of non-profit conservative groups expected to testify and be invited to this hearing will be russell george, the inspector general and lois lerner and also neil roland the deputy treasury of the treasury. and the former irs commissioner will also be invited to testify at that hearing on wednesday of next week. they're going to announce that later this morning. that will join a long list of other congressional hearings, house, ways and means is expected to look into this, as well as over on the senate side, the permanent select committee on investigation. so now we have at least three committees here that will be digging into this irs hearing and what i am told about this oversight committee hearing is that aides will be looking into the question of where did this all begin?

stuart: jay russell george just finished and repeated his inspector general report.ause that's who he is. steve miller is about to start. we're going to listen to this one, go. >> i know this hearing within the last two days, the irs was unable to prepare written testimony. would i note that i have a very brief statement before i take your questions. first and foremost, as acting commissioner i want to apologize on behalf of the internal revenue service for the mistakes that we made and the poor service we provided. the affected organizations and the american public deserve better. partisanship or even the perception of partisanship has no place at the irs. it cannot even appear to be a consideration in determining the tax exemption of an organization. i do not believe that partisanship motivated the people who engaged in the practices described, in the treasury inspector general's report. i' i've reviewed the treasury inspector general's report, i think what happened here foolish mistakes were made by people trying fob more efficient in their workload selection. the

russell george who has been the treasury inspector general for tax administration. i think we'll wait for the camera pool to leave at this point. thank you. i'd like to welcome j. russell george who has been the treasury inspector general for tax administration since 2002 and mr. steven miller who is currently the acting commissioner for the irs. thank you both for being with us today. you will each have five minutes to present your testimony with your full written testimony submitted for the record. mr. george, we'll begin with you. you are recognized for five members. >> chairman camp, member levin and members of the committee thank you very much to discuss our report of oversight of the internal revenue service of groups that apply for tax-exempt status. as you ar ware the organization i lead protects the integrity of the federal tax system. our audit was initiated based on concerns expressed by members of congress because of taxpayer allegations that they were subject to unfair treatment by the irs. our report issued earlier this week addresses three allegations

>> i have never spoken with lois lerner, i met with russell george several weeks ago and my deputy, i see him every day. i have not seen doug shulman since sometime before he left the irs. >> the few conversations, was anything about the testimony or the situation, the scandal? >> i have testified already that russell george informed me there was an audit underway, so i spoke with him about it then as he reviewed a number of pending matters. itdid give me a heads up could be troubling but i did not know in what way. i have not spoken with him. he may have been in a staff meeting after that, but i have not spoken with him since. >> you clearly testified you did not want to get involved in an investigation, and i think that was the proper and prudent policy to have. stating that, there were people in the white house that knew there was an investigation, knew there was a problem. there were people in treasury that new prior to you and the president finding out. in retrospect -- again, not saying you had to take action -- but do you think you should have been notified that there was a pro

kelly referring, treasury inspector general jay russell george testified during yesterday's first congressional hearing into that scandal, saying specifically that he alerted senior officials at the treasury department about what was going on. >> i subsequently alerted the general counsel of the department of the treasury on june 4 and subsequently, and i do not have the exact date -- alerted the deputy secretary, neil wollen, about this matter. >> those are just the latest revelations, raising more questions about what the obama administration knew about the irs controversy and when. molly henneberg live in washington. hi, molly. >> hi, jamie and kelly. the treasury inspector general may have known in june 2012, the deputy treasury secretary may have been informed then about the allegations as well. but treasury secretary jack lew, who took over as treasury earlier this year, said he learned most of the details about the targeting about a week ago. what's not clear is if anyone relayed that information in 2012 or 2013 about the tax agency baring down on conservative groups to the white house.

i called up the same russell george and said russell, take a look at this. i think we done it correctly. nobody will believe, though, that we did. he did an audit on this, the same thing he did on the recent problem and came back in february of 2005 and said the service could have moved quicker here and could have had better guidance but in fact there was no bias and it was balanced as to how they selected organization o the grounds for follow-up. i don't get it because i know the service can do this correctly. they did when we did the work in '04 and '06. >> greta: i would say that the commissioner did it by asking for the investigation. i don't see that happening here with this one. anyway. thank you, sir. >> thank you. >> greta: the irs in very hot water with many americans tonight and now the same irs is going to play an important role in implementing obama care. former senator jim demint is not happy about that one and joins us. nice to see you, senator. >> thank you, greta. >> greta: i know you don't like obamacare and would like to see it repealed. te

