Agency officials told congressional aides that Lerner was placed on administrative leave. They did not disclose the status Paz, other than to say she was replaced June 7.
Lerner is the IRS official who first disclosed the targeting at a legal conference May 10. That day, she told The AP: "It's the line people that did it without talking to managers. They're IRS workers, they're revenue agents."
On May 22 — the day after Paz was interviewed by investigators — Lerner refused to answer questions from lawmakers at a congressional hearing, citing her Fifth Amendment right not to incriminate herself.
Paz told congressional investigators that an IRS agent in Cincinnati flagged the first tea party case in February 2010. The agent forwarded the application to a manager because it appeared to be politically sensitive, Paz said. The manager informed Paz, who said she had the application assigned to a legal expert in Washington.
At the time, Paz headed a technical unit in Washington that provided guidance to agents who screened applications for tax-exempt status. The agents worked primarily in Cincinnati. One of their tasks was to determine the applicant groups' level of political activity.
IRS regulations say tax-exempt social welfare organizations may engage in some political activity but their primary mission cannot be influencing the outcome of elections. It is up to the IRS to make that determination.
"It's very fact-and-circumstance intensive. So it's a difficult issue," Paz told investigators.
"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," Paz 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."