IRS commissioner nominee says no audit boost for households under $400,000
WASHINGTON (AP) — If confirmed as IRS commissioner, Daniel Werfel says he will commit to not increasing tax audits on businesses and households making less than $400,000 per year.
Anticipating questions ahead of his confirmation hearing Wednesday before the Senate Finance Committee, Werfel in prepared testimony makes several other commitments aimed at revamping the beleaguered agency.
President Joe Biden nominated Werfel to steer the Internal Revenue Service as it receives a massive funding boost — nearly $80 billion over the next 10 years through the Inflation Reduction Act, which Congress passed in August. Noting the act's impact on the federal tax collector, Werfel says that "Americans rightfully expect a more modern and highperforming IRS."
While promising to modernize the agency's technology, address its paperwork burden and audit high-income earners, Werfel says he will be "unyielding in following my true north to increase public trust."
Werfel, 51, who led Boston Consulting Group's global public sector practice, was nominated to replace Charles Rettig. Selected by President Donald Trump to lead the agency, Rettig left when his five-year term ended in November. An acting commissioner has been filling in.
Werfel will also have to navigate controversy surrounding the new funding, brought by critics who have distorted how the new law would affect the IRS and taxes for the middle class. About $46 billion was allocated for enforcing tax laws and the rest to taxpayer services,* operations support and updating business systems.
Republicans have suggested without evidence that the agency would use the new money to hire an army of tax agents with weapons.
Disapproval of the agency reached new heights when House Republicans began their tenure in the majority last month by passing a bill that would rescind the funding, fulfilling a campaign promise. The legislation has not advanced in the Senate and is unlikely to reach Biden, who has promised a veto.
"The hearing promises to be a doozy, and not only because the IRS is one of the most unpopular government agencies in the United States," said Janet Holtzblatt, a senior fellow at the UrbanBrookings Tax Policy Center. "This will be the first big IRS hearing since it received an $80 billion boost to its budget in the Inflation Reduction Act."
GOP criticism appeared more directed at Biden administration efforts to bolster funding for the agency than at Werfel himself. But tax experts say Werfel should expect to face a slew of managerial questions.
Caroline Bruckner, a tax professor at the American University Kogod School of Business, said that, if confirmed, Werfel would have to address the massive workforce challenges at the IRS wrought by attrition, an aging workforce and a generally poor reputation.