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IRS Restructures Leadership in Effort to Streamline Operational Efficiencies

S.J. Steinhardt
Published Date:
Dec 15, 2023

The IRS has announced its plans for a new leadership structure for the first time in two decades.

The new organizational structure will feature a single deputy IRS commissioner, instead of two, with four new IRS chief positions overseeing taxpayer service, tax compliance, information technology and operations. The changes are intended to streamline operational efficiencies and align with major transformation work underway at the agency through the Inflation Reduction Act funding. The changes are intended to be in place by early 2024.

"With transformation work continuing to accelerate at the IRS, this is the right time to make these organizational adjustments that will support the agency's improvements for taxpayers and provide the flexibility needed to add efficiency and expand collaboration across the agency," IRS Commissioner Danny Werfel said. "Many foundational changes in tax administration have occurred since the last major IRS organizational change, and this new alignment will help us in our ongoing transformation work to modernize the nation's tax system. This will improve our leadership model and streamline our internal processes for the benefit of taxpayers, the tax community, our employees and ultimately the nation."

Werfel said that the model of a single deputy commissioner has worked successfully both inside and outside government, and it also reflects the model used at the U.S. Department of the Treasury. The adjustment provides more specialization at the top of the IRS organization chart than the current two-deputy-commissioner model and reflects the importance of emerging priorities in the transformation work.

"This new governance model better supports the agency's mission as well as giving heightened importance to these four key areas of taxpayer service, tax compliance, IT and operations," Werfel said. "These are critical areas we need to focus on, and this structure will reflect those priorities."

The new IRS deputy commissioner will be Doug O'Donnell, currently the deputy commissioner for services and enforcement, who served as acting IRS commissioner from November 2022 through March 2023. In addition, the four new deputy chief positions will be filled by Ken Corbin, (chief, taxpayer service), the current IRS wage and investment commissioner; Heather Maloy (chief taxpayer compliance officer), currently the IRS chief of staff); Rajiv Uppal (chief information officer), currently the director of the office of information technology and chief information officer for the Centers for Medicare and Medicaid Services (CMS), part of the U.S. Department of Health and Human Services (HHS); and Melanie Krause (chief operating officer), currently the chief data & analytics officer.

Werfel briefed a number of his predecessors about the changes ahead of Wednesday's announcement, Accounting Today reported. Former IRS Commissioner Charles Rettig welcomed the changes at the agency.

"IRS restructuring is long overdue," he wrote in an email to Accounting Today. "As the IRS enhances its operations using the important [Inflation Reduction Act] funding, a more streamlined leadership structure will allow it to be more agile and operate more efficiently, especially if called upon during another crisis, whether COVID related or otherwise."

Mark Everson, a former IRS commissioner who is now a vice chairman at tax consulting firm Alliantgroup, said that the restructuring makes sense and pointed out that he had originated the two-deputy structure that is now changing.

"He's been in the job now 10 months," Everson said of Werfel. "He's looked around and he's structuring it the way he thinks will be most effective. And that's what you do when you go into a job like that. It's a totally normal course of events."

Everson also said that the IRS will still be facing challenges even after the restructuring.

"The underlying challenges are well known," he said. "It's hiring and training all the people for enforcement and customer service reps, but they still have a lot of work to do in terms of getting people to adhere to procedures. They've got to make sure that they keep their nose clean as they go up the organization."

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