. >> jay russell george is the treasury inspector general. >> it's not acceptable. an honest, hard working taxpayer should not be able to have his or her burden increased by someone cheating the system, gaming the system. that's what's occurring. >> reporter: nine years ago, the irs caught 18,000 fake returns where inmates claimed $68 million in fraud leapt refunds. today, 276,000 fraudulent returns asking for nearly $2 billion in money not due. >> a lot is getting through? >> yes. we are talking hundreds of millions of dollars. that's outrageous. >> free money going to inmates doing time? >> exactly. >> reporter: irs officials in california and washington, d.c., refused to go on camera and answer questions like this. in a statement given, the irs says that take the froud seriously. when accurate prisoner data is available, they can stop incorrect refunds. quote, there are still significant challenges in getting complete and consistent data from the multiple jurisdictions involved. >> you stop one scheme and another comes up. >>reporter: he's an investigative agent

with loisnever spoken met with russell george several weeks ago and i -- my deputy, i see him every day. i have not seen doug shulman since sometime before he left the irs. >> the few conversations, was anything about the testimony or the situation, the scandal? >> i have testified already and for mel george there was an audit underway so i spoke with him about it then as he reviewed a number of pending -- pending matters. he did give me a heads up it could be troubling but i did not know in what way. i have not spoken with him. he may have been in a staff meeting after that, but i have not spoken with him since. >> you clearly testified you did not want to get involved in an investigation, and i think that was the proper and work -- prudent policy to have. , there were people in the white house that knew there was an investigation, knew there was a problem. there were people in treasury that new prior to you and the president finding out. in retrospect -- again, not saying you had to take action -- but do you think you should have been notified that there was a problem? >> congressmen,

problem with that, because in the congressional hearing on friday the irs's inspector general, russell george, said that he had talked to neal wolin, around june of 2012, in the middle of the presidential campaign, told him he was investigating irs targeting of conservative groups. are we to believe that the number two man in treasury never told tim geithner and tim geithner told again -- again, right in the middle of a presidential campaign -- never told anyone in the white house about something this politically explosive? >> here's the cardinal rule when you deal with situations like this. you never interfere with an independent investigation, you never give the appearance of interfering with an independent the treasury department didn't tell anyone in the white house. the treasury department also said that all secretary wolin was performed of was -- informed of was that such an investigation was beginning, and gave the same heads-up to congress, including congressman issa. issa said he didn't talk about it publicly, is when you're dealing with a nonpartisan agency like the irs, you wait un

. >> reporter: inspector general russell george said he informed a deputy at the treasury department in june of 2012 about the probe into the i.r.s. targeting of conservative political groups. >> did you find any evidence of political motivation in the selection of the tax exemption applications? >> we did not, sir. >> reporter: the treasury department confirmed the timeline but said they did not know the details of the investigation until last week. it's the first evidence that someone within the obama administration knew about the white house was told of the federal investigation. republican congressman aaron schock serves on the house ways and means committee which oversees the i.r.s. >> we don't have any reason to believe at this point that it was anybody outside i.r.s. directing them to do this. obviously, there's been claimed claims that the white house might have been involved and other groups. i don't have any reason to believe that. >> reporter: he says the i.r.s.' behavior was criminal, claiming it hurt the ability of creativity groups to fund raise, and that limited their

george russell. steven miller, outgoing head of the irs. russell george, from the treasury department who carried out the inspection. when you hear the ig report mentioned by president, he is the one who ran that report. opening statements are rolling. when there are headlines we'll get you there live. martha: we sure will. in the meantime we're learning something that is quite shocking this morning. the irs official who was in charge at the time of the unit that targeted these conservative groups has moved over to a new position. she is now at the office responsible for implementing obamacare. if you can believe this. some lawmakers are up in arms about this. sarah haul ingram is her name. this is the upgrade, some would say in terms of position within the irs that she has received. fox business network's stuart varney joins me now. stuart, it belies common sense, if you knew anything was brewing in the area she was working in, that you would put her in such a high-profile spot. >> it is frankly astonishing, martha, this may welcome up at

