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At Confirmation Hearing, Nominee for IRS Commissioner Questioned About $80B in Funding

S.J. Steinhardt
Published Date:
Feb 16, 2023

In his confirmation hearing before the Senate Finance Committee, Daniel Werfel, President Joe Biden’s nominee to be the next IRS commissioner, was pressed on how the agency plans to spend the $80 billion allocated to it under the Inflation Reduction Act.

In his sworn testimony, Werfel pushed back against Republican claims that the 87,000 new employees to be hired by the IRS pursuant to that legislation will be armed, The Washington Post reported. In fact, much of the money will be used to replace retiring employees, as well as to improve customer service and antiquated technology systems.

“The notion of armed agents is incorrect,” Werfel testified, according to multiple news sources. “I certainly would have no intention of making that part of any plan going forward.”

The day before the hearing, Sen. Michael Crapo (R- Idaho), the committee’s ranking member, reintroduced a bill to prevent the IRS from using the allocation to increase audits of taxpayers who earn less than $400,000 per year. Treasury Secretary Janet Yellin has already issued a directive not to use any of the IRA funding to increase those types of audits, a policy by which Werfel said that he would abide.

“If I am fortunate enough to be confirmed, the audit and compliance priorities will be focused on enhancing IRS’s capabilities to ensure that America’s highest earners comply with applicable tax laws,” he said, according to The Wall Street Journal.

Werfel also committed to improving service at the IRS. In October, the agency announced that it had hired 4,000 customer service agents to cope with inquiries during the current filing season, among other steps.

Under questioning from Sen. Ron Wyden (D-Ore.), the committee chair, Werfel said that he would report back to Congress in 60 days on how the IRS is going to change its computer algorithms after a recent study found that Black taxpayers are audited at 2.9 to 4.7 times the rate of non-Black taxpayers, Accounting Today reported.

Werfel seems sure to be confirmed, despite some of the tough questioning. Senators of both parties repeatedly thanked him for being willing to take on the difficult job, the Journal reported.

“So you thought you were in the fire last time you walked into the IRS,” Sen. James Lankford, (R-Okla.) said, according to The New York Times, referring to Werfel’s stint as acting commissioner in 2013. “You’ve got a lot that’s on your plate this time.”

Werfel’s nomination was endorsed by the National Association of Tax Professionals. "We believe Mr. Werfel's priorities will bring the significant change that's needed within the IRS to better serve taxpayers and tax professionals across all walks of life," Executive Director Scott Artman said in a statement, Accounting Today reported.

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