Don't Mess With Taxes

Internal Revenue Service Commissioner Danny Werfel speaking to students, faculty, and IRS guests at the Kogod Tax Center at American University in Washington, D.C., in March 2024 about the tax agency's digital transformation plan.

In addition to tax code changes expected this year, the federal agency charged with enforcing those laws also is getting a shakeup.

Donald J. Trump announced in December he wants former Missouri congressman Billy Long to lead the Internal Revenue Service.

While Long is expected to be approved given the Republican majority in the Senate, he has some issues that will be raised during his confirmation hearing. Some lawmakers are concerned about Long’s connection to a group that pushed dubious Employee Retention Credit (ERC) tax claims.

Then there's the matter of the current IRS Commissioner Danny Werfel. Werfel was appointed in 2023 by President Joe Biden to help modernize the tax agency, and has nearly three years left on his term. Or had.

Not a normal transition: In the past, incoming administrations typically have allowed nonpolitical government officials like the IRS commissioner to complete their full terms. But as we all well know, Trump and his crew are not big on following norms, guidelines, or even written rules.

Werfel knows that, too. And on Friday, Jan. 17, he told his colleagues at the IRS, and Richard Rubin of the Wall Street Journal, that he would resign his commissioner post on Monday, Jan. 20, Trump’s second inauguration day.

Douglas O’Donnell, a senior career IRS official, will serve as acting commissioner until Werfel’s replacement is confirmed. O'Donnell previously served in that interim post from November 2022 to March 2023, during the transition from Chuck Rettig, who was Trump’s first IRS commissioner, and Werfel.

In light of this upcoming change to the one federal agency that most directly affects almost every U.S. citizen, this weekend’s Saturday Shout Outs go to articles on Werfel’s resignation.

Naturally, the first shout goes to the newspaper that broke the story.

IRS Commissioner to Quit as Trump Takes Office, writes Wall Street Journal’s tax policy reporter Richard Rubin. “I had to recognize that the incoming team wanted to go in a new direction,” Werfel told Rubin in an interview ahead of a message the departing commissioner sent Friday, Jan. 17, to IRS employees announcing his exit.

Werfel said he worried about the complications of remaining in office while the Senate considers Long’s nomination without a strong signal that the incoming administration wanted him to stay. “It’s therefore hard to predict what type of distractions this unprecedented scenario would create,” Werfel said.

IRS commissioner to resign as Trump eyes replacement, writes Jacob Bogage in the Washington Post. Bogage quotes Werfel on this latest breaking of norms by Trump.

“There’s a precedent for having commissioners complete their five-year terms, and when the president announced his plans to replace the IRS leadership, it signaled that he was moving away from that precedent. I am a fan of that precedent. I think that precedent helps for continuity and aligns with the IRS’s nonpartisanship. But I also recognize that the president has the authority to remove a commissioner at will and to select a new commissioner.”

Additional coverage on Werfel’s upcoming departure comes from —

• I.R.S. Commissioner to Quit as Trump Takes Office, by Andres Duehren for the New York Times;
• IRS chief to step down upon Trump's inauguration, well before his term expires, by Eric Katz for Government Executive;
• Werfel to resign Monday as IRS commissioner, by Neil Amato for The Tax Adviser;
• IRS head to resign 3 years before his term expires, as Donald Trump takes office, by Davis Winkie for USA Today;
• IRS Chief Danny Werfel to Resign on Jan. 20, by Jason Bramwell for CPA Practice Adviser; and
• IRS Commissioner Daniel Werfel says he’ll step down on Trump’s Inauguration Day, by Fatima Hussein for AP News.

Stalled agency modernization? On a personal note, I appreciate Werfel’s efforts to move the IRS into the 21st century.

And I share his hope that the incoming administration will continue to take advantage of the agency’s momentum in this area.

“Enough progress has been made that important wins for taxpayers are on the horizon in the coming year or two, and I think the new administration will benefit from taking us across the finish line on some of the projects that are underway,” the soon to be ex-commissioner said.

But the realist in me has a nagging feeling that Werfel, I, and lots of taxpayers are going to be disappointed over the next four years.

You also might find these items of interest:

• IRS Commissioner in Trump’s first term was a California tax attorney
• 2025 tax season, including expanded Direct File in 25 states, starts Jan. 27
• 13 famous tax quotes, including Goldberg's tax evasion assessment (on page 12)

Advertisements

🌟 Search Amazon Tax Products 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.