Lack of IRS nominee raises concerns

IRS watchers are becoming more and more concerned about how long it is taking the White House to nominate a replacement for outgoing IRS Commissioner Charles Rossotti. The IRS Oversight Board, a seven-member panel charged with recommending candidates for the top tax job, sent two names of potential nominees to the White House on April 10, spokeswoman Joelle Jordan said. Board Chairman Larry Levitan said in February that he hoped the White House would nominate, and the Senate would confirm, a new commissioner before Congress' August recess. That way, the new chief would be able to spend some time with Rossotti before Rossotti's five-year term expires on Nov. 12. But the White House has yet to even name a nominee.

"We're still hopeful that we'll get a name before the end of the legislative session, but we won't be surprised if it doesn't happen," said Jill Gerber, spokeswoman for Senate Finance Committee ranking member Charles Grassley, R-Iowa. The Finance Committee will vet the White House's candidate for the IRS.

Rossotti took over the IRS in 1997 amid widespread criticism of the tax agency for its treatment of taxpayers and its handling of technology modernization. President Clinton appointed Rossotti in large part because of his experience as an executive at Fairfax, Va.-based technology firm American Management Systems. Most previous commissioners had been tax experts, not management experts. Rossotti started the IRS along a path of reorganization laid out in the 1998 IRS Restructuring and Reform Act, which was aimed at modernizing the agency's computer systems and focusing the agency more on customer service. The IRS must balance those goals with its mission to get delinquent taxpayers to pay up. Rossotti and IRS observers say the reform effort will take a decade. The agency needs a confirmed leader, observers said. "I'm very concerned," said oversight board member Robert Tobias, a former president of the National Treasury Employees Union. "Continuity is so critical at the IRS right now. In any large, significant change effort, you're either falling backward or going forward. There's no holding steady." Tobias said Treasury officials told Oversight Board members at an end-of-July meeting that candidates are being considered for the IRS job. The White House does not have to accept either of the candidates recommended by the Oversight Board. The board in December hired Russell Reynolds, a New York-based executive search firm, to find candidates with backgrounds similar to that of Rossotti. CEO-level management and technology experience were key criteria.

Board members would not name the two candidates the board recommended to the White House. Colleen Kelley, president of the National Treasury Employees Union, said the early action of the oversight board should have left time for the next commissioner to spend time with Rossotti at the IRS. "The reorganization is really far from done," Kelley said. "I think some things need to be revisited, with an eye toward what we've learned so far." Sharon Cranford, director of public policy and external relations for the National Association of Enrolled Agents, said she has heard through the grapevine that the administration's push for a new IRS commissioner is moving along well. Lara Birkes, a spokeswoman for Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said the IRS commissioner is such an important position that there's little doubt the Senate would make confirmation a priority. "We'll move forward as quickly as possible as soon as a nominee is named," Birkes said. But Paul Light, senior adviser to the Brookings Institution's Presidential Appointee Initiative, said the administration might hold off on a nominee until after the November elections.

"Word is that there are several current and former members of Congress who might like this job," Light said. "If the past is prologue, we won't see a nominee until after the November elections when at least some Republicans become available candidates." In the 1998 reform act, Congress established a five-year term for the IRS commissioner to encourage continuity of management. The IRS has a history of jerking back and forth between competing demands and frequent reorganizations. The Federal Aviation Administration administrator also has a fixed five-year term. Administrator Jane Garvey's term ended this month. The White House nominated her replacement, Marion Blakey, on July 26. Deputy Administrator Monte Belger had planned to retire at the end of July, but he agreed to stay on as acting administrator for another month at the request of Transportation Secretary Norman Mineta. If Rossotti's replacement is not confirmed before he leaves, IRS Deputy Commissioner Robert Wenzel would likely serve as acting commissioner.