IRS official on leave refused to resign, GOP senator says

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Lois Lerner denied any wrongdoing in IRS targeting

Agency official refused to testify over scandal

WASHINGTON – First she refused to testify. Now Lois Lerner, the IRS official at the center of the tax agency scandal, is refusing to resign, according to a top Republican senator.

Sources confirmed to Fox News earlier Thursday that Lerner, the head of the IRS division that oversaw the unit targeting conservative groups, had been placed on administrative leave, with pay.

But Sen. Charles Grassley, R-Iowa, claimed she was only put in that status after refusing to step down.

He said the commissioner was in his right to demand her resignation, and said taxpayers should not continue to pay her salary indefinitely.

“My understanding is the new acting IRS commissioner asked for Ms. Lerner’s resignation, and she refused to resign.  She was then put on administrative leave instead,” Grassley said in a statement. “The IRS owes it to taxpayers to resolve her situation quickly.  The agency needs to move on to fix the conditions that led to the targeting debacle."

Capitol Hill sources said Lerner, the director of exempt organizations, was placed on paid leave Thursday, amid calls from some lawmakers for her to be suspended or fired. In her absence, Ken Corbin, the current deputy director of the submission processing, wage and investment division, will take over her duties, according to an internal IRS memo obtained by Fox News.

Lerner, the official who first acknowledged the controversial IRS practice earlier this month, asserted her innocence at a House hearing on Wednesday. She then refused to testify, citing her Fifth Amendment right against self incrimination. The move angered many who say she should have been forced to answer why the tax agency targeted conservative groups applying for tax exempt status.

Republican leaders of that committee, though, now say she waived that right by giving a statement and want to haul her back to testify.

Pressure has been mounting on the administration to take tough action against Lerner, after two other IRS officials were pushed out in the wake of the scandal.

In a letter earlier Thursday to IRS Acting Commissioner Daniel Werfel, Sens. Carl Levin, D-Mich., and John McCain, R-Ariz., asked the agency to remove Lerner from office and said they had “lost confidence in her ability to fulfill her duties.”

It's unclear whether Republicans will succeed in trying to recall her before the House Oversight and Government Reform Committee. Rep. Darrell Issa, R-Calif., chairman of the panel, said through an aide Thursday that her Fifth Amendment assertion is "no longer valid," since she delivered remarks at the start of Wednesday's hearing.

That hearing was never technically adjourned, and Republicans hope to bring her back.

Others, though, say she was in her right to defend herself and subsequently invoke the right to remain silent.

The IRS has had a series of missteps that have not only publicly marred the reputation of the IRS, but also called into question what the White House knew about the scandal and when they knew it.

Separately, Tea Party-related groups who claim they were targeted by the tax agency have started filing lawsuits this week against the IRS. In some cases they are asking for the IRS to admit wrongdoing. In others, they are seeking monetary claims.

"It's extremely troubling that it has taken this long for Lois Lerner to removed from the top exempt position at the IRS,” Jay Sekulow, chief counsel of the American Center for Law and Justice, the group suing on behalf of some Tea Party groups, said in a statement to FoxNews.com.

Sekulow said instead of putting Lerner on administrative leave, his group is calling for her to be fired.

Fox News' Chad Pergram contributed to this report.