Biden Announces Intent to Nominate Former Obama-Era Official to Head IRS

Acting IRS Commissioner Danny Werfel testifies on Capitol Hill in Washington on June 6, 2013. (Charles Dharapak/AP Photo)

President Joe Biden on Nov. 10 announced his intent to nominate former acting Internal Revenue Service (IRS) Commissioner under the Obama administration, Danny Werfel, to be its new head.

Biden announced Werfel’s appointment in a statement from the White House which said that Werfel is a “public and private sector leader who has served under both Democratic and Republican administrations.”

“Across more than 15 years of government service, Werfel served President Barack Obama and President George W. Bush to lead some of the government’s most complex management challenges as the Internal Revenue Service (IRS) Acting Commissioner and Office of Management and Budget (OMB) Controller.”

Werfel holds a Bachelor of Science in Industrial and Labor Relations (with honors) from Cornell University, a Juris Doctor (with honors) from the University of North Carolina, Chapel Hill, and a Master of Public Policy from Duke University, according to the White House.

He led the IRS in 2013 after Obama selected him as acting commissioner in the wake of an Inspector General report revealing mismanagement and bias in the determination of tax-exempt status for non-profit organizations.

Acting IRS Commissioner Danny Werfel arrives on Capitol Hill in Washington, on June 27, 2013. (J. Scott Applewhite/AP Photo)

‘Honored to Be on This Journey’

Werfel has spent the last nine years at Boston Consulting Group where he “helped launch their U.S. public sector practice,” the statement read. According to the global management consulting firm’s official website, Werfel is the managing director and a partner at the firm.

Werfel will be replacing Trump-appointed IRS Commissioner Charles Rettig, who will be departing the IRS on Nov. 12. Douglas O’Donnell, the IRS deputy commissioner for services and enforcement, will lead the agency on an interim basis beginning this weekend.

In a lengthy statement on Nov. 10, Rettig said the IRS was on the “brink of an exciting new era,” one which he said is “desperately needed to transform the agency to improve taxpayer service and ensure fairness in tax compliance.”

“Throughout these last four years as IRS Commissioner, I have always been extremely proud to be able to say, ‘I’m Chuck Rettig and I work with the Internal Revenue Service,’” Rettig said. “I’ve been hugely honored to be on this journey with the dedicated and talented public servants of this agency. They are the heart and absolute strength of the IRS, and they will continue to ensure the agency can fulfill its mission in the years to come.”

Rettig also noted the challenges the agency has faced over the years, particularly in light of the COVID-19 pandemic, and pointed to the Biden administration’s Inflation Reduction Act of 2022, which allocates approximately $80 billion to the IRS over the next 10 years, including $45.6 billion for “enforcement.”

The Internal Revenue Service (IRS) building in Washington on Feb. 19, 2014. (Jim Watson/AFP/Getty Images)

‘Absolutely Not Increasing Audit Scrutiny’

The funding has sparked concern among Republican lawmakers and others who fear the extra funding may be used to increase audit scrutiny on small businesses or middle-income Americans.

IRS officials have denied this will be the case, with Rettig himself stating in a letter to members of the Senate on Aug. 4 (pdf) that the agency will “absolutely not” be increasing audit scrutiny on such taxpayers, and that the boost in funding will instead be used to “get us back to historical norms in areas of challenge for the agency,” such as large corporate and global high-net-worth taxpayers and multinational taxpayers with international tax issues.

However, former IRS whistleblower, William Henck, has disputed claims by the IRS and other officials that denying the funding will lead to increased scrutiny of average Americans.

“The idea that they’re going to open things up and go after these big billionaires and large corporations is quite frankly [expletive],” Henck said in an interview with Fox Business on Aug. 15. “It’s not going to happen. They’re going to give themselves bonuses and promotions and really nice conferences.”

“There will be a considerable incentive to basically shake down taxpayers, and the advantage the IRS has is they have basically unlimited resources and no accountability, whereas a taxpayer has to weigh the cost of accountants, tax lawyers—fighting something in tax court,” Henck said.