Obama picks restructuring expert Koskinen to take over IRS

Thursday - 8/1/2013, 3:39pm EDT

By NEDRA PICKLER and STEPHEN OHLEMACHER
Associated Press

WASHINGTON (AP) - President Barack Obama is nominating a retired corporate restructuring expert to take over the Internal Revenue Service, which is under fire for its screening of political groups.

In a statement, Obama says John Koskinen "knows how to lead in difficult times, whether that means ensuring new management or implementing new checks and balances."

The President said he is confident Koskinen, a former deputy director in the Office of Management and Budget, will restore public trust as the tax agency's commissioner.

Koskinen was brought in to overhaul mortgage buyer Freddie Mac after its near collapse in the financial crisis, among handling many other public and private reorganizations.

Obama ousted acting IRS Commissioner Steven Miller in May after revelations that the agency improperly targeted political groups when they filed for tax-exempt status.

In Miller's stead, Obama named Danny Werfel, the OMB controller, the acting commissioner.

The personnel shuffle came amid furloughs of virtually all of the agency's 90,000 employees because of budget shortfall due to the automatic budget cuts known as sequestration. However, last month, Werfel announced at least one planned furlough day would be canceled because IRS officials had identified alternative savings.

As acting commissioner, Werfel also aimed to eliminate employee bonuses to free up agency savings.

However, Republican lawmakers have recently claimed Werfel has stonewalled their investigations into IRS misconduct. In a July 30 letter to the acting commissioner, Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, denounced what he called the "systematic manner in which the IRS has attempted to delay, frustrate, impede, and obstruct the committee's investigation."

Obama's nomination of Koskinen to a full five-year term still must be confirmed by the Senate.

An administration official, speaking on a condition of anonymity since the search was private, said the president directed his team to above all find someone with extensive experience taking on organizations in crisis and knowledge of best practices to turn them around. Koskinen's corporate restructuring experience includes 21 years at the Palmieri Company consulting firm, where his positions included CEO and chairman, president, and vice president.

The IRS has been under siege since May when agency officials acknowledged that agents working in a Cincinnati office had improperly targeted tea party groups for extra scrutiny when they applied for tax-exempt status. The IRS has since released documents suggesting that progressive groups may have been targeted, too.

Democrats in Congress have highlighted the possibility that liberal groups were also abused to counter charges by some Republicans that that the targeting was politically motivated.

Congressional investigations have so far shown that IRS supervisors in Washington — including lawyers in the chief counsel's office — oversaw the processing of tea party applications. But there has been no evidence that anyone outside the IRS directed the targeting or that agents were politically motivated.

(Federal News Radio's Jack Moore contributed to this report)

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