Daniel Werfel, a former acting commissioner of the Internal Revenue Service during the Obama administration, will be nominated as the next commissioner of the IRS by the Biden administration, according to the White House.
Werfel was also the former controller of the Office of Management and Budget during the Obama administration. He will be succeeding Charles Rettig, who is retiring this month. Douglas O'Donnell, deputy commissioner for services and enforcement, was nominated as acting commissioner in late October (
Treasury Secretary Janet Yellen praised Werfel. "I strongly support President Biden's intent to nominate Daniel Werfel to serve as the next commissioner of the IRS," she said in a statement Thursday. "Danny's prior service under both Democratic and Republican administrations, his deep management experience, and his work directing significant transformation efforts, make him uniquely qualified to lead the agency at this critical juncture."
The IRS is set to receive an extra $80 billion in funding over the next 10 years under the Inflation Reduction Act that Congress passed in August. However, Republicans have threatened to cut the funding if they gain control of Congress to deter the IRS from pursuing taxpayers aggressively with audits.
"After decades of underfunding, the IRS now has the resources it needs to improve services for taxpayers and modernize outdated technology and infrastructure," said Yellen. "Danny's deep commitment to fairness and making sure government works for all will also be invaluable as we improve the taxpayer experience and eliminate a two-tiered tax system. In addition, Danny's leadership will be critical to effectively and efficiently implement the clean energy tax incentives that will increase production in the United States and lead to significant job creation. I urge the Senate to act swiftly to confirm Danny and look forward to working with him in the years ahead."
Werfel has served in various leadership roles in both the federal government and private sector. He currently is a managing director and partner at Boston Consulting Group, where he runs the global public sector practice. In 2009, he was nominated by President Obama to be the controller of the Office of Management and Budget, a post he served in for four years before becoming acting commissioner of the IRS in 2013. He began his career at OMB in 1997 as a policy analyst in the Office of Information and Regulatory Affairs.
He joined the IRS at a fraught time while the agency came under fire from Republicans in Congress over a scandal involving the so-called "targeting" of Tea Party groups applying for tax-exempt status in the run-up to the 2012 election, which led to the departure of his predecessor, acting commissioner Steven Miller, along with the direct of the Exempt Organizations unit at the IRS, Lois Lerner, and other top officials. Werfel was succeeded by John Koskinen when he was nominated by Obama as a permanent replacement for the commissioner post.
Outgoing IRS Commissioner Rettig had a
Lawmakers in Congress will be dealing with a new head of the agency now for their oversight.
"I applaud the Biden administration for moving to right our tax system," said Rep. Bill Pascrell, D-New Jersey, chairman of the House Ways and Means Oversight Subcommittee, in a statement. "After Congress made a big investment in fixing the IRS, the agency needs a leader who can answer the phones, get refund checks out fast, and crack down on big business tax cheats. I look forward to hearing from Mr. Werfel on his plans and acting together for tax fairness. It's time to make the IRS work for Americans again."
The Senate will need to confirm Werfel before he replaces Rettig or O'Donnell.
"Daniel Werfel is an excellent nominee to be the next IRS commissioner," said Senate Finance Committee chairman Ron Wyden, D-Oregon, in a statement. "He's a long-time public servant who skillfully navigated numerous challenges during his decades of federal experience. He was named acting commissioner in 2013 to bring stability to IRS, earning the support of members on both sides of the aisle. Danny is committed to government that works and rebuilding the IRS, with a focus on modernizing decades-old technology and improving administration. He understands that American taxpayers deserve top-rate service, and will work tirelessly to achieve that goal. He's also committed to being a good steward of taxpayer dollars, as demonstrated by his work in 2012 to recover $4.2 billion in improper health care payments and prevent identity theft by better integrating Medicare and Social Security data."
Werfel will need to spend the extra $80 billion in funding from the Inflation Reduction Act on improvements at the agency.
"I welcome the nomination of Danny Werfel to serve as commissioner of the Internal Revenue Service," said House Ways and Means Committee chairman Richard Neal, D-Massachusetts, in a statement. "Democrats delivered the resources necessary for the IRS to usher in a new era of tax administration, and improving the taxpayer experience requires a strong leader. Mr. Werfel will be charged with fulfilling the promise of the Inflation Reduction Act ... . Guided by his prior IRS and private sector experience, he will be able to hit the ground running, and I look forward to working with him. This nomination is critical to the nation's faith and trust in the IRS, and I urge the Senate to take this up as soon as possible."
Republicans may block the nomination, especially if they gain control of the Senate after the uncertain results of the midterm election.
In the House, the soon-to-retire Republican leader of the tax-writing House Ways and Means Committee, Rep. Kevin Brady, R-Texas, said Republicans would be looking for several commitments from Werfel.
"As with any nominee, it's important to keep an open mind," he said in a statement. "However, Daniel Werfel was named acting IRS commissioner in 2013 with the goal of restoring credibility and confidence in the IRS after the agency's shameful targeting of conservative groups. He didn't succeed in 2013 and I'm concerned about whether he can succeed in 2023 and beyond. Unfortunately, the American people still do not have faith in the agency after years of political targeting, poor customer service, and failed policies. Today, middle-class earners are rightly concerned they'll be under heightened scrutiny from an army of auditors, that their private information could become public, and that their bank could be turned into a local chapter of the IRS."
