UPDATE: The Atlantic is focusing on chief counsel, too:
The focus will now become whether or not IRS commissioner Doug Shulman knew about the questions when he testified that no Tea Party groups were being targeted for unfair scrutiny in front of Congress in 2012. The report doesn't shay [sic] whether or not Shulman was informed about the Tea Party questioning, but it does show the IRS's chief counsel was. It's standard procedure for the counsel and commissioner to discuss this sort of thing before a Congressional hearing. Shulman's term as head of the IRS ended at the end of last year and he was appointed by President Bush. But Obama has yet to announce a replacement.
UPDATE 2: Apparently the Inspector General report has been leaked (here's the timelines) and here are the two key entries regarding the lawyer who knew something:
August 4, 2011: Rulings and Agreements office personnel held a meeting with Chief Counsel so that everyone would have the latest information on the issue.
August 4, 2011: A Guidance Unit specialist asked if Counsel would review a check sheet prior to issuance to the Determinations Unit. The Acting Director, Rulings and Agreements, responded that Counsel would review it prior to issuance.
Another thing I found odd was the IRS's decision to disclose its bad behavior at an ABA conference. I wonder who thought that that was the right time and place for revealing the abuse?