The Internal Revenue Service has initiated termination proceedings against a senior official with ties to the Obama-era Tea Party targeting controversy.
According to Fox News, Holly Paz, who served as the IRS Commissioner of the Large Business and International Division, received a notice of proposed removal on Monday after being placed on administrative leave. The termination notice gives Paz 30 days to respond before any final decision regarding her employment status is made.
Sources familiar with the situation revealed that the proposed removal follows an internal review of Paz's leadership role in a new work unit focused on auditing pass-through businesses. The unit had drawn scrutiny from lawmakers who expressed concerns about the potential targeting of conservative entities.
Paz previously served as deputy to Lois Lerner during the 2013 IRS targeting controversy that rocked the Obama administration. The scandal erupted when it was discovered that conservative groups seeking tax-exempt status faced additional scrutiny based on specific keywords in their applications.
The Treasury's inspector general confirmed that "inappropriate criteria" were used to target conservative organizations applying for tax-exempt status during that period. The targeting specifically focused on groups with phrases like "Tea Party," "9/12," and "Constitution" in their names.
Paz played a crucial role as the connection between the Cincinnati IRS office, where the application screenings occurred, and the IRS headquarters in Washington. Her involvement in overseeing these applications made her a key figure in the controversy.
The targeting scandal resulted in extensive litigation, culminating in a 2017 settlement between the IRS and affected conservative groups. The agency issued a formal apology acknowledging their wrongful treatment of these organizations.
Both Lerner and Paz previously requested federal courts to permanently seal their testimonies in the Tea Party targeting case. Their attorneys cited concerns about potential death threats as the primary reason for seeking continued confidentiality.
The controversy led to significant reforms within the IRS and sparked ongoing debates about the agency's impartiality. These discussions continue to influence current IRS policies and procedures.
Current Treasury Secretary Scott Bessent has made "de-weaponizing" the IRS a priority of his tenure as acting commissioner. His efforts include regular meetings with IRS leadership and whistleblowers.
Bessent's reform agenda focuses on improving taxpayer services and streamlining technical operations. His administration has also begun reviewing hiring practices implemented during the Biden presidency.
The Treasury Department has emphasized its commitment to ensuring fair and unbiased treatment of all taxpayers. These efforts aim to restore public trust in the agency's operations.
The proposed removal of Holly Paz represents a significant development in the IRS's ongoing transformation. Her current employment status remains active while on administrative leave, pending the completion of the review process.
The IRS leadership continues to work closely with Secretary Bessent to implement reforms aimed at preventing future targeting controversies. These changes include enhanced oversight mechanisms and improved internal controls.
The agency faces the challenge of balancing effective tax administration with ensuring fair treatment for all taxpayers, regardless of their political affiliations. This latest action demonstrates the ongoing efforts to address past controversies while moving forward with institutional reforms.