The Senate has voted to confirm John Koskinen as the next Internal Revenue Service commissioner, succeeding acting commissioner Daniel Werfel, who was brought in to help reform the beleaguered tax agency.
Koskinen was confirmed Friday by a vote of 59 to 36 after Senate Democrats recently overhauled the filibuster rules to overcome the hurdles to approving President Obama’s nominees for federal judges and administration officials.
Koskinen, 74, was formerly the chairman of Freddie Mac, leading the housing finance lender from 2008 to 2011 in the aftermath of the financial crisis and the collapse of the mortgage industry. It is hoped he will be able to also help revive the IRS after a series of scandals erupted in the past year following revelations that the IRS had given extra scrutiny to applications for tax-exempt status from conservative groups with “Tea Party” and “Patriot” in their names, as well as liberal groups with “Progressive” and “Occupy” in their names.
The uproar led to the departures of a number of high-ranking IRS officials, including acting commissioner Steven T. Miller, who had succeeded the last commissioner to win confirmation from the Senate, Douglas Shulman. The IRS has been without a confirmed commissioner since Shulman left in November 2012. The IRS will also be facing challenges in the years ahead with administering the tax credits and penalties for the Affordable Care Act.
“I applaud the bipartisan majority of Senators who today confirmed John Koskinen as the next commissioner of the Internal Revenue Service,” said President Obama in a statement. “John has decades of private and public-sector experience, and he has led institutions in challenging times. Throughout his career, John has always acted with the absolute integrity Americans demand from those in public service, and his strong leadership and unquestioned expertise make him the right person to lead the IRS. I want to thank Daniel Werfel for his outstanding service as principal deputy commissioner of the IRS, and I look forward to working with John as he takes on this new role. “
Senate Finance Committee chairman Max Baucus, D-Mont., praised Koskinen’s confirmation Friday, the same day that Baucus was nominated by President Obama to become ambassador to China (see Baucus Nominated as Ambassador to China).
“John Koskinen has an excellent record of public service and leadership in demanding roles,” Baucus said in a statement. “This is a critical time to have someone with Mr. Koskinen’s expertise in charge of the IRS. We need a confirmed commissioner to begin winning back the public’s trust and manage the ongoing implementation of the Affordable Care Act. I am confident he is up to the task.”
During a committee hearing to consider his nomination last week, Baucus called on Koskinen to restore public trust in the IRS following the Inspector General’s report on the agency’s handling of applications for 501(c)(4) tax-exempt status. In addition, Baucus said Koskinen must work to oversee the implementation of the Affordable Care Act and provide input on the committee’s continuing efforts to overhaul the tax code. The Finance Committee approved his nomination by voice vote on December 13 (see Obama IRS Nominee Koskinen Approved).
Koskinen served as non-executive chairman of Freddie Mac from 2008 to 2011 and acting CEO in 2009. He was also deputy mayor and city administrator of Washington, D.C., from 2000 to 2003, assistant to the president and chair of the President’s Council on Year 2000 Conversion from 1998 to 2000, and deputy director for management at the Office of Management and Budget from 1994 to 1997. He also has extensive experience in the private sector. Koskinen received a B.A. from Duke University and an L.L.B. and J.D. from Yale University School of Law.
Treasury Secretary Jacob Lew also offered praise for Koskinen. “I am pleased the Senate took bipartisan action to confirm John Koskinen as the next Commissioner of the Internal Revenue Service,” Lew said in a statement. “From turning around large private sector organizations, like the Penn Central Railroad, to tackling obstacles facing the government, including the Y2K challenge, John’s distinguished career has prepared him to assume this important position at this critical time. I have known John ever since we worked together at the Office of Management and Budget during the Clinton administration, and we are fortunate he is returning to public service.”
Lew said that Koskinen shares his commitment to continuing to rebuild the public’s trust in the IRS. “The work of the IRS, which is carried out by dedicated public servants, touches virtually every American, and we need someone at the helm who brings both a strong commitment to high quality customer service and the practical abilities to strengthen the agency,” said Lew. “Not only is John that person, he is someone with a great deal of integrity who has earned bipartisan support over the decades for achieving results on behalf of Democratic and Republican Presidents.”
In addition, Lew thanked Werfel for staying at the interim post longer than he had planned to help reform the IRS. Werfel was brought in from the Office of Management and Budget after the departure of former acting commissioner Steven T. Miller.
“I also want to thank Danny Werfel for his tremendous work as acting commissioner of the IRS,” said Lew. “During trying times, Danny has been extraordinarily successful at taking on a very difficult task and moving the agency in the right direction. He acted swiftly to root out problems and reshape the management structure at the IRS. Danny even remained in this position much longer than he had planned in order to provide a seamless transition in leadership. As a longtime career civil servant and as a policy official, he has consistently put his nation first. Danny’s achievements over the past several months are a testament to his tireless dedication and long history of excellence.”
Colleen Kelly, president of the National Treasury Employees Union, which included IRS employees, also looked forward to working with Koskinen.
“With Senate approval of John Koskinen as commissioner of the Internal Revenue Service, NTEU looks forward to working with Commissioner Koskinen to address many of the important challenges at the IRS impacting the ability of this critical agency to perform its mission,” she said. “I am prepared to work with the new commissioner on funding and workforce issues, including the need for sufficient personnel and rising workloads.”
Kelly pointed out that in 2013, for the first time in its history, budget cuts forced the IRS to shut its doors, depriving taxpayers of services for three full days, as employees suffered unpaid furlough days through no fault of their own. “The IRS budget over the past two years has been cut by nearly $1 billion,” Kelly noted. “The agency performed the work of the most recent tax-filing season with some 8,000 fewer employees than just two years earlier, despite the growth in both numbers and complexity of tax returns, and already start of the current filing season is delayed due to resource shortages. These are serious circumstances undercutting the work of the agency responsible for collecting 93 percent of government revenue.”
Senate Minority Leader Mitch McConnell, R-Ken., was one of many Republican senators who voted against Koskinen’s confirmation, in protest at the expedited confirmation process pushed by Senate Democrats. Republican lawmakers have also argued that there were still too many unanswered questions about the IRS “targeting” scandal.
“The American people deserve answers about how and why this targeting happened,” McConnell said Thursday. “They deserve justice too. And I will not be supporting any nominee to lead this agency until the American people get the answers they deserve. But, of course, the Democrats in charge of the Senate changed the rules a few weeks back in order to ensure they could get their way on nominees, no matter what the American people think. It’s the same kind of attitude we’ve seen on the NDAA bill too, where the Majority Leader prevented other members from offering amendments. They’ll just do what they want even if it means breaking the rules. So, if John Koskinen does find himself confirmed tomorrow, I want him to know a few things. First of all, he should understand that I don’t hold any animus toward him personally. Under different circumstances, I might very well have been able to support him. We had a good conversation when we met recently to discuss his nomination. But he’s also someone I’ll be keeping a close watch on, as will the other members of my conference. As will the American people, because big challenges lie ahead for the next IRS commissioner, whoever he or she may be. We expect the next IRS commissioner to cooperate fully with the ongoing investigation into this scandal. We expect whoever is eventually confirmed to hold those who broke or bent the rules accountable. We expect the next commissioner to fairly implement the laws that he or she is charged with executing.”
McConnell also wants Koskinen to oppose the IRS’s recently proposed regulations spelling out what 501(c)4 groups would be allowed to do to qualify for tax-exempt status as “social welfare” organizations (see Treasury and IRS Issue Guidance for 501(c)(4) Tax-Exempt Social Welfare Organizations).
“To his credit, Mr. Koskinen has assured me he agrees with me on a topic I feel strongly about —that the IRS should stay out of regulating political speech,” McConnell added. “He told me so himself. And I was pleased to hear it. And so were he to become commissioner, I’d expect him to oppose the extremely misguided proposed IRS rule that aims to overturn more than 50 years of settled law and practice by unfairly targeting the speech of those who criticize the Administration while leaving its supporters untouched. This proposed rule, which redefines what social welfare’ means in order to target certain groups that seek to educate the public, would end up penalizing federal, state, and local organizations for the supposed crime’ of providing information—much of it nonpartisan or bipartisan.”