guest: jay russell george is a key player. he's the inspector general's report set off this inquiry, the scandal, saying the irs had done targeting of mostly conservative groups. this is the first time he will testify publicly. onwill put a face and video some of the stories here. and the acting commissioner who was forced to resign, this is their first time to speak out as well. presumably will be defending the irs. it's not clear how steven miller will react. roll.he first head to the second one was forced to resign yesterday, but he was not first. story,ou figure in this this is the incoming actor/director, daniel were ful. guest: we are getting rid of the people who caused the problem, we are installing a new civil servants, people can be trusted by the public. the irs has a key role in helping implement the health care law that your callers are talking about. so republicans see this whole scandal as an opportunity to gain ground in terms of their arguments against the president's health care law, saying how could you trus

but, the bombshell on wednesday's hearing was treasury department inspector general jay russell george's admission that he had only conducted a quote/unquote audit of irs procedures, not an investigation. under questioning, george acknowledgedded that he did not ask any irs officials whether their targets of the tea -- targeting of the tea party was known to or ons gaited by the white house. george's revelation means that no authority whatsoever has conducted a probe. white house or obama/biden campaign involvement in the irs's political suppression of tea party groups that criticize the president. question. if lois lerner has nothing to hide, why did she invoke her fifth amendment privilege against self-incrimination? >> well, there are a lot of interesting factors here that we learn from the hearing this week, and no, we didn't hear from miss lerner who recused herself. she may be summoned back. she may have waived her fifth amendment right by saying she did nothing wrong at the start of the hearing, so we may be hearing from her. if she can come back on her subpoena, she may be questi

russell george, the treasury inspector general for tax administration. >> a possible breakthrough onp of house members said that they had a deal on sweeping legislation. the bill is being drafted right now. meanwhile, an immigration bill is before in the senate, where the judiciary committee held their third work session today to plow through some 300 admit men spirit >> an army sergeant will spend a rest of his life in prison without parole for killing five fellow service members a combat stress clinic and i wreck. sergeant john russell was sentenced yesterday. he will be transferred to fort leavenworth in kansas. the 40 year veteran previously pleaded guilty the on premeditated murder to try to get the death penalty off the table. prosecutors are able to prove that the killings were premeditated. the 2009 shooting was one of the worst cases of soldier on soldier violence in the war. defense attorneys argued there russell was diluted by depression at the time of the shootings. >> the head of the fort campbell restaurant program in kentucky has been removed from his post after being

. >> the treasury department secretary that being said we will hear from inspector general russell georgeouglas shulman he headed the agency while it was targeting conservative groups. both did testify in a thsenate hearing yesterday. >> not personally responsible for creating a list that had inappropriate criteria on it. i very much regret it happened on my watch. >> i don't think that qualifies as an apology. >> what is next for all of these irs employees the president demands irs officials be held accountable for the problems. the acting commissioner steven miller who we heard from last week and other agency officials have in fact left the agency. heather back to you. >> the irs are targeting a conservative group. it's the scandal most americans are most troubled by a brand new fox news poll shows this. 32 percent of those surveyed say the irs scandal the most, benghazi with 27 percent justice department sign on tfine on the associated press and fox news reporters said all three were equally troublintroubling. >> more than half of those asked say they disapprove of the job the presiden

j russell george confirmed that obama administration officials were aware that he was auditing the screeningsf politically active organizations well before the election. he informed the general counsel of his audit on june 40 / dear. deputy treasury secretary quotes shortly thereafter. a memorandum released shortly after the day's testimony to the republicans of the house. "whether or not the administration is sincere in its condemnation inhose actions will quickly be revealed with its willingness to cooperate with congress and make officials available for interviews. a failure to swiftly and fully comply with congression requests will speak louder than any words or apology pam condemnation could." thmemo promised that the investigation would continue until the american people knew the full truth. irs commissioner stephen miller took responsibility for his failings and abusive acts of his department despite his inability to answer principal questions. a noble gesture from a man who was scheduled to leave this position prior to the president demanding his resignation. we have more on what was

