IRS Supervisor Clarifies Washington Role in Tax-Exempt Targeting

An Internal Revenue Service supervisor at the center of the tax-exempt applications process that erupted in political scandal in May has contradicted agency assertions that the mishandling was confined to an office in Cincinnati, but she offered no evidence that top IRS or Obama administration officials directed the added scrutiny.

As reported by the Associated Press on Monday, Holly Paz, who recently left her Washington post as a top deputy in the exempt organizations division, told congressional interviewers she reviewed some 20-to-30 of the applications from tea party and other conservative groups whose applications were delayed.

According to AP’s review, transcripts from the joint investigation by the House Oversight and Government Reform Committee and the Ways and Means Committee show that “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,” wrote reporter Stephen Ohlemacher.

Six IRS staff have been interviewed so far by the committee. AP examined the transcripts of three of them, namely Paz, and the Cincinnati office's Gary Muthert and Elizabeth Hofacre.

“It’s very fact-and-circumstance intensive. So it’s a difficult issue,” said Paz, who said the scrutiny began in February 2010. “Oftentimes what we will do, and what we did here, is we’ll transfer it to (the technical unit), get someone who’s well-versed on that area of the law working the case so they can see what the issues are,” the transcript said. “The goal with that is ultimately to develop some guidance or a tool that can be given to folks in (the Cincinnati office) to help them in working the cases themselves.”

Paz added that her IRS colleagues are not political and were sorting the applications using the shorthand rhetoric of the groups under the assumption that it was for internal purposes only. “Because they are so apolitical, they are not as sensitive as we would like them to be as to how things might appear,” Paz said, according to the AP.

Meanwhile, the interviewing continues to prompt partisan friction between House Oversight Chairman Darrell Issa, R-Calif., and Ranking Minority Member Rep. Elijah Cummings, D-Md., over whether to release the transcripts in excerpts or in their entirety.

Over the weekend, Issa said that as the interviews continue, "We're learning about…officials who had reason to believe something was very wrong but tried keep that under wraps for as long as possible.” Cummings, who has threatened to release the full transcripts if Issa does not do so by Monday, said Issa was leaking"cherry-picked excerpts that show no White House involvement whatsoever in the identification and screening of these cases."