US Senate committee approves IRS nominee Danny Werfel

The US Senate Finance Committee voted 17-9 to approve nominee Danny Werfel to become commissioner of the Internal Revenue Service yesterday, March 2.

His appointment will now be decided by a Senate vote. If approved, Werfel will succeed IRS Commissioner Charles Rettig, who stepped down in November 2022, and take the reins from Acting Commissioner Doug O’Donnell.

The Senate Finance Committee released a statement highlighting bipartisan support for advancing Werfel to the next stage of the appointment process.

“After a decade of Republican budget cuts there is a clear double standard in tax enforcement. Too much of the burden of audits falls on working Americans, and wealthy tax cheats know the odds are they’ll get away with ripping off everybody else scot-free,” said the committee.

“There’s no doubt that Mr Werfel understands the challenges, and he’s also going to ensure the IRS continues making progress improving customer service,” it concluded.

Werfel was acting commissioner for a brief time – from May to December 2013 – before John Koskinen took over.

After leaving the IRS, Werfel joined management consultancy Boston Consulting Group as director of its global public sector practice in Washington DC, where he still works today. He will give up this position should he be made commissioner.

After being nominated, Werfel faced a grilling from the Senate Finance Committee on February 15. Committee member Mark Warner, a Democratic senator from Virginia, described the job as “one of the more thankless tasks” in Washington DC.

During the hearing, Werfel promised to uphold data security at the IRS and pledged not to expand tax audits on businesses and households making less than $400,000 a year.

“I’m ready to roll up my sleeves to help working families,” he said.

The IRS is gaining $80 billion in funds over the next 10 years as part of the Inflation Reduction Act, which was approved in August 2022. This funding has drawn criticism from Republicans who advocate public spending cuts.

The role of IRS commissioner should be non-political and strictly administrative, but the office has been dragged into political rows in recent years. For example, Rettig himself came under fire from Democrats for refusing to release President Donald Trump’s tax returns.

When Werfel was appointed acting commissioner, the IRS had just been rocked by controversy over claims it had denied tax exemptions to conservative groups from 2010 to 2012. Later, a US Treasury inquiry found that the IRS had targeted left-wing, as well as right-wing, groups for scrutiny over tax-exempt claims.

This may be why one committee member, James Lankford, a Republican senator from Oklahoma, said Werfel was “walking right into fire” in taking the job.

Werfel is nominated to serve as IRS commissioner until November 2027.

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