kelly referring, treasury inspector general jay russell george testified during yesterday's first congressionalo that scandal, saying specifically that he alerted senior officials at the treasury department about wh

one of his deputies jay russell george this because the irs has admitted it unfairly targeted conservative groups for years. yet, the boss, miller, says he didn't know much about it i'm going to take exception to the comment targeting because that's a loaded it term. >> this is not a listing, you created a beyond the lookout list. that's not a centralized government mandated or directed listing. you had a be on the lookout list that you acknowledge. who is responsible for targeting these individuals? >> so, i don't have names for you, mr. brady. and i'm willing to try to find that out. >> bill: since his last day, i think it's today. you know, come on. so, let's see, benghazi, the obama administration is going to find out nothing would happen and bring the terrorists to justice. and now in the irs scandal, they are willing to find out. you sense a theme here. >> attorney general eric holder announced a criminal investigation of what happened. between those investigations, i think we are going to be able to figure out exactly what happened. >> bill: be able to figure it out. now, i'm mockin

russell george who testified yesterday and they he made ducks about being more timely and better guidance. there was none of this. this surprises me. and the work that was done is really atrocious and unbalanced. it is a shame. >> judge jeanine: you would agree he, then, commissioner, that what you are seeing now is something that has only happened during the obama administration based upon what you did when you were the irs commissioner? >> let me cover a couple of the points made in your previous pieces if i can. i think that this did -- the one issue is what happened in cincinnati and what they set up and the screens they put in place were absolutely wrong. i don't believe, though, that a word could have come down from the top as has been implied look only at these groups. what is a problem, though, is that once management was aware of it management did not act to correct it and then there is the whole question of the candor and dealing with the congress which is equally serious. >> judge jeanine: once management was aware of it and didn't correct it makes them complicit, does it not,

feature three key figures, outgoing acting irs commissioner steve miller, inspector general jay russell george, who did the report, and the douglas schumann, former irs commissioner. >> shepard: what can we expect from the next hearings? >> darryl issa, chairing a hearing himself on wednesday up here, had this to say, quote, exactly who in the administration knew about the irs targeting is one of the key outstanding question. in waiting so long to address wrong-doing and inform the public president obama and his administration seem more preoccupied with having deniability than quickly addressing serious wrong-doing. meanwhile, a leading senate republican is calling on his colleagues to have patience. >> it's hard to do when you're outraged but the right thing to do here is let the facts come out. don't try to prejudge what they are. it's more and more obvious to me that we're going to find out that more people knew about the irs than have admitted so far they knew about it, and people are going to be upset when that happens. >> with the irs, benghazi, and the department of justice targeting re

witnesses, acting commissioner of the irs steven miller and the treasury inspector general jay russell georgeasury inspector general investigation shows the irs began targeting tea party groups in the spring of 2010. by june of 2011 the irs was singling out those focused on debt, taxes and criticizing how the government was run. and in january of 2012 the irs broadened scrutiny of key organizations applying -- conservative organizations. that proves officials used the irs as a political tool in an election year. >> if you use constitution, bill of rights, patriot or tea party, you were likely to have a very rough time where, apparently, if you used progressive or moveon you were not. and this kind of targeting is what we knew before the election, and now we have proof. >> reporter: the white house denies any involvement saying the treasury inspector general alerted administration attorneys of their investigation late last month. president obama says he learned of it on friday, and this afternoon condemned the irs's conduct. >> if, in fact, irs personnel engaged in the kind of practices that h

