Internal Revenue Service officials in Washington scrutinized the very first application from a tea party group seeking tax-exempt status — and dozens of others, including some requests that languished for more than a year without action, an IRS official has told congressional investigators.
Holly Paz, who until recently was a top deputy in the division that handles applications for tax-exempt status, told congressional investigators she reviewed 20 to 30 applications after learning that field agents had stopped working on them. Her assertions contradict initial claims by the agency that a small group of agents working in an office in Cincinnati were solely responsible for mishandling the applications.
Paz, however, provided no evidence that senior IRS officials ordered agents to target conservative groups or that anyone in the Obama administration outside the IRS was involved.
Instead, Paz described an agency in which IRS supervisors in Washington worked closely with agents in the field but didn’t fully understand what those agents were doing. Paz said agents in Cincinnati openly talked about handling “tea party” cases, but she thought the term was merely shorthand for all applications from groups that were politically active — conservative and liberal.
Paz said dozens of tea party applications sat untouched for more than a year while field agents waited for guidance from Washington on how to handle them. At the time, she said, Washington officials thought the agents in Cincinnati were processing the cases.
Paz was among the first IRS employees to be interviewed as part of a joint investigation by the House Oversight and Government Reform Committee and the House Ways and Means Committee.
Congressional investigators have interviewed at least six IRS employees as part of their inquiry. The Associated Press has reviewed transcripts from three interviews — with Paz and with two agents, Gary Muthert and Elizabeth Hofacre, from the Cincinnati office.
The IRS declined comment for this story.
Republican and Democratic staffers are working together on the investigation. Nevertheless, it is starting to take on a partisan tone.
Rep. Elijah Cummings (D-Md.) accused the Republican chairman of the House oversight committee of selectively leaking transcripts of the interviews. Cummings is the ranking Democrat on the committee and Rep. Darrell Issa (R-Calif.) is the chairman.
“Another week, another leak from chairman Issa of cherry-picked excerpts that show no White House involvement whatsoever in the identification and screening of these cases,” Cumming said. “By leaking transcript portions that omit key details from the accounts witnesses provided to the committee, chairman Issa has now drawn condemnation even from House Republicans working with him on this very investigation.”
Since the revelations became public last month, much of the agency’s leadership has been replaced and the Justice Department has started a criminal investigation. Both Paz and her supervisor, Lois Lerner, who headed the division that handles applications for tax-exempt status, have been replaced.