IRS fires top aide linked to Obama-era Tea Party targeting scandal

EXCLUSIVE: A top aide and confidante to former Obama official Lois Lerner who targeted conservatives and conservative groups was fired by the Internal Revenue Service, Fox News Digital has learned.

Sources told Fox News Digital that Holly Paz, who served as the IRS Commissioner of Large Business and International Division, was terminated Monday.

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Paz was placed on administrative leave last month and was subsequently fired following an internal review, sources say.

Paz had served as Lerner’s deputy during the Obama administration.

In 2013, it was revealed that the IRS, under Lerner, had wrongfully scrutinized tax-exempt applications related to the phrases “Tea Party,” “9/12” and “Constitution.” The Treasury’s inspector general later confirmed “inappropriate criteria” were used to target conservative groups and criticized ineffective oversight of systemic bias.

The IRS reportedly spent more than two years targeting conservative tax-exempt groups. 

Paz reviewed and helped oversee the handling of tax-exempt applications, and has been described as a key link between the Cincinnati, Ohio IRS office where the screenings of applications took place and the IRS headquarters.

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Her dismissal followed scrutiny from lawmakers over a subordinate work unit aimed at auditing pass-through businesses that Biden-era Commissioner Danny Werfel had created and assigned her to lead.

Werfel called the new work unit a big step in “ensur[ing] the IRS holds the nation’s wealthiest filers accountable,” and Paz called it an “important change” in the IRS structure.

The Trump administration, after years of litigation, in 2017, settled lawsuits with Tea Party and other conservative groups who say they were unfairly targeted by the IRS under the Obama administration. 

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Lerner and Paz, at the time, asked the federal courts to keep their testimonies in the Tea Party targeting case private forever, over fear of death threats.

The targeting scandal drew heavy attention in 2013 after the IRS admitted it applied extra scrutiny to conservative groups applying for nonprofit status. Lerner became the public face of the scandal, though many other IRS officials, like Paz, were also involved.

In a 2017 settlement, the IRS offered an apology, saying the agency “admits that its treatment of Plaintiffs during the tax-exempt determination process, including screening their applications based on their names or policy positions, subjecting those applications to heightened scrutiny and inordinate delays, and demanding some Plaintiffs’ information that TIGTA determined was unnecessary to the agency’s determination of their tax-exempt status, was wrong.”

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“For such treatment, the IRS expresses its sincere apology,” the IRS said at the time. 

While the Treasury Department did not comment on the move to fire Paz, it represents the latest step in Secretary Scott Bessent’s efforts to “de-weaponize” the IRS in his role as acting commissioner.

Fox News Digital has learned that Bessent has been working closely with Hunter Biden whistleblowers Gary Shapley and Joseph Ziegler, and has met several times with IRS leadership.

Sources told Fox News Digital that Bessent and IRS officials are working to improve customer service and outcomes for American taxpayers. They are also working to streamline technical improvements, and cut back on bloated hiring from the Biden administration.

Fox News Digital’s Charles Creitz contributed to this report.