UPDATE: Contrary to reports from IRS sources, the agency’s former director of the Office of Rulings and Agreements, Holly Paz, has been placed on administrative leave, according to her lawyer, not fired. The lawyer, Roel Campos, maintains that Paz is not guilty of any wrongdoing. “Holly Paz did nothing wrong and in fact she was an ideal employee, an ideal public servant,” he told the Wall Street Journal. Paz was replaced in her position as director of Rulings and Agreements in early June.


ORIGINAL POST: An IRS source says that the Internal Revenue Service has fired Holly Paz, the director of the agency’s Rulings and Agreements office. The source says Paz was fired last Friday, and a second IRS source tells National Review Online that Paz “dropped off the edge of the world” that day, and that her agency-issued computer, phone, and Blackberry show no activity since then. The IRS would not confirm or deny reports of Paz’s firing, citing her right to privacy as protected by federal law.

As of Thursday, the voice mail on Paz’s work phone remains active and callers are asked to leave a message for Paz, though nobody answered repeated calls placed to that number. Calls to the mobile phone number listed under Paz’s name in the IRS’s internal directory are sent straight to voice mail, and indicate her mailbox has not yet been set up.


As the director of Rulings and Agreements, Paz served as the first line of management in Washington, D.C., that oversaw both the tax-law specialists who provided guidance to agents in Cincinnati reviewing tea-party applications and the Determinations Unit in Cincinnati charged with processing those applications. Paz has served in that position since January 2011, reporting directly to Lois Lerner, with the exception of a four-month period between October 2011 and January 2012 when she reportedly was on maternity leave. Lerner, the director of the IRS’s Exempt Organizations division was on May 23 placed on paid leave.

Paz became the subject of controversy when, in an interview with the House Oversight Committee, she revealed that she participated in an IRS internal investigation about the agency’s discrimination against tea-party groups and was aware of its findings, which emerged a year before the inspector general’s report and reached similar conclusions. Paz, however, did not notify Congress of those findings.



Lawmakers have also raised eyebrows at the fact that Paz was present when members of the inspector general’s team interviewed her subordinates during the course of their investigation. In a May 23 Oversight Committee hearing, chairman Darrell Issa expressed his astonishment, saying he was “shocked” to find that Paz “participated in virtually every one of the interrogations or interviews with her own subordinates.” He added: ”In those, of course, one of the questions the IG had to ask was, ‘Did anyone tell you to do this?’ If that question was asked, their own superior was in the room.”

Even the ranking member of the committee, Democrat Elijah Cummings, no fan of Issa’s investigations into the administration’s misconduct, had harsh words for Paz. “It sounded like Ms. Paz felt like she needed to be in the room because she wanted to be able to defend herself – or the agency, I don’t know – based on what may have been said or the information gathered in that interview,” Cummings told inspector general J. Russell George. “Usually when you are conducting an investigation . . . you want to keep your witnesses separate because you’re in search of the truth and you are trying to make sure there’s no advantage of a person hearing what somebody else said.”


According to Issa, Paz told the committee that either she or Lois Lerner requested to listen in on the interviews. He read from the committee’s interview transcript, quoting Paz: “I can’t remember if I made the request or Lois Lerner made the request, but we discussed that in order for the IRS to be able respond to the report, we had to understand what information [the inspector general] had and what they were being told.”


If Paz has indeed been let go, she would be the first employee fired by the IRS in connection with the targeting of conservative groups.


Others have either retired or been placed on administrative leave, including Washington lawyer Carter Hull, who has been accused of micromanaging the processing of tea-party cases, and who, according to IRS sources, requested his retirement package on March 12; Joseph Grant, the commissioner of the agency’s Tax-Exempt and Government Entities division and Lois Lerner’s boss, who retired on June 3 just days after receiving a promotion; former IRS commissioner Steven Miller, who resigned days after news of the scandal broke; and the director of the IRS’s Exempt Organizations division, Lois Lerner, who was placed on paid administrative leave after refusing to tender her resignation.