Biden’s IRS Pick Says He’s the ‘Government Geek’ for the Job

President Biden’s nominee to lead the Internal Revenue Service vowed to address the chronic understaffing issues he said have plagued the agency, committing during a confirmation hearing Wednesday to a particular focus on those capable of auditing wealthy Americans’ complex taxes. 

Danny Werfel, a former acting IRS commissioner and Office of Management and Budget official under presidents in both parties, repeatedly sought to assure skeptical lawmakers on the Senate Finance Committee he would go about planning for those hires and other upcoming expenditures in a transparent and open way. Werfel, who appears likely to cruise to confirmation with bipartisan support, would enter the job just as the tax agency begins spending the $80 billion funding surge Congress provided it last year. IRS is expected to hire tens of thousands of employees with that funding, which Werfel stressed would help fill critical skills gaps that have hampered the agency’s ability to collect taxes. 

Werfel said in his eight months temporarily leading IRS in 2013 amid a scandal at the agency, he drew inspiration from its workforce’s commitment to the “solemn duty” of its mission. 

“I witnessed how dedicated and talented IRS civil servants are in fulfilling the critical mission of administering the nation’s tax system,” Werfel said. “Since leaving the IRS, I watched from afar how these employees navigated the challenges of historical underfunding and understaffing while providing economic lifelines to hundreds of millions of families and small businesses during the COVID-19 pandemic.”

While he pledged to help fill areas with shortfalls, he pushed back on reports IRS would use its new cash infusion to hire 87,000 enforcement agents who will target all Americans for increased audits. 

“I think it’s patently incorrect,” Werfel said. Instead, he pledged to focus on hiring “people with the understanding and capacity and talent to unpack the complicated, intricate returns, which is a capacity gap that exists today.” Much of the hiring will go, and has already gone, to customer service representatives. 

Werfel acknowledged meeting the demands of the upcoming hiring is “going to be very hard,” particularly with the retirements anticipated in the coming years within IRS’ aging workforce. He pledged to work with the Office of Personnel Management to ease hiring processes and to reach out to communities—such as former IRS employees—who may have particular interest in working at the agency. Bringing back those with experience at IRS would allow them to hit the ground running, he said. 

“Maybe not everybody, but there are individuals I think would be excited about the opportunity to serve their country in this particular way because they're interested in tax administration, they're fascinated by the world in which we operate,” Werfel said. “I'm excited in particular about how to get people outside the IRS today who we are going to need in the future.

IRS will be getting some help as it readies itself for its unprecedented surge in hiring. It has signed two contracts to assist with recruiting and background investigations, while OPM has provided expedited hiring authority for up to 10,000 Taxpayer Service and Enforcement positions annually through 2027.

IRS must produce a plan for spending its $80 billion over 10 years by Friday, per a request from Treasury Secretary Janet Yellen. Werfel, having not yet been confirmed, has played no role in drafting that plan, but pledged to several Republican lawmakers to allow for oversight of it. 

“I agree the plan that is put together should allow you, this committee, and the public to connect the dollars from the Inflation Reduction Act to the various activities and investments,” Werfel said. “I really want to earn this committee's trust. As a former budgeteer, I think I will earn this committee's trust by putting together a very clear plan for where this money is going.” 

Werfel noted that he learned the value of the civil service when he started his career in the 1990s in a General Schedule-9 position at OMB and promised to use his experience during the Deepwater Horizon oil spill, implementing the 2009 American Recovery and Reinvestment Act and leading IRS in his new role. Despite his time in government—he called himself “kind of a government geek”—Werfel in several instances said he wanted to get to IRS to learn how they are doing things before making any commitments to change. He took that approach when Sen. Marsha Blackburn, R-Tenn., suggested he no longer allow agency employees to telework full time. 

“I can’t commit until I’m at the IRS and understand where they are,” Werfel said. 

Lawmakers on the committee also pushed Werfel on the Biden administration’s pledge not to use Inflation Reduction Act funds to increase audits on anyone making less than $400,000 annually, to which Werfel also committed. Doing so, he explained, will require adding new skillsets to the agency’s workforce. 

“I'm not sure that training the current workforce will be sufficient,” Wefel said. “We want to hire and bring in experts, maybe some of the same individuals who earlier in their career prepared these very intricate returns and are ready to come back and potentially serve their country.” 

As its first legislative act in the 118th Congress, the new Republican majority in the House in a party-line vote approved a repeal of $71 billion in IRS funding. It left intact only the funding for customer service improvements, which Republican senators on Wednesday said were disproportionately underfunded in the Inflation Reduction Act compared to enforcement spending. Werfel said he was given “a mandate from Congress” and it was his job to ensure “that money is spent wisely.” 

At least one Republican, Sen. Thom Tillis, R-N.C., told Werfel he planned to support his nomination. Committee Chairman Ron Wyden, D-Ore., said after the hearing he wants to send Werfel’s nomination to the Senate floor quickly and would be talking