House Oversight Committee Chair Darrell Issa, R-Calif., threatened to hold Lerner in contempt before abruptly ending the hearing, cutting off the microphone of the committee's ranking member, Rep. Elijah Cummings, D-Md.
“Ms. Lerner, what did you mean by ‘tea party matter very dangerous,’” Issa asked. “Ms. Lerner, why would you say that tea party cases were very dangerous?”
When she refused to testify, Issa, with “no expectation Ms. Lerner will cooperate with this committee,” adjourned the meeting.
The scandal erupted last year when Lerner acknowledged the IRS had put Tea Party groups seeking tax exempt status under extra scrutiny, but denied targeting groups with Republican leanings.
“My object is not to look for political activity -- more to see whether self-declared [501(c)4s] are really acting like c4s," Lerner said in an email, according to a draft of a new Oversight and Government Reform Republican report.
These groups, defined by the IRS, are civic, social welfare and employee associations that are eligible for tax-exempt status within certain limits. Under the controversial Citizens United Supreme Court decision in 2010, these groups can make political contributions without having to disclose their donors in FEC filings, but are prohibited from direct electoral advocacy, and are limited to using 49 percent of their resources for political purposes to qualify for exemptions.
Lerner directed her colleagues to "keep track of new c4s" and "be more pro-active" in sussing out groups engaging in political activity beyond the scope of the 501(c)4 rules. Issa and his Republican colleagues allege Lerner was screening specifically for Republican groups, an assertion Democrats on the oversight committee is false.
Emails contained in the report indicated the IRS believed many of these groups -- brought to their attention by heightened media coverage of the Tea Party -- were bending or outright flouting the rules for political engagement.
Citizens United “dealt a huge blow, overturning a 100-year-old precedent that basically corporations couldn’t give directly to political campaigns," Lerner said in a speech at Duke University, according to the report.
"The FEC can’t do anything about it. They want the IRS to fix the problem," she said. "Everybody is screaming at us right now: ‘Fix it now before the election. Can’t you see how much these people are spending?’"