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Lois Lerner was eager to audit Senator Grassley (R-IA)

Loois Lerner:  Tip of the iceberg?
Photo by Chip Somodevilla/Getty Images

The IRS scandal takes on a more sinister look by the day. Wednesday it was reported that Lois Lerner, the center of the IRS tea party-targeting scandal, suggested referring Iowa Republican Sen. Chuck Grassley for a possible audit.

Her email communication in 2012 was released by the Republican-controlled House Ways and Means Committee. Lerner's email took place in December 2012. Lerner, former director of the IRS' Exempt Organizations Unit, “mistakenly received an invitation to speak at an event. Her invitation was meant for Grassley.”

ABC News reported that Lerner and Grassley were both invited to speak at a seminar. A mix-up occurred and Grassley’s invitation indicated the group was also paying for Grassley's wife to travel and attend the seminar. Grassley's wife, Barbara, is a lobbyist.

That apparently put a thought in Lerner's head. Instead of forwarding the mistaken invite to Grassley, Lerner immediately suggested that the issue should be referred for examination. That is IRS slang for “pre-audit.” In the email, Lerner commented that a colleague "inappropriately offered to pay."

Matthew Giuliano, a legal counsel at the Tax Exempt and Government Entities Division of the IRS, later vetoed the idea of auditing a six-term U.S. Senator. "I think the offer to pay for Grassley's wife is income to Grassley, and not prohibited on its face," Giuliano wrote.

Giuliano effectively contained Lerner and observed dryly, she wouldn't "want to be on stage with Grassley on this issue."

Sen. Grassley's reaction upon hearing the story? He said, "This kind of thing fuels the deep concerns many people have about political targeting by the IRS and by officials at the highest levels. 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."

The IRS's reaction included a dry statement of their own they couldn't comment "due to taxpayer confidentiality provisions. As a general matter, the IRS has checks and balances in place to ensure the fairness and integrity of the audit process. Audits cannot be initiated solely by personal requests or suggestions by any one individual inside the IRS."

The IRS has pleaded that Lerner's emails were lost because her computer crashed in 2011. House Oversight Chairman Darrell Issa is not convinced. He intends to extend his year-long IRS investigation by issuing a subpoena to the Federal Election Commission for all communications involved Lerner from Jan 1, 1986 to the present, CNN reported.

One of the angrier members of the House Ways and Mean probe, Rep. Dave Camp (R-MI) said, "We have seen a lot of unbelievable things in this investigation, but the fact that Lois Lerner attempted to initiate an apparently baseless IRS examination against a sitting Republican United States senator is shocking. At every turn, Lerner was using the IRS as a tool for political purposes in defiance of taxpayer rights."

It doesn't help the IRS's flimsy excuses that Grassley had been an outspoken critic of the way the IRS policed tax-exempt groups. To no one's surprise, a group of Republican senators, including Grassley, on the Senate Finance Committee adamantly want a Senate probe to investigate the unlikely excuse that the IRS lost the cache of Lerner emails.

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