The Senate voted Thursday to confirm Daniel Werfel as the new Internal Revenue Service commissioner with bipartisan support, as the agency works to overcome technology and taxpayer service challenges, as well as politics.
The vote was 54-42 in favor of Werfel's confirmation. Six Republicans voted to support Werfel's nomination and one Democrat, Joe Manchin of West Virginia, voted against the nomination because of a dispute over tax credits with the Biden administration.
Werfel was a former acting commissioner of the IRS during the Obama administration and led the agency for about a year in 2013 after a scandal erupted over the IRS's extra scrutiny of political groups applying for tax-exempt status ahead of the 2012 election. He worked to mend relations at the agency with Congress.
He also previously served as controller of the White House Office of Management and Budget during the Obama administration and worked there during earlier administrations since 1997. After leaving the federal government, he worked at the Boston Consulting Group as a managing director and partner.
As IRS commissioner, he will succeed Charles Rettig, whose term ended last November, and Acting Commissioner Douglas O'Donnell, who will remain as chief taxpayer experience officer and commissioner in charge of the IRS's Wage and Investment Division.
Last week, the Senate Finance Committee approved his nomination by a bipartisan 17-9 vote (
The confirmation vote was also held up because the Senate was debating abortion legislation and a controversial resolution disapproving of Washington, D.C.'s proposed criminal justice reforms. Senate Minority Leader Mitch McConnell, R-Kentucky, was also injured on Wednesday night in a fall and reportedly suffered a concussion that will hospitalize him for at least the next few days.
Werfel will be leading the IRS as it receives an extra $80 billion in funding over 10 years under the Inflation Reduction Act. The funding is supposed to be spent on improving taxpayer service and technology as well as increasing enforcement to help close the tax gap.
However, House Republicans voted earlier this year to repeal the funding for tax enforcement, arguing that it would be used to increase tax audits of the middle class, and introduced legislation to abolish the IRS and replace the current income tax system with a national sales tax administered by the states.
The Biden administration has pledged to use the IRA money only for efforts to collect more from high-income taxpayers and corporations that have been avoiding taxes.
"For Mr. Werfel to get bipartisan support to lead the IRS at a time when a lot of Republicans would happily mothball the entire agency is a testament to his fairness, his ability to work with both sides, and his undeniable qualification for this role," said Senate Finance Committee Chairman Ron Wyden, D-Oregon, in a statement Thursday. "Mr. Werfel understands that his directive is to go after wealthy tax cheats and scofflaw corporations, while improving customer service for everybody else. There have already been remarkable improvements in taxpayer service with the IRS having used only a small fraction of the funding it got in the Inflation Reduction Act, and this is shaping up to be the smoothest tax filing season in years. We're counting on Mr. Werfel to maintain that progress."
During his confirmation hearing last month, Werfel was asked about his plans for the $80 billion and whether it would be used for audits of middle-class and low-income taxpayers. He disputed claims that the IRS would hire an army of 87,000 auditors.
"I think it's patently incorrect," he responded. "In fact, I entered the job with a directive from Secretary [Janet] Yellen to not use IRA funds to increase audits on anyone earning less than $400,000 that would be a small business or working family. Instead, my understanding is the focus is to hire people with the understanding and capacity and talent to unpack very complicated, intricate returns, which is a capacity gap that exists today. So I think the notion of armed agents is incorrect. I certainly would have no intention of making that part of any plan going forward."
So far, this tax season appears to be going relatively smoothly compared to the past few years, when the IRS struggled to deal with pandemic-related tax credits and stimulus payments and a backlog of millions of paper tax returns and correspondence to answer (
Rep. Bill Pascrell, D-New Jersey, a member of the tax-writing House Ways and Means Committee hailed the Senate's confirmation of Werfel as the new IRS commissioner.
"Running the IRS is one of the toughest jobs in government," Pascrell said in a statement. "Mr. Werfel has his work cut out for him and the job ahead will be enormous. ... Through investments enacted by the Inflation Reduction Act, the IRS is answering the phones, the backlog is shrinking and refund checks are going out on time. That has to be an appetizer and not the main course. Americans need to have trust in our tax system. There cannot be one set of rules for the powerful and another set for everyone else. We must have an IRS that provides tax fairness for all Americans and Danny Werfel can lead us in that direction."
House Ways and Means Committee ranking member Richard Neal, D-Massachusetts, also praised Werfel.
"At last, the Internal Revenue Service has a leader to guide the new era of service and modernization fueled by the Inflation Reduction Act," he said in a statement. "Commissioner Werfel is up to the challenge of restoring the nation's trust in the IRS, and finally doing away with our two-tiered tax system. Congratulations to Commissioner Werfel, and I look forward to working together."
