Daniel Werfel, President Joe Biden’s nominee to head the Internal Revenue Service, should brace himself for a startling array of questions during his confirmation hearing on Wednesday, which two former IRS chiefs who were involved with have limited answers for now hot seat before.
“It’s hard to imagine the reach of the IRS,” said Charles Rossotti, who ran the service from 1997 to 2002, noting that the IRS directly touches 20% of the US economy. “Who the hell knows what a senator’s main interest will be?”
John Koskinen, who ran the agency from 2013 to 2017, added that Werfel faces a major challenge in convincing a wary public — and perhaps some Republicans — that things are going in the right direction.
“It’s important for the average taxpayer to feel confident that everyone is paying what they owe,” he said.
If he runs the gauntlet during Wednesday’s hearing and is later confirmed by the entire Senate, Werfel will take over the department in one of the most momentous moments in recent history, with $80 billion from the Inflation Reduction Act earmarked to cover almost every aspect of the agency to change in the coming years.
The $80 Billion Question
The IRS’s $80 billion infusion aims to help the IRS track down fraudsters and refresh its woefully outdated technology. But a right-wing claim is that money will lead to 87,000 new IRS agents targeting average Americans — with some claiming many of those agents will be armed.
In August, then-IRS Commissioner Charles Rettig took the unusual step of publishing a comment in Yahoo Finance, calling the viral claims “absolutely false” and saying that most new hires focus on more mundane tasks like answering phones would focus.
On Wednesday, Werfel will face questions from several senators — such as committee members Sens. Chuck Grassley (R-IA), Ron Johnson (R-WI) and Marsha Blackburn (R-TN) — who have repeated aspects of the GOP indictment.
For example, Grassley once asked if the newly empowered agency “would have a task force that would deploy with AK-15 rifles already loaded?” Johnson has claimed The money will “charge the IRS to go after American families.”
“I would be disappointed and surprised if people started repeating the claims,” Koskinen said. But in pressing it, he conceded that it’s very possible “you’re hearing strange things” from questioners like Sen. Johnson.
In any case, he said the focus should be on overhauling the agency after years of underfunding, noting that his tenure “started with 100,000 staff and ended with 80,000.”
Another hot political topic of 2013
Werfel’s own time with the IRS is also likely to be dissected during the interrogation.
He temporarily headed the IRS for seven months in 2013 after being appointed by then-President Obama following a report by the Treasury Department’s Inspector General for Tax Administration that raised questions about the IRS’s political bias in its treatment of nonprofits.
A tea party rally against the Internal Revenue Service in the US Capitol in 2013. (Mark Wilson/Getty Images)
The Treasury Department specifically addressed the tax-exemption status of political groups, which has been a key GOP issue for years, even after a 2017 report found groups on both sides of the political spectrum came under scrutiny.
At the time, Werfel was facing congressional hearings from which he – and even some GOP fans – emerged largely unscathed after promising big changes for the IRS were on the horizon.
“Werfel provided immediate stability to the IRS and responded effectively to numerous investigations by Congress,” President Biden said last year when announcing his nomination.
Koskenin, who succeeded him immediately, said “generally he did a really good job there,” and joked that Werfel was so popular that he feared his own Confirmation progress might drag on.
On what to expect Wednesday, Koskenin added, “I think they’re going to want to know what he thinks about the agency’s ability to spend this new money effectively and wisely, given that previous experience.”
Then-acting Internal Revenue Service Commissioner Danny Werfel testifies before a House Ways and Means Committee hearing on the IRS’s alignment with political groups in 2013. (REUTERS/Jonathan Ernst)
Overall, Koskinen and Rossotti agree that Werfel will likely need to avoid many questions on Wednesday simply because he’s not inside yet. But if he is confirmed, the hearing will help set the stage for his early tenure.
“I hope that there will be constructive questions and that the candidate will agree to go to them with answers,” Rossotti said, noting that it’s “a very unique situation because they’ve done all this planning, but he didn’t. He wasn’t a part of it, and he’s going to call the shots.”
Ben Vershkul is the Washington correspondent for Yahoo Finance.
Click here for political news related to economy and money
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance App for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, flipboard, LinkedInAnd youtube
Don’t miss interesting posts on Famousbio
