A former IRS employee testified recently at a hearing before the House oversight committee that the Washington office of the IRS was involved in the improper scrutiny of political advocacy groups and that the issue reached the office of the chief counsel William Wilkins — one of two political appointees in the agency.
Sen. Charles E. Grassley is also demanding information from the Department of Justice as to why it did not prosecute several cases where confidential taxpayer information of political donors and candidates, including Ms. O'Donnell, was accessed.
"No fair observer of that hearing would believe that this investigation is close to being over," said Frederick Hill, a spokesman for California Republican Darrell E. Issa, chairman of the House Oversight and Government Reform Committee.
Mr. Hill said the committee is continuing to conduct interviews and is close to the point where it will start to get to more senior-level IRS staffers.
"This is certainly demonstrative of much more involved and senior advisers than the administration wanted to acknowledge two or three months ago," he said.
J. Russell George, Treasury's inspector general for tax administration (TIGTA), retired IRS agent Carter Hull, and agency employee Elizabeth Hofacre did testify they saw no evidence of political bias or involvement from the White House in the improper targeting of conservative groups seeking tax-exempt status starting in 2010.
Mr. George also found himself fending off broadsides from Democratic lawmakers furious that he failed to disclose the fact that liberal groups received additional scrutiny as well. He said he only received such information recently, and well after his initial report was released in April.
Regardless, the scandal has spread beyond the improper targeting of political advocacy groups, which has been the focus for the past several months. The Washington Times reported last week that Mr. George had found at least four cases in which a political candidate's or donor's tax information was accessed improperly.
One case was a "willful" violation, according to Mr. George. He also found three other cases in which records of candidates and donors were accessed inappropriately, but he concluded that those were "inadvertent," according to information he provided to Mr. Grassley, Iowa Republican.
Mr. George is also planning to interview Ms. O'Donnell about an incident in 2010 when Delaware's tax collection office accessed the federal tax records of an unnamed taxpayer, believed to be Ms. O'Donnell, according to a Grassley staffer.
TIGTA did not respond to a request for comment Sunday.
Patrick Carter, director of the state's division of revenue, would not identify Ms. O'Donnell as the taxpayer but said he approved the inquiry "for routine purposes."
Ms. O'Donnell told The Washington Times that she was contacted in January by a federal Treasury official who told her that her IRS tax records might have been accessed inappropriately by a government official. She said the federal investigator dropped the inquiry in April, and she has been unable to learn why her tax records were scrutinized.
She said the accessing of her tax records took place on the same day that she announced her candidacy for the U.S. Senate, and she has questioned whether the timing was politically motivated. News reports surfaced at the time that Ms. O'Donnell had been slapped with a tax lien, which turned out to be generated by a computer error.
But Mr. Carter said his agency did not engage in wrongdoing.
"Upon reviewing the access with the U.S. Treasury Department in December 2012, my division again found state access of the records of the taxpayer was part of a typical review and was not improper," Mr. Carter said. "Further, the state Division of Revenue has received no notification from the U.S. Treasury that access of the taxpayer's records by a state employee was improper."
Mr. Carter said the division "routinely compares state and federal tax records for discrepancies and potential investigation based on information provided on tax forms, financial information from other state government agencies, from tips or complaints, or from media coverage or other public information highlighting tax issues."
Ms. O'Donnell said the explanation from Delaware's tax office "simply raises more questions."
"It all points to a need to continue the investigation to get to the bottom of this," she said.
Mr. George also told Mr. Grassley that his office is investigating two other allegations that political candidates were targeted for IRS audits.
The Iowa Republican has asked the Justice Department to respond to him by Friday on the matter. A spokesman for the Justice Department said in an email that they have received Mr. Grassley's request and are reviewing it, declining further comment.
Oversight Committee ranking member Elijah Cummings, Maryland Democrat, was also irked that Mr. George apparently intervened and blocked the release of further information about possible political targeting to the oversight committee. Mr. George said he did so because he received conflicting information about whether the information could be released and that he wanted to err on the side of caution in not releasing sensitive taxpayer records.
Though there is still no indication the tax-scrutiny fiasco went as far up as the White House, the bipartisan interest indicates that it is unlikely to fade away anytime soon.
"[N]obody's trying to attack you or anybody else — just trying to get to the facts," Mr. Cummings told Mr. George at the oversight committee hearing last week. "This is our watch. This is it. I've said over and over again, we don't know how long we are going to be here."