A huge increase in workload, rather than deliberate targeting, led to "foolish mistakes" and the political discrimination in the Internal Revenue Service cited by an inspector general's report, the agency's outgoing commissioner said Friday.
The testimony by Steven Miller, who was forced to announce his resignation this week as acting IRS commissioner, came at the first congressional hearing on the matter that has put President Barack Obama's administration on the defensive.
Rep. Dave Camp, chairman of the Republican-led panel, and other GOP members sought to depict the controversy as indicative of government gone wild, with the IRS abusing conservative groups and other political foes of the administration.
"This kind of reconfirms that, you know what, they can do anything they want to anybody they want any time they want," GOP Rep. Mike Kelly of Pennsylvania said about the IRS.
The public gallery erupted in cheers and applause when he concluded by saying: "This is absolutely an overreach and this is an outrage for all Americans."
Democrats on the committee also expressed outrage at the targeting of conservative groups seeking tax-exempt status, but they pointed out that the top IRS official at the time was appointed by Republican President George W. Bush, not Obama.
They also noted that the inspector general's report stated there was no evidence of any political motivation for what happened, or influence from outside the IRS.
However, the inspector general who filed the report on the political targeting, J. Russell George, told Friday's hearing that he notified top Treasury officials, including Deputy Secretary Neal Wolin, as early as June 2012 that he was reviewing the office that handles tax-exempt applications.
George made clear that he only told them that he was conducting a review, which he said was prompted by a request from someone he described as a congressional staff member.
"It was not to inform them of the results of the audit, it was to inform them of the fact that we were conducting the audit," George later clarified.
A Treasury official, who discussed the matter on the condition of not being identified, told CNN that Wolin learned of the review, but not any findings, in the summer of 2012. Wolin did not discuss the review with anyone outside the Treasury department, the official said.
The Treasury Department oversees the quasi-independent IRS. Some Republicans are trying to find a link between the Obama administration and the IRS targeting, and the GOP-led House Oversight Committee has invited Wolin to appear at a hearing next week on the IRS controversy.
In his opening remarks Friday, Miller described an IRS division that handles requests for tax exempt status by political groups as overwhelmed by a surge that followed the Supreme Court's 2010 Citizens United decision, which greatly expanded the ability of corporations, unions and other organizations to participate in election spending, though not through direct contributions to candidates or parties.
"I think that what happened here was that foolish mistakes were made by people who were trying to be more efficient in their workload selection," Miller said, calling the practices described in the inspector general's report as "intolerable" and a "mistake," but "not an act of partisanship."
He apologized for what he later called "horrible customer service," but he also stubbornly rejected any accusation that it amounted to politicizing the work of the IRS.
Miller came under aggressive and accusatory questioning from Camp and other Republicans, who claimed he misled Congress by failing to reveal the extent of the problem at previous hearings dating back a year.
"When asked the truth and you know the truth and you have a legal responsibility to inform others of the truth but you don't share that truth, what is that called?" Camp asked.
"I always answer questions truthfully, Mr. Camp," Miller replied.
A tense exchange with Rep. Diane Black, a Tennessee Republican, involved Miller's denial that what he called the "listing" of names or phrases that triggered extra scrutiny of exemption requests amounted to political "targeting," the word used in the inspector general's report.
Miller acknowledged that the list of triggering phrases was conservative-based, causing Black to cut him off by declaring: "Then I would say its targeted. You can't have that both ways."
GOP Rep. Devin Nunes of California later asked why Miller resigned if he wasn't personally involved in the improper acts. Miller replied: "I resigned because as the acting commissioner, what happens in the IRS, whether I was personally involved or not, stopped at my desk."
"And so, I should be held accountable for what happens," he said. "Whether I was personally involved or not, a very different question, sir."
Another Republican, Rep. Tom Reed of New York, took exception with Miller's characterization of his resignation, noting it meant he would retire with full benefits and "nothing bad is going to happen to you."
With an incredulous grin, Miller responded: "Nothing bad is happening to me, congressman?"
Reed remained stern-faced, noting Miller continued to get his taxpayer-funded salary.
"You're getting paid for being here today, right?" Reed asked, to which Miller, his smile gone, dryly replied: "Right."
After the hearing, Camp described a "disturbing lack of detail and information" during testimony.
"We're going to continue to pursue this, as a committee, to find out who knew what, when, where, and how these decisions were made and how they were carried out," he said.
Earlier he told reporters the panel wanted unspecified records from Miller's tenure at the IRS.
Democrats sought to balance rejection of any perception of political manipulation by the IRS in the case with an effort to portray the situation as a poorly managed increase in demand for tax exempt status by political groups.
Rep. Jim McDermott, D-Washington, said the vast majority of the increased applications for tax exempt status after the Citizens United decision were from "far right groups," while fellow Democratic Rep. Richard Neal of Washington said the conservative organizations wanted to be involved politically without revealing donors -- as allowed for the 501 (c) (4) groups under the federal tax code.
"It all started right after Citizens United," McDermott said, adding that political groups "saw the door open" and thought that "we can get in, we can do political advertising."
He described a difference between "stupid mistakes and deliberate mistakes," adding that the IRS officials handling the requests took a shortcut "they deeply regret."
Democrats repeatedly asked George, who wrote the report on the controversy, to reiterate that there was no evidence of political motivation. Each time, George agreed his review found no such evidence.
Rep. Sander Levin, the panel's ranking Democrat, specifically cited the former IRS commissioner, Douglas Shulman, for what he called misleading Congress on the issue. Shulman was not a witness at Friday's hearing, but is scheduled to appear at other congressional hearings next week.
According to the report by George, the agency developed and followed a faulty policy to determine whether the applicants were engaged in political activities, which would disqualify the groups from receiving tax-exempt status.
The controversial move began in early 2010 and continued for more than 18 months, the report said, declaring that "the IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention."
Among the criteria used by IRS officials to flag applications was a "Be On the Look Out" list, which was discontinued in 2012, the report said.
The criteria included:
-- Whether "Tea Party," "Patriots" or "9/12 Project" was referenced in the case file.