At a September House Ways and Means Oversight Subcommittee hearing, acting IRS Commissioner Daniel Werfel confirmed that the IRS has put all audits of political activity by tax-exempt organizations on hold until the agency can conduct a thorough review of its enforcement process. The hearing was held to review the current practices and policies of the IRS Exempt Organizations Office following the revelations in a May Treasury Inspector General's report that the IRS had been inappropriately targeting conservative groups applying for 501(c)(4) tax-exempt status and delaying approval of their applications.
Since the release of the Inspector General's report, several congressional committees have sought to determine the extent of the targeting and who at the IRS was responsible. Rep. Charles Boustany (R-LA), who chairs the Ways and Means Oversight Subcommittee, said in September that the IRS faces "a long road to recover its reputation. And the only way to get there is through transparency and accountability."
After confirming that examinations of political activity by tax-exempt organizations are on hold, Werfel emphasized the steps the IRS and its new leadership team in the Exempt Organizations Office have taken to strengthen and clarify IRS processes and restore public confidence. Those actions include improved methods of screening applications for tax-exempt status, enhanced training for screening agents, reducing the backlog of 501(c)(4) applications, and a comprehensive review of audit-selection criteria.
"Amid all the efforts the IRS is making to improve operations, we must remain mindful of the responsibility we have to ensure tax compliance," Werfel told the Oversight Subcommittee. "While we work to ensure fairness and efficiency in making determinations about tax exemption, we will continue to uphold the law as it relates to exempt organizations, and we will continue to meet our obligation to grant tax-exempt status only to those organizations that are fully eligible."