. >> reporter: irs inspector general, jay russell george. >> it is possible that criminal activity may have occurred, but it is too early at this stage that make that determination. >> reporter: it can be a crime to lie to congress. lynch ripped into former irs commissioner douglas shulman. he testified last year irs was not targeting, then learned a list of groups had been targeted. >> when you learned that our suspicions were true, when you learned that there was a list, you did nothing. you did nothing. you never came back to congress to straighten out that impression. that's inexcusable. >> reporter: shulman went to the white house 118 times, but testified he never discussed irs targeting. shulman left irs last year. tonight, this is the first day irs has a new acting commissioner, danny wurfel who's been given the job of repairing the image of irs. >>> family and friends are demanding answers today after a man was killed in alexandria early this morning. it was some kind of dispute between the victim and an off-duty arlington county sheriff's deputy. so far no charges have been fi

the ig, russell george, said the way it was done may be a violation of the law. >> sean: do you thinkhey purposely lied? >> they purposely don't want to know things. we don't think they could be so dumb as to not know so much. >> sean: that's a mouthful. mr. chairman, thank you. this is important. the american people to know that the irs is not out there intimidating them because of their political views, their associations, and very dangerous stuff. thank you both for what you're doing. appreciate it. >> thank you. >> thank you. >> sean: coming up next, in a "hannity" exclusive, you'll meet the reporter who may have uncovered the irs agent responsible for ordering the agency to target conservatives. plus rhines priebus will join me in studio. mrs., chilling video from london of a terrorist attack carried out by a knife-wielding islamist. you can see the blood on his hands. [ engine revving ] ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive... but feel alive. the c-class is no exception. it's a mercedes-benz, th

russell george said there was no bias. i think the cincinnati operation, what they did was inexcusable and a real management failuret that as these problems became known they weren't attended to quickly. they language for a long time. that is going to get a hearing. was there sufficient candor when different people at the service reported to congress. that is a real problem. >> you are referring to lerner who is the director of the irs tax exempt division who we don't have confirmation of whether or not she will be testifying. everybody would like to get answers from her. as we get back to danny werfel he has this nonpartisan background in the bush and obama administrations. some republicans say he is not the right choice. some are calling him a white house insider. how can any commissioner in the way that d.c. is right now, this hyperpartisan environment truly function without being pinged and dinged from the left and the right? >> i can tell you from experience you have to have a fairly thick skin if you are going to tak

russell george. i think we'll wait for them to leave at this point. j. russell george has been the general inspector for the tax administration from 2002 and the current acting commissioner for the irs, steven miller. you will each have five minutes to resent your testimony with your full written testimony submitted for the record. mr. george, you're recognized for five minutes. >> chairman camp and levin. as you are aware, the organization i am a part of the inspector general, protects the integrity of the federal tax system. this was initiated based on concerns expressed by members of congress because of taxpayer allegation that they were subject to unfair treatment by the irs. the report issued early this week issues 3 allegations. first, the irs targeted spas the groups applying for status. second, they delayed these groups applications, and third the irs request of the necessary and permission from groups they subjected to special scrutiny. all three allegations were substantiated. the irs used inappropriate criteria to target for review to party an

russell george, and former irs commissioner douglas shulman. live coverage at 10 a.m. eastern on c-span3. and on wednesday, the house oversight and government reform committee looks into the issue. lois lerner who managed the irs exempt organizations department will be one of the witnesses. you can watch that here and live at 9:30 a.m. eastern also on c-span3. >> in 1848 we have an unusual mmr kabul situation here. suddenly, gold is discovered and the reason why cantonese was amongst the first to hear about is that there already were some chinese here. news is productive southern china an and in a flash thousans of men began to board ships ahead for the cold mountain, which california was known as then, and is still known as the golden. the arduous anniversary of man walking through a field looking for gold nuggets and filling their pockets with gold nuggets. they found extreme and factors that rally was since nobody was looking for, nobody saw. when it began to look for it they found in abundance. but very quickly that plastic gold was all taken a. but what was to hap

well, i called this same russell george, who issued the report on this new set of allegations, i said russell can you please look into this promptly and give us a bill of health. because i knew it had been done correctly. he did issue a report in february of 2005. it indicated that while we could have done better in some of the guidance or the training or the timing, that there was absolutely no bias and that the criteria were appropriate. >> john: right. >> i'm almost done. that's not the determination's unit. but that's not the same unit in cincinnati but it is the same kind of challenge about being balanced so i know the service knows how to do this and do it correctly. >> john: indeed, they do. in the case of the churches, it was more they were anti-war than pro democratic party is my understanding. it is fair to point out there were liberal groups targeted. emerge america did lose tax-exempt status. was forced to disclose donors and pay more taxes. that didn't happen to any of the conservative groups complaining. the heart of this is whether the i.r.s. used the keywords like tea

