Biden announces nominee Danny Werfel to helm IRS

President Biden on Thursday nominated Danny Werfel, a former acting IRS commissioner who served during the Obama administration to head the agency.

Biden announced the decision to nominate Werfel, who currently serves at Boston Consulting Group, to replace IRS Commissioner Charles Rettig. The Treasury Department announced Rettig’s departure from the agency in late October.

Werfel’s nomination must be approved by the Senate, the control of which in 2023 remains unknown following the 2022 midterms.

Werfel was tapped by former President Obama in 2013 to take over IRS after a scandal involving the agency’s extra scrutiny of tax-exempt status for some conservative nonprofit organizations. At the time, Obama said that Werfel would help to restore confidence and trust in the IRS.

“Danny Werfel is a public and private sector leader who has served under both Democratic and Republican administrations,” the White House said in its statement.

“Across more than 15 years of government service, Werfel served President Barack Obama and President George W. Bush to lead some of the governments’ most complex management challenges as the Internal Revenue Service (IRS) Acting Commissioner and Office of Management and Budget (OMB) Controller.”

Treasury Secretary Janet Yellen said that Werfel’s management experience makes him the right person to lead an agency that’s undergoing a significant restructuring.

“His deep management experience, and his work directing significant transformation efforts, make him uniquely qualified to lead the agency at this critical juncture,” Yellen said in a statement.

“After decades of underfunding, the IRS now has the resources it needs to improve services for taxpayers and modernize outdated technology and infrastructure. Danny’s deep commitment to fairness and making sure government works for all will also be invaluable as we improve the taxpayer experience and eliminate a two-tiered tax system.”

Werfel’s selection represents something of a departure from the agency’s last chief, Rettig, who distinguished himself in the world of private practice tax law before joining government.

Werfel is more of a specialist in large, complex organizations than the intricacies of tax law itself, and many in the tax world had been anticipating this shift in expertise for the next phase of the IRS.

Werfel has also proven he can withstand a tongue-lashing from Republicans when put on the stand in Congress — an important trait for the leader of an agency that has dealt with accusations of politicization over decades from both the left and the right.

Top Ways and Means Committee Rep. Kevin Brady (R-Texas) put Werfel through the wringer in 2013 when he appeared to testify in light of the extra scrutiny from the IRS given to Tea Party groups.

“You don’t work for the IRS, you work for the American people,” Brady said to Werfel, calling an IRS report on the issue a “sham.” 

Werfel also helped to implement the bank bailout of 2008 following the collapse of the U.S. financial sector due to bad mortgages that were sold to people who couldn’t afford them.

“Werfel played a key role under the Bush Administration in the implementation of the Emergency Economic Stabilization Act of 2008, overseeing the efforts of the Office of Financial Stability to achieve a clean financial statement audit in its first year of existence,” the White House said in its statement.

Democratic members of Congress lauded Biden’s choice of nominee, after taking issue with Rettig on a variety of controversial issues, including the withholding of former President Trump’s tax returns.

“I applaud the Biden administration for moving to right our tax system,” Ways and Means Oversight Subcommittee Chair Bill Pascrell (D-N.J.), who had called for Rettig’s firing, said in a statement. 

“After Congress made a big investment in fixing the IRS, the agency needs a leader who can answer the phones, get refund checks out fast, and crack down on big business tax cheats. I look forward to hearing from Mr. Werfel on his plans and acting together for tax fairness. It’s time to make the IRS work for Americans again,” Pascrell said.

Senate Finance Committee Chair Ron Wyden (D-Ore.) called Werfel a “public servant who skillfully navigated numerous challenges during his decades of federal experience.”

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

—Updated 4:23 p.m.