The Senate voted to approve President Joe Biden’s nominee for IRS commissioner, someone who will oversee the controversial rollout of $80 billion in new funding for the agency.
The lawmakers voted 54-42 on a bipartisan basis to approve Biden’s nominee, Danny Werfel. Sen. Joe Manchin (D-WV) voted against confirmation, the only Democrat to do so, out of protest of the Biden administration's handling of tax rules for electric vehicle subsidies meant to encourage domestic production.
Werfel, who served as the acting commissioner of the agency in 2013, will have the big and highly scrutinized role of implementing the IRS’s biggest cash infusion in years.
Democrats contend that the agency has been underfunded for years and that the added monies will help it raise more tax revenue and improve customer service. Republicans have argued that the funds will be used to audit working-class families and will result in IRS overreach, given the tax collection agency’s past scandals.
Still, Werfel assured Republicans during his confirmation hearing that the IRS would not start increasing audits on those earning less than $400,000 annually.
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He said that Treasury Secretary Janet Yellen has already publicly committed to stopping a surge in small business audits and audits for those earning below $400,000. Werfel testified that he is “committed to meeting” Yellen’s directive.
“Therefore, if I am fortunate enough to be confirmed, the audit and compliance priorities will be focused on enhancing the IRS’s capabilities to ensure that America’s highest earners comply with applicable tax laws,” Werfel said. “Also front and center will be efforts to modernize and dramatically improve taxpayer service.”
Despite the vows from Yellen and Werfel, the issue has accumulated a lot of political capital for the GOP. Republicans have pointed to a 2021 Joint Committee on Taxation analysis about revenue from underreported income that indicated that those earning below $400,000 could be on the hook for bigger tax bills.
The analysis found that of the revenue projected to be raised from underreported income, 40% to 57% would come from taxpayers earning $50,000 or less, 78% to 90% would come from taxpayers making less than $200,000 annually, and just 4% to 9% would come from those earning more than $500,000 per year.
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After leaving the IRS in 2013, Werfel worked for the Boston Consulting Group. Previously, he had worked in the White House Office of Management and Budget under President Barack Obama. He has degrees from Duke, the University of North Carolina, and Cornell.
Werfel replaces Charles Rettig, who served as commissioner from October 2018 to November of last year. Under Rettig’s tenure, the IRS had one of its biggest scandals in recent memory when the tax returns of thousands of the nation’s wealthiest people were released to an investigative nonprofit in a still-unexplained leak.
Republicans, who just retook control of the House, are planning to keep a watchful eye on the IRS and leadership has told the Washington Examiner to expect hearings and aggressive oversight heading into the new Congress.