testimony from ousted acting irs commissioner steve miller and the agency's inspector general, jay russell george. most of the questions accused miller of lying to congress. >> why did you mislead congress and the american people on this? >> mr. chairman, i did not mislead congress or the american people. i answered the questions as they were asked. >> you didn't mention targeting based on ideology. you didn't mention targeting based on words like tea party or patriots or 9/12. you knew that but you didn't mention this to the committee. did you not think that was a very incomplete answer? >> i answered truthfully. i never said i didn't do anything wrong. what i said is contained in the questions. i resigned because as the acting commissioner, what happens in the irs, whether i was personally involved or not, stops at my desk. i also will tell you. >> let me ask you -- i'm going to mr. george because my time -- you're not going to cooperate with me, mr. miller, and you've been uncooperative during this hearing. >> why did you say you have notes if you don't think you had notes? >> sir, please. ple

because in the congressional hearing on friday the irs inspector general russell george said that he had talked to neal woland the deputy tressi secretary around june of 2012 in the the middle of the presidential campaign and told him that he was investigating irs targeting of conservative groups. are are we to believe that the number two man in treasury never told tim geithner and he never told again right in the middle of a presidential campaign never told any one in the white house about something this politically explosive? >> here is the cardinal rule when you deal with situations like this. never interfere with an independent investigation and never give the appearance of interfering with an independent investigation. they didn't tell any one in the white house and the treasury department said that all that secretary warren was informed about was that an investigation was beginning. gave the same heads up to congressman ice is a. there was no details and no evidence and as congressman issa said as to why he didn't talk about this publicly when you are dealing with a nonpartisan

russell george, a treasury department inspector general. his report, released this week, singled out the i.r.s. office in cincinnati that screens applications for tax exemptions. >> i.r.s. employees actually began selecting tea party and other organizations for review in early 2010. >> reporter: george said the practice lasted about 18 months, and he blamed ineffective management. he said i.r.s. officials told him they were not under any political pressure to act. washington democrat jim mcdermott pursued that conclusion. >> the inspector general's report says that no one acted out of malice or political motivation. mr. george, i want to know, do you still stand by that? >> we have no evidence at this time to contradict that assertion, sir. >> reporter: in fact, steven miller argued that even the term "targeting" is unfair. he said, the cincinnati office was simply overwhelmed when applications from tea party groups exploded. >> what happened here is that someone saw some tea party cases come through. they were acknowledging that they were

russell george-- the treasury inspector general who reported on the i.r.s.geting-- came in for criticism. chairman issa argued george should have alerted congress of his findings sooner. george defended himself, saying he was following established procedures. >> to ensure fairness and to ensure that we are completely accurate with the information that we relay to congress, we will not report information until the i.r.s. has had an opportunity to take a look at it to ensure that we're not misstating the facts. >> mr. george, that is not the statute. that is not the statute. this committee last august made it very clear that the statute as written does not give you the ability, or any i.g., to use us as a whipping boy when you want to, and in fact keep us in the dark until an investigation is completed. >> brown: the committee also heard from deputy treasury secretary neal wolin. he said what happened at the i.r.s. was inexcusable, but no one at treasury was involved. today's hearing came to an end after six hours, but there's is no end in sight to the three c

russell george, the treasury inspector general for tax administration who conducted the audit.ho republican mike crapo was skeptical of his conclusion that i.r.s. agents were not driven by politics. >> you have simply the reached the conclusion that there was none or that you haven't found it? >> it's the latter, that we have not found any, sir. >> because it seems to me that it's almost unbelievable to look at what's happening and then say there's no political motivation here. how could an agency with the power that the internal revenue service has engage in this kind of conduct and it not be politically motivated? >> woodruff: there were also plenty of questions directed at the white house again today, the administration's timeline surrounding who knew what and when about the activities at the i.r.s. faced mounting scrutiny. presidential press secretary jay carney said monday that the white house's top lawyer and the chief of staff were told in april about the inspector general's report, but the president was not informed. today, he said: >> there was nothing the president co