Attorney General Eric H. Holder Jr. announced at a news conference on Tuesday that the Justice Department would open a criminal investigation into the Internal Revenue Service's focus on conservative groups.
WASHINGTON — The Internal Revenue Service said Wednesday that its chief counsel did not tell Treasury superiors of I.R.S. efforts to target conservative groups for special scrutiny, nor did he participate in a 2011 meeting when the issue was discussed with the I.R.S. chief counsel’s office.
The I.R.S. statement came as House and Senate aides investigating the agency’s actions said they were focusing on an Aug. 4, 2011, meeting in which, according to a report by the Treasury inspector general, the I.R.S.'s chief counsel conferred with agency officials to discuss the activities of a team in the Cincinnati field office. The team had been subjecting applications for tax-exempt status from Tea Party and other conservative groups to a greater degree of review than those from other organizations.
Under I.R.S. rules, the agency’s chief counsel, William J. Wilkins, reports to the Treasury Department’s general counsel, and investigators want to determine if Mr. Wilkins took the issue out of the independent I.R.S. to other parts of the Obama administration.
But the I.R.S. statement Wednesday said the notation on which the report relied was referring to the chief counsel’s office, which employs 1,600 lawyers, not Mr. Wilkins himself.
“Wilkins is not involved in the 501(c)(4) application process,” the agency said. “He did not discuss 501(c)(4) applications with the Treasury general counsel. Mr. Wilkins did not learn about specific groups being singled out by name until earlier this year.”
The question of whether Mr. Wilkins conferred with Treasury staff members holds significant political implications for the White House, which has stressed the I.R.S.'s independence even as President Obama has castigated the agency over the allegations of political bias.
A bipartisan investigation by the Senate Finance Committee built steam on Tuesday, and the House Ways and Means Committee prepared for the first hearing on the matter on Friday with an extensive request for documents from the I.R.S. The House Oversight Committee, which will hold a hearing on Wednesday, formally accused one I.R.S. official of misleading lawmakers on four occasions.
“What we don’t know at this point is whether it jumped the fence from the I.R.S. to the White House,” said Senator Mitch McConnell of Kentucky, the Republican leader. “But we do know this: we can’t count on the administration to be forthcoming about the details of this scandal, because so far they’ve been anything but.”
The inspector general’s report, issued Tuesday, blamed ineffective Internal Revenue Service management in the failure to stop employees from singling out conservative groups for added scrutiny. Late Tuesday, Mr. Obama said in a statement that “the report’s findings are intolerable and inexcusable.”
“The federal government must conduct itself in a way that’s worthy of the public’s trust, and that’s especially true for the I.R.S.,” he said, adding, “This report shows that some of its employees failed that test.”
He said he was asking Jacob J. Lew, the Treasury secretary, “to hold those responsible for these failures accountable, and to make sure that each of the inspector general’s recommendations are implemented quickly.”
The Obama administration tried to stay ahead of the furor with an announcement by Attorney General Eric H. Holder Jr. that he had ordered a federal investigation into whether I.R.S. officials broke any criminal laws by singling out the conservative groups.
“The F.B.I. is coordinating with the Justice Department to see if any laws were broken in connection with those matters related to the I.R.S.,” Mr. Holder told reporters. “Those were, I think, as everyone can agree, if not criminal, they were certainly outrageous and unacceptable, but we are examining the facts to see if there were criminal violations.”
But a matter portrayed by the I.R.S. on Friday as a little-known operation conducted in Cincinnati, largely out of the sight of Washington officials, continued to sprawl. The report by the Treasury inspector general for tax administration offered new details on the scope and duration of the I.R.S. targeting effort.
