, which has been open since 1967. (Photo by Aristide Economopoulos/New Jersey Monitor)
After suing, WA gets carveout from Trump administration plan to return gun conversion devices

The Trump administration has agreed to not distribute devices that turn semi-automatic… Continue reading

The Wild Horse Wind and Solar Facility about 16 miles east of Ellensburg in central Washington is part of Puget Sound Energy’s clean energy portfolio. (Courtesy of Puget Sound Energy)
Megabill’s elimination of tax credits for clean energy projects could cost WA $8.7 billion

Washington households could see electricity costs increase $115 per year by 2029; 21,800 workers could lose their jobs by 2030, analysts say.

Community members gather for the dedication of the Oso Landslide Memorial following the ten-year remembrance of the slide on Friday, March 22, 2024, at the Oso Landslide Memorial in Oso, Washington. (Ryan Berry / The Herald)
The Daily Herald garners 6 awards from regional journalism competition

The awards recognize the best in journalism from media outlets across Alaska, Idaho, Montana, Oregon and Washington.

Everett mayor candidates focus on affordability, city budget in costly race

As incumbent Cassie Franklin seeks a third term in office, three candidates are looking to unseat her.

Everett
Judge sentences man, 73, for intending to have sex with ‘teen’ in Everett

The Arizona man sent explicit images to an agent posing as a 13-year-old. Investigators found images of child sexual abuse on his phone.

State’s draft of climate action plan open for public comment

Residents can submit public comments or climate-related stories online through Aug. 22.

The Edmonds School Board discusses budget cuts during a school board meeting on Tuesday, April 15, 2025 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds school board approves 2025-26 budget

After facing an estimated $8.5 million shortfall earlier in the year, the board passed a balanced budget Tuesday.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.