IRS’s Lerner Weighed Audit Involving Senator Grassley

Lois Lerner, the Internal Revenue Service official at the center of the controversy over scrutiny of Tea Party groups, once considered requesting an audit involving U.S. Senator Charles Grassley, an Iowa Republican.

The House Ways and Means Committee today released a partial e-mail exchange from 2012 in which Lerner, who retired last year, said that an organization hosting an event was “inappropriately offering to pay for his wife.”

“The fact that Lois Lerner attempted to initiate an apparently baseless IRS examination against a sitting Republican United States senator is shocking,” Representative Dave Camp, chairman of the Ways and Means Committee, said in a statement. “At every turn, Lerner was using the IRS as a tool for political purposes in defiance of taxpayer rights.”

The e-mail exchange doesn’t provide complete details, and the reply to Lerner suggests that an audit probably wasn’t warranted. The e-mails also don’t make clear whether Lerner was suggesting an audit of Grassley or of the nonprofit organization.

The e-mails note that invitations to Grassley and Lerner were mixed up, which is how Lerner began looking at Grassley.

In a statement, the Ways and Means Committee said Grassley and his wife, Barbara, waived their taxpayer privacy rights so the e-mails could be released.

Senate Finance

Grassley, 80, is a former chairman of the Senate Finance Committee who has frequently called for tougher enforcement by the IRS of nonprofit groups.

“This kind of thing fuels the deep concerns many people have about political targeting by the IRS and by officials at the highest levels,” Grassley said in an e-mailed statement. “It’s very troubling that a simple clerical mix-up could get a taxpayer immediately referred for an IRS exam without any due diligence from agency officials.”

Beth Levine, a spokeswoman for Grassley, said the senator wasn’t audited. The event in question was in 2013, she said, and Grassley didn’t attend.

The name of the group isn’t being released because the organization hasn’t waived its privacy rights, Levine said.

Lerner, who was the IRS director of exempt organizations, oversaw the group of employees who gave Tea Party groups extra scrutiny based solely on their names. House Republicans have already voted to hold her in contempt and refer her for prosecution.

Lerner retired from the IRS after being placed on leave. She has refused to testify to Congress, and lawmakers are now probing the loss of more than two years of her IRS e-mail.

Before it's here, it's on the Bloomberg Terminal.