The Senate Finance Committee has scheduled a hearing next Tuesday to consider the nomination of John Koskinen as the next Internal Revenue Service commissioner as the agency seeks to emerge from a series of recent scandals that have prompted the departures of a number of high-ranking officials.
Senate Finance Committee chairman Max Baucus, D-Mont., announced today that he would convene the hearing next Tuesday, December 10, to consider the nomination of Koskinen, the former chairman and CEO of a similarly tarnished organization, Freddie Mac.
President Obama nominated Koskinen in August in the midst of the furor that erupted over the extra scrutiny that the IRS’s Exempt Organizations unit was giving to political groups applying for tax-exempt status under Section 501(c)4 of the Tax Code, which is intended for “social welfare” organizations (see Obama to Nominate Former Freddie Mac Chair Koskinen as IRS Commissioner).
The head of the unit, Lois Lerner, admitted in May that the IRS had been using terms such as “Tea Party” and “Patriot” to filter out applications for a closer look, in anticipation of the upcoming release of a report by the Treasury Inspector General for Tax Administration on the “inappropriate criteria” used to target the applications from conservative-leaning groups. It later emerged that the IRS had also been using terms such as “Progressive” and “Occupy” to screen applications from liberal groups on its so-called BOLO (short for “Be on the Lookout”) lists, bundling together similar applications for extra examination.
Amid a series of contentious hearings on Capitol Hill, Lerner was forced out of the agency after refusing to answer questions from lawmakers, along with IRS acting commissioner Steven T. Miller and other officials in the Exempt Organizations unit. Some were implicated in a series of scandals that erupted in the wake of the Tea Party “targeting” scandal, including controversy over the lavish spending at a few IRS conferences and training videos filmed for the conferences featuring IRS employees spoofing TV series like “Star Trek” and “Gilligan’s Island.”
Miller’s replacement, the current acting commissioner, Daniel Werfel, pledged to Congress that he would reform the agency, including new procedures for screening applications for tax-exempt status and the elimination of BOLO lists. The IRS released proposed guidance last week on how it would determine whether 501(c)4 groups met the qualifications for being social welfare organizations, reigniting a fresh wave of recriminations (see Treasury and IRS Issue Guidance for 501(c)4 Tax-Exempt Social Welfare Organizations).
Koskinen is expected to face a skeptical Senate panel during his confirmation hearing next week. Soon after his nomination, he was reported to have a net worth of between $7.1 million and $27.4 million from his stock holdings (see Obama’s Choice to Run IRS Reports up to $27.4 Million Wealth). However, the IRS is seen as in dire need of strong leadership. While Werfel, a former controller at the Office of Management and Budget, was brought in from outside the IRS in May and made important reforms during his tenure, he has also faced harsh questioning from some lawmakers. He has also needed to contend with steep budget cutbacks from the sequester, and the promise of a delayed tax season, which he attributed to the government shutdown in October.
His predecessor, Miller, was also an acting commissioner, and the IRS has not had a Senate-confirmed commissioner since Douglas Shulman departed the IRS at the end of his term in November 2012.
Koskinen served as non-executive chairman of the housing finance lender Freddie Mac from 2008 to 2011 and acting CEO in 2009 in the aftermath of the mortgage meltdown that prompted accusations over lax lending standards at Freddie Mac as well as Fannie Mae and private lenders.
Before that he was 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 of the Office of Management and Budget from 1994 to 1997. He also has extensive experience in the private sector.
Earlier in his career, Koskinen served as legislative assistant to Mayor John Lindsey of New York City, and assistant to the deputy executive director of the National Advisory Commission on Civil Disorders (the "Kerner Commission").
Koskinen received a B.A. from Duke University and an L.L.B. and J.D. from Yale University School of Law.