Biden to Nominate Former Obama and Bush Official to Lead IRS Overhaul

President Biden said he intended to nominate Daniel Werfel to become the next commissioner of the Internal Revenue Service, tapping an official who served under both President Barack Obama and President George W. Bush to lead the agency as it embarks on an $80 billion overhaul.

If he is confirmed by the Senate, Mr. Werfel will be responsible for overseeing a central pillar of the Biden administration’s economic agenda, which includes trying to ensure that businesses and individuals pay the taxes they owe. Mr. Werfel will also be in charge of modernizing a sprawling institution that has been starved of resources for decades.

He would take the reins at a fraught moment for the agency, which has been under fire from Republican lawmakers who have objected to giving additional funds to the beleaguered agency. Mr. Werfel is likely to find his agency under intense scrutiny if Republicans take control of the House of Representatives. That could include investigations into how the agency’s new funding, which was allocated this year through the Inflation Reduction Act, is being spent.

But Mr. Werfel is accustomed to scrutiny of the I.R.S. He became acting commissioner in 2013 after Mr. Obama ousted another acting commissioner in the wake of an inspector general’s report that found bias in the determination of tax-exempt status for nonprofit organizations.

The nomination came as the current I.R.S. commissioner, Charles P. Rettig, is set to step down at the end of his term this week. The White House was slow to pick a replacement, raising concern among former commissioners that the effort to revamp the I.R.S. could be derailed, particularly if Democrats lose control of Congress.

While the legislative calendar is coming to a close, it is possible for the Senate to confirm Mr. Werfel before a new Congress takes over in January. However, lawmakers have a spate of must-pass bills to get through before Congress adjourns for the year.

Treasury Secretary Janet L. Yellen, who oversees the I.R.S., praised the nomination on Thursday.

“After decades of underfunding, the I.R.S. now has the resources it needs to improve services for taxpayers and modernize outdated technology and infrastructure,” Ms. Yellen said in a statement. “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.”

Mr. Werfel served from 2009 to 2013 as Controller of the Office of Management and Budget in the Obama administration before becoming the acting I.R.S. commissioner. A longtime O.M.B. official, Mr. Werfel also worked in the Office of Financial Stability during the Bush administration and helped oversee the implementation of the Emergency Economic Stabilization Act of 2008.

For the last nine years, Mr. Werfel has been employed at the Boston Consulting Group, working with government agencies as part of its public sector group.

In announcing the nomination, the White House underscored Mr. Werfel’s bipartisan experience. It is not clear if Democrats will be able to confirm Mr. Werfel without the support of Republicans, who have been unified in trying to undermine the efforts to bolster the I.R.S.

Funding for the agency became a priority for the Biden administration as it looked for ways to raise tax revenue without increasing tax rates this year. White House and Treasury officials determined that they could raise more than $120 billion in additional tax revenue by expanding the enforcement capabilities of the I.R.S. and by making it more responsive to taxpayers.

Ms. Yellen said Mr. Werfel would also play an important role in rolling out new clean energy tax incentives, which she said would increase production in the United States and lead to more job creation.

She said his “deep management experience and his work directing significant transformation efforts” made Mr. Werfel uniquely qualified for the job.

Ana Swanson contributed reporting.


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