IRS blast from troubled past tapped as next commissioner

November 10, 2022
IRS Acting Commissioner Werfel TIGTA George Tea Party hearing 2013 CSPAN screenshot

Daniel Werfel, then IRS Acting Commissioner, and Treasury Inspector General for Tax Administration J. Russell George testified before Congress in June 2013 about the IRS' questionable nonprofit status approval practices. (C-SPAN hearing screenshot)

The Internal Revenue Service apparently will be led by a blast from its past, notably its troubled past.

Daniel Werfel is President Joe Biden's choice for commissioner of the Internal Revenue Service.

Werfel is most familiar to the tax and wider world as the man who filled the IRS' top role in 2013 in an interim capacity during the agency's nonprofit authorization scandal.

In charge during troubling IRS times: Conservative, predominantly Tea Party organizations, complained their applications for tax-favored 501(c)(4) status were delayed or denied because of their political positions.

An investigation by the Treasury Inspector General for Tax Administration (TIGTA) confirmed that the conservative groups were on a be on the lookout list, as were some progressive/liberal groups. The mishandling of the tax status applications cost one IRS exec her job, and led to months of Capitol Hill hearings and political recriminations.

The ignominious IRS incident finally died down in 2014, when the FBI refused to file any criminal charges.

Werfel was in the IRS hot seat during much of that. He served as interim IRS commissioner for seven months until John Koskinen was confirmed as the agency's 48th chief. 

Other executive experience: In announcing his intent to nominate Werfel, President Biden cited Werfel's IRS tenure during the tax agency's troubled period.

"In the wake of an Inspector General report alleging various forms of mismanagement and bias in the determination of tax-exempt status for non-profit organizations, President Obama appointed Werfel to serve as Acting Commissioner of IRS in 2013. Werfel provided immediate stability to the IRS, effectively responding to numerous Congressional investigations," said Biden.

Werfel also had served in presidential administrations in less tumultuous times.

Before temporarily taking on the IRS top role in 2013, Werfel served as Controller of the Office of Management and Budget (OMB) in President Barrack Obama's administration. Werfel held dual OMB duties, also serving as the executive office's Acting Deputy Director for Management, until taking the IRS interim commissioner posting.

Previously, Werfel was OMB Acting Controller during under President George W. Bush.

Werfel currently leads the public sector practice at Boston Consulting Group.

Timing of new IRS job: If confirmed by the U.S. Senate, likely next year, Werfel will be the agency's 50th commissioner.

He will succeed IRS Commissioner Charles Rettig, who's today is finishing up his last working day as the agency's leader. As one of his final acts as IRS head honcho, Rettig sent a farewell message to agency employees and taxpayers. OK, Rettig officially is on Uncle Sam's payroll through Nov. 12, but that's Saturday, and tomorrow is the federal Veterans Day holiday so the agency is closed.

Acting IRS Commissioner Douglas O'Donnell, tapped as interim IRS chief last month, will serve until Werfel is confirmed.

Tough confirmation questions: Despite Werfel's service in both Democratic and Republican administrations, don't expect his confirmation to be quick or easy.

The IRS Tea Party nonprofit scandal will be rehashed. Add to that the latest political strife the IRS is facing.

The IRS received nearly $80 billion over 10 years under the Inflation Reduction Act. Anti-IRS forces, including most Republicans on Capitol Hill, argue that such money will enable the IRS to exert dangerous power, especially regarding audits, over U.S. taxpayers.

Treasury Secretary Janet Yellen quickly responded to the unfounded charges that the IRS would weaponize audits.

"As the Commissioner of the IRS reiterated in a recent letter, audit rates on households making under $400,000 won't go up relative to recent years – in fact, they will likely see the chance of an audit decline," said Yellen. "Instead, new funding will crack down on tax evaders among the wealthy and large corporations, invest in technology upgrades that help taxpayers, and hire more customer support staff to prevent backlogs."

You can be sure, however, that the audit issue, and prior nonprofit status ones, will come up during Werfel's confirmation hearing. And he could face a tough time if the eventual midterm election outcome returns the Senate to GOP control.

You also might find these items of interest:

 

Advertisements

 

 

 

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
The latest Dirty Dozen tax scam list is familiar because too many are still falling for the schemes

March 5, 2026

Tax filing season is also peak time for tax scams. Be on the lookout for…

Read More
Hello Tax Season 2026

Happy New Tax Year! Are you ready to file your 2025 tax return? I know, too early to ask. But Tax Day 2026 will be here before we realize it. The Internal Revenue Service deadline to file and pay any tax we owe is the regular April 15 date this year. It’s also Tax Day for most of the states that collect income taxes from their residents, which is most of the states! If that seems too far away right now, don’t worry. As is the case every tax season, the ol’ blog’s tips and other tax reminders should help all of us meet our state and federal responsibilities. Procrastinators also will want to keep an eye on the countdown clock just below. It tracks how much time we have until April’s Tax Day, just in case we put off our annual tax task until the absolutely final hours and decide we need to instead get an extension request into the IRS by that date. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
Leave the first comment