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IRS official at center of scandal put on leave

Committee Chairman U.S. Representative Darrell Issa (R-CA) holds a House Oversight and Government Reform Committee hearing on alleged target
Committee Chairman U.S. Representative Darrell Issa (R-CA) holds a House Oversight and Government Reform Committee hearing on alleged target

By Kim Dixon and Patrick Temple-West

WASHINGTON (Reuters) - Lois Lerner, an Internal Revenue Service official at the center of the scandal over the agency's extra scrutiny of conservative groups, was put on administrative leave on Thursday after she refused to resign, a senator said.

Republican Senator Charles Grassley of Iowa said new acting IRS Commissioner Daniel Werfel asked for Lerner's resignation.

An IRS spokesman declined to comment on Lerner's status, citing privacy concerns. However, an internal memo supplied by the agency named Lerner's replacement.

An aide to Grassley said Werfel spoke with Grassley's office on Thursday afternoon and conveyed the information.

A bipartisan chorus in Congress had been calling for her to go. Democratic Senator Carl Levin and Republican Senator John McCain had written to Werfel earlier on Thursday calling for her to be removed.

The move comes one day after a defiant Lerner refused to answer questions during a House of Representatives panel hearing into why workers in a Cincinnati, Ohio, field office of the IRS in early 2010 began targeting conservative groups for extra scrutiny when they applied for tax exempt status.

Lerner oversaw the tax-exempt division.

Her lawyer, William Taylor, did not immediately respond to a request for comment late on Thursday.

Lerner is seen as a key figure in the unfolding scandal that has spawned a Justice Department criminal probe and become a distraction for President Barack Obama as he pursues an ambitious second-term agenda.

Three congressional hearings over the past week have failed to reveal who at the IRS was responsible for the targeting that occurred for roughly 18 months.

On Wednesday, Lerner denied she had done anything wrong, but asserted her constitutional right against self-incrimination.

House Oversight and Government Reform Chairman Darrell Issa has accused Lerner of providing "false or misleading information" to his committee on four occasions last year.

Lerner was the official who first publicly acknowledged the targeting by responding to a planted question about the topic at an American Bar Association conference on May 10.

The admission came before a Treasury Department inspector general report found that workers in the Cincinnati office used "inappropriate criteria" such as the terms "Tea Party" and "Patriots" to target the applications of conservative groups for intense scrutiny.

Lerner was alerted in June 2011 that partisan criteria were being used, and she ordered them changed. They were then changed back in January 2012 to again focus on the policy positions of organizations, but is it not clear who changed them.

"From all accounts so far, the IRS acting commissioner was on solid ground to ask for her resignation," Grassley said in a statement.

He added that Lerner "shouldn't be in limbo indefinitely on the taxpayers' dime."

Werfel, a White House budget official who officially started at the IRS on Wednesday, announced Lerner's replacement in an employee memo on Thursday.

Ken Corbin, a deputy director in charge of the wage and investment division at the IRS, will take over as acting director of the tax exempt organizations unit, Werfel said, without acknowledging Lerner.

Werfel himself took over for Acting Commissioner Steve Miller, who was fired by President Barack Obama over the controversy last week.

(Reporting By Kim Dixon and Rachelle Younglai; Editing by Karey Van Hall and Tim Dobbyn)

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