Politics

EXCLUSIVE: IRS Official Involved In Obama-Era Tea Party Scandal Quietly Running Key Tax Division

Screen Capture/PBS NewsHour

A government watchdog group is calling for the job of an Internal Revenue Service (IRS) official who played a part in a major-Obama era scandal at the agency before being promoted by the Biden administration now runs a key division of the tax collection agency.

Holly Paz was former IRS Commissioner Lois Lerner’s top deputy at the agency as Lerner and the Obama IRS allegedly targeted political opponents, and she is currently listed on the IRS website as the commissioner of the agency’s Large Business and International Division. The American Accountability Foundation (AAF) — a right-of-center government watchdog group — called for Paz’s job given her connections to an infamous instance of the federal government treating American taxpayers differently based on political affiliation, according to a letter sent Thursday to Treasury Secretary Scott Bessent obtained by the Daily Caller News Foundation.

“The American Accountability Foundation has launched an investigation into the Internal Revenue Service (IRS) for issues pertaining to partisanship and its continued targeting of conservatives,”  AAF wrote in its letter to Bessent. “Our first finding of this investigation is that the former top deputy to Louis Lerner — Holly Paz — regained a high-ranking position within the IRS during the Biden Administration. Paz was placed on leave and ousted from her role at the IRS in 2013 amid allegations she targeted conservative organizations seeking tax-exempt status.”

AAF Letter on Holly Paz by Nick Pope

“With allegations that the IRS maintains political bias and is still targeting conservatives, Paz cannot be allowed to maintain a role in the IRS,” the letter concludes. “Taxpayers deserve to have faith in those that receive a government salary and Paz has proved undeserving of the honor to serve the American public. The American Accountability Foundation will continue to investigate IRS leadership and implores the Trump administration to root out any anti-conservative partisan bias at the IRS.”

The Large Business and International Division — which Paz currently oversees — is “responsible for tax administration activities for domestic and foreign businesses with a United States tax reporting requirement and assets equal to or exceeding $10 million as well as the Global High Wealth and International Individual Compliance programs,” according to the IRS.

The Tea Party scandal centered around allegations that the Obama IRS subjected conservative organizations seeking tax-exempt status to extensive scrutiny that was not applied equally to progressive groups applying for the same, with the IRS ultimately apologizing in 2017 for its conduct.

Paz was a top deputy to Lerner at the IRS until she was replaced in 2013 following the Tea Party controversy. She appears to have re-joined the agency sometime during the Biden administration.

During her first stint at the IRS, Paz personally reviewed between 20 and 30 “Tea Party” applications. Many of the applications Paz reviewed were effectively put on hold for more than a year.

Paz — who once donated thousands to the 2008 Obama campaign — testified to congressional investigators in May 2013 that “political campaign intervention in 501(c)(4)s was not something we had previously dealt with very much” at the IRS, according to the House Oversight and Accountability Committee. That testimony conflicted with an internal IRS email discovered by investigators in which Paz wrote that she expected the IRS to approve applications of most Tea Party groups because “this is not a new issue for the agency.”

Additionally, Paz told investigators that “Tea Party” was a catch-all phrase for political organizations seeking tax-exempt status, not unlike “Kleenex” being used as a catch-all colloquial phrase to describe tissues, according to the House Oversight and Accountability Committee. However, several other employees at the Cincinnati IRS office disputed that testimony, with one of the employees telling investigators that applications of liberal or left-wing groups seeking tax-exempt status were not put into “general inventory” or otherwise scrutinized excessively.

Republican investigators also highlighted other inconsistencies in Paz’s testimony, such as the timelines she offered for when D.C.-based IRS personnel became aware of controversial changes to the agency’s “be on the lookout” list and when she herself became aware of inappropriate targeting of Tea Party groups, according to the House Oversight and Accountability Committee.

The Treasury Department and Paz did not respond to requests for comment.