WSJ Epaper Shared Senate Set to Confirm Danny W. to Lead IRS

WASHINGTON— WSJ Epaper, informed the Senate is poised to confirm Danny Werfel as the new commissioner of the Internal Revenue Service as soon as Wednesday evening, handing him the task of leading the agency’s $80 billion expansion.

Mr. Werfel, a longtime Office of Management and Budget official, was acting IRS commissioner in 2013 and has worked at the Boston Consulting Group since leaving that position. He would return to government with the high-profile, challenging tasks of increasing tax enforcement and improving taxpayers’ interactions with the IRS. His term would last until Nov. 12, 2027.

The Senate advanced Mr. Werfel’s nomination with a 51-44 procedural vote; a final vote could happen later Wednesday. Six Republicans backed Mr. Werfel on the procedural vote, with Sen. Joe Manchin (D., W.Va.) the only Democrat in opposition.

“He wants to beef up on service, wanting to focus on fairness so that affluent billionaires don’t get a free ride,” said Senate Finance Committee Chairman Ron Wyden (D., Ore.). “He’s going to get a good vote today.”

Senate Republicans raised few objections about Mr. Werfel, and his confirmation hearing focused primarily on lawmakers’ frustrations with the agency and questions about its new funding.

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Congress approved the $80 billion last year as part of the climate and health law known as the Inflation Reduction Act, which advanced without any GOP support. Republicans campaigned against the IRS expansion, warning the agency would launch burdensome audits of small businesses. Many GOP lawmakers have proposed repealing the funding and promised tough oversight of the agency’s implementation of its expansion.

Congress designated most of the money to increase enforcement, and the Biden administration says it aims to focus that effort on high-income households and large corporations. The IRS, coming off a decade of flat or declining budgets, also intends to update ageing computer systems. And it has started hiring customer-service agents, a move that is reducing telephone wait times.

IRS officials have been working on a plan for spending the $80 billion, which Treasury Secretary Janet Yellen requested by mid-February. But the IRS missed that deadline and has said it is still working on the plan.

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One assignment awaiting Mr. Werfel will be figuring out who should get audited by a beefed-up IRS. Ms. Yellen has said that IRS audit rates for people under $400,000 won’t exceed historical levels for that group. But the administration hasn’t been clear about what that means. Returning to audit rates from a decade ago could mean increased audits now.

“I will work to meet Secretary Yellen’s pledge and ensure that the IRA funding is not used to increase audit scrutiny on middle-income Americans or small businesses,” Mr Werfel, 51, said in a written response to questions from senators on the Finance Committee. “The Committee and the American people will need to understand how the IRS upholds Secretary Yellen’s commitment.” Said to WSJ Epaper.

Mr Manchin said he opposed Mr Werfel’s nomination because of how the IRS has implemented parts of last year’s tax law. Mr Manchin had previously objected to Treasury Department and IRS rules that he said weren’t strict enough in requiring domestic content and supply chains for electric vehicles.

“I have zero faith he will be given the autonomy to perform the job in accordance with the law,” Mr Manchin said to WSJ Epaper.