Former White House budget office controller Danny Werfel, the man President Obama has tapped to lead the scandal-ridden Internal Revenue Service, met with embattled then-IRS commissioner Douglas Shulman just two days before the agency decided to resume its improper targeting of conservative groups.
Werfel, who as acting commissioner had vowed to restore “trust” in the IRS, met with Shulman at the tail end of an approximately six-month period in which the IRS was officially practicing a nonpartisan approach in reviewing the tax-exempt status of nonprofit groups.
Two days after the meeting between Shulman and Werfel, the IRS renewed its improper focus on conservative groups.
In May 2010, the IRS Determinations Unit began developing a spreadsheet known as the “Be On the Look Out” (or “BOLO”) listing that identified Tea Party groups as targets for extra scrutiny, and by July 2010 the Determinations Unit management had requested that its specialists look out for Tea Party groups.
But on July 5, 2011, the IRS changed its criteria used to identify tax-exempt applications for review, cutting out specific references to conservative groups and returning the operation to its proper nonpartisan bent.
“A conference call was held with the Technical Unit; the Director, EO; and the Determinations Unit Program Manager. They developed new criteria for identifying cases. The Determinations Unit Program Manager made changes to the BOLO listing. The criteria were changed to ‘organizations involved with political, lobbying, or advocacy for exemption under 501(c)(3) or 501(c)(4),’” according to the a report prepared by the Treasury Inspector General.
On January 23, 2012, Shulman met personally with Werfel in Room 234 of the Eisenhower Executive Office Building, according to White House visitor logs.
Two days later, on January 25, 2012, the criteria used by the IRS to identify tax-exempt applications for review was once again revised, according to the Inspector General report, in order to resume targeting small-government groups.
“The BOLO listing criteria were again updated. The criteria was revised as ‘political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform/movement.’ The coordinator contact was changed as well,” on January 25, according to the Inspector General report (page 38).
Shulman ended his five-year term at the IRS in November 2012.
Obama appointed Werfel May 16, 2013 to become acting IRS commissioner after Steven T. Miller resigned from the post. Werfel, who previously served as the Obama administration’s “point man” on sequestration, took office May 22 and has publicly launched an investigation into IRS wrongdoing “to make sure it doesn’t happen again.”