Treasury Secretary Janet Yellen picked Douglas O'Donnell as the new acting commissioner of the Internal Revenue Service on Friday.
O'Donnell has been deputy commissioner for services and enforcement at the agency since April 2021 and is succeeding IRS Commissioner Charles Rettig, whose term ends on Nov. 12.
"I want to thank Commissioner Rettig for his tireless service to the American people across two administrations, and his leadership of the IRS during the difficult and unique challenges posed by COVID-19," Yellen said in a statement. "I am grateful to him for his partnership and efforts to ensure taxpayers had the resources they needed to make it through the pandemic."
O'Donnell has spent more than 36 years at the IRS in a variety of roles. Before becoming deputy commissioner for services and enforcement last year, he served as commissioner of the Large Business and International Division for nearly six years.
"Deputy Commissioner O'Donnell has dedicated his career to serving American taxpayers through every level of the agency," Yellen added. "His commitment to improving the experience of the American taxpayer will guide his and the agency's work as they continue their efforts to propel the IRS forward during a critical period of modernization. Now more than ever, the IRS has the momentum to transform with service, technology and workforce improvements that will make it a world-class agency to meet the needs of the American people."
O'Donnell will be taking the helm of the IRS at a time when the agency has been facing criticism over long backlogs of unprocessed tax returns last tax season. The agency has faced staffing shortages and the impact of the pandemic, as well as new tax laws and the burden of distributing three rounds of Economic Impact Payments along with monthly advance distributions of the enhanced Child Tax Credit last year.
However, earlier this year, Congress approved an extra $60 billion in funding over the next 10 years to be used for improving outdated technology, improving taxpayer service and beefing up audits, especially of high-income taxpayers and large corporations. The IRS has also been going on a hiring spree, with plans to add 10,000 employees as it deals with a wave of retirements from baby boomers. On Thursday, the IRS
It is not clear if O'Donnell or another official will be named next year as permanent commissioner of the IRS since the position requires confirmation by the Senate, and control may shift to Republicans after the midterm elections in November. Whoever the Biden administration nominates for the position could probably face a contentious confirmation hearing.
Despite the challenges of winning Senate confirmation, the Biden administration is reportedly searching for a permanent IRS commissioner to replace Rettig, who has faced criticism from both Republicans and Democrats.
"We are closer to the dawn of a new day at the IRS," said House Ways and Means Committee Oversight Subcommittee Chairman Bill Pascrell, D-New Jersey, in a statement. "The Biden administration is right to end the term of Donald Trump's IRS commissioner. Under Mr. Rettig's failed leadership, the agency and its dedicated employees have suffered through scandal and incompetence. Americans are fed up with late refunds, unanswered calls and a two-tier tax system. I wish Mr. O'Donnell well as acting commissioner and look forward to working closely with him on implementation of the Inflation Reduction Act. ... Many Americans have lost confidence in the IRS. The agency must do a better job with the basics of being responsive to American taxpayers, as well as more to crack down on big business tax cheats and create greater fairness for regular Americans. This is a big moment for tax enforcement in America. I urge the president to expeditiously nominate a new commissioner and chief counsel who will be partners for the Biden administration in revitalizing our tax agency."
