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Who Is IRS Commissioner Nominee Danny Werfel? (2)

Nov. 10, 2022, 9:17 PMUpdated: Nov. 11, 2022, 1:19 AM

President Joe Biden nominated Boston Consulting Group executive and former acting IRS head Danny Werfel on Thursday to serve as IRS commissioner, succeeding Chuck Rettig. Find out more about his background and the immediate reaction to his nomination.

1. Werfel has both public and private sector experience

Werfel has spent many years working in government. In addition to his stint as acting IRS commissioner in 2013, he previously worked at the Office of Management and Budget.

But Werfel hasn’t only worked in the public sector. Currently, he is a managing director and partner at Boston Consulting Group, leading the company’s public sector practice.

His managerial background is in line with the type of background that many former top IRS officials said they wanted for the next commissioner.

Werfel “fits all the criteria” that former IRS officials had suggested and has the “additional bonus” of having already worked at the agency, said Charles Rossotti, who served as IRS commissioner from 1997 to 2002.

The time Werfel spent in the private sector will be helpful because “it gives an exposure to a broad range of other ways of doing business, which is really what’s needed,” Rossotti said.

2. Werfel was acting commissioner at a difficult time for the IRS

Werfel may be best known in the tax world for leading the IRS in an acting capacity for several months in 2013, in the wake of revelations that the agency had subjected conservative groups’ applications for tax-exempt status to extra scrutiny and delays.

John Koskinen, who served as IRS commissioner immediately following Werfel’s acting stint in the position, said Werfel worked closely with the Senate during that time period.

“I thought Danny had a very good working relationship with the Hill,” Koskinen said. “I think people knew he was responsive, that he was taking appropriate actions to try to get his arms around the situation at the IRS, and I think he’s going to do an excellent job as commissioner.”

Mark Everson, who served as IRS commissioner during former President George W. Bush’s administration, said he thinks Werfel “would be respected by members of both parties.” He also said it’s in the best interest of both Republican and Democratic lawmakers to have a Senate-confirmed IRS commissioner.

“A confirmed commissioner is accountable to the Congress in a way that an acting commissioner is not,” Everson said.

3. The nomination comes after the IRS received $80 billion in new funding

The tax-and-climate law gave the IRS an additional $80 billion over the next decade, which it plans to use to improve taxpayer services, enforcement, and agency technology.

Depending on how quickly Werfel is confirmed, he could be involved in drafting an implementation plan that Yellen has asked the agency to produce by mid-February.

While the boost in funding is a great start, having a proven leader with the experience and understanding of how government systems work is integral to implementation, said Sharon Parrott, president of the Center on Budget and Policy Priorities.

“The IRS just has an incredibly important job, and it has been starved of resources for a very long time, which has meant that its ability to meet its mission has been severely compromised,” Parrott said. “The sooner we have strong leadership at IRS in place, the faster and more successful that improvement in service, its ability to meet its mission, can turn around.”

“This is a pivotal time for the IRS as it begins the lengthy process of rebuilding after a decade of budget and staffing cuts,” National Treasury Employees Union president Tony Reardon said. “Upon his confirmation, NTEU intends to discuss with Mr. Werfel the needs of the IRS workforce and how frontline IRS employees can best deliver for American taxpayers.”

Republicans have been highly critical of the additional funding and are sure to conduct vigorous oversight of the new funding.

4. Democrats seem to like Biden’s pick

Senate Finance Committee Chairman Ron Wyden (D-Ore.) celebrated Biden’s pick, expressing confidence that Werfel’s experience as interim IRS leader would serve him well.

“Danny is committed to government that works and rebuilding the IRS, with a focus on modernizing decades-old technology and improving administration,” Wyden said in a statement. “He understands that American taxpayers deserve top-rate service, and will work tirelessly to achieve that goal.

A spokeswoman for committee ranking member Mike Crapo (R-Idaho) declined to comment on the nomination.

House Ways and Means Committee Chairman Richard Neal (D-Mass.) said that “Guided by his prior IRS and private sector experience, he will be able to hit the ground running, and I look forward to working with him.” “This nomination is critical to the nation’s faith and trust in the IRS, and I urge the Senate to take this up as soon as possible.”

Ways and Means ranking member Kevin Brady (R-Texas), on the other hand, said Werfel hadn’t succeeded in restoring confidence in the IRS after the 2013 trouble, and expressed concern that he wouldn’t succeed now. Americans “still do not have faith in the agency,” Brady said. Werfel will have to address issues including the leaking of taxpayer data that resulted in a ProPublica story and large tax return backlog, Brady said in a statement.

5. Getting him confirmed ASAP is a Democratic priority

The process of moving a nominee through the Senate is not as simple as taking a vote on the Senate floor. There’s paperwork to fill out and a hearing to hold in the Senate Finance Committee for lawmakers to pepper the nominee with questions before they vote to report him to the floor.

Rettig was nominated in February 2018, but a final confirmation vote wasn’t completed until that September.

It’s not clear how long Werfel’s confirmation in the Senate may take, and Republicans may try to slow down the confirmation process. With time running short for this Congress, and control of the Senate for the next Congress yet to be determined, Democrats are expected to make confirmation a top priority.

“I look forward to working with my colleagues to move his nomination as quickly as possible,” Wyden said.

(Updates with comments from Brady in 22nd paragraph.)

To contact the reporters on this story: Naomi Jagoda at njagoda@bloombergindustry.com; Chris Cioffi at ccioffi@bloombergindustry.com; Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Kim Dixon at kdixon@bloombergindustry.com; Alex Clearfield at aclearfield@bloombergindustry.com