Douglas O’Donnell Named as Acting IRS Commissioner (2)

Douglas O’Donnell will serve as acting IRS commissioner once the term for the agency’s top official Chuck Rettig expires on Nov. 12, the Treasury Department announced Friday.

O’Donnell currently serves as deputy IRS commissioner for services and enforcement, and has previously been commissioner of the large business and international division. He has worked at the IRS for more than 36 years, according to Treasury.

The acting commissioner is expected to play a key role in the IRS’s plans for implementing the $80 billion in additional funds it received in the tax-and-climate law enacted in August.

“Deputy Commissioner O’Donnell has dedicated his career to serving American taxpayers through every level of the agency,” Treasury Secretary Janet Yellen said in a statement. “His commitment to improving the experience of the American taxpayer will guide his and the agency’s work as they continue their efforts to propel the IRS forward during a critical period of modernization.”

Rettig said in a statement that O’Donnell will work with other IRS senior leaders to implement the new funding as well as the clean-energy provisions and other aspects of the new law.

“I’ve relied on Doug’s insight and knowledge during my term as Commissioner, and he is the ideal person to lead the agency during this period,” Rettig said in a statement.

Former IRS officials who have worked with O’Donnell say O’Donnell’s extensive experience at the IRS will be helpful as he navigates a significant to-do list for the agency. O’Donnell will be tasked with leading the IRS in developing a report explaining how the agency plans to use its new funds, clearing its backlog of paper tax returns, and preparing to provide improved customer service in the upcoming tax-filing season.

“His knowledge of the IRS and how it functions and what it’s capable of and where its strengths are and weaknesses are will be of enormous benefit to him in the job,” said David Kautter, who served as acting IRS commissioner from 2017-2018 and now is a partner at RSM.

Kautter added that it would be beneficial for O’Donnell to lean on Treasury and outside groups to get the perspective of external stakeholders, since he is a long-time IRS employee.

Jorge Castro, a tax partner at Miller & Chevalier who has worked both at the IRS and as a Democratic congressional aide, said that O’Donnell will have to frequently communicate with lawmakers and the administration, who will have many questions about the implementation of the tax-and-climate law. Castro predicted that lawmakers would like working with O’Donnell.

“I think he’s going to be a good ambassador for the Service to Congress,” Castro said.

National Treasury Employees Union President Tony Reardon said in a statement that his organization is “pleased to see an experienced career professional chosen to manage the agency until a new commissioner is appointed and confirmed,” given that the IRS is preparing to undergo a significant transformation.

The Biden administration has yet to nominate someone for the IRS commissioner position. Bloomberg News has previously reported that the White House wants the nominee to have a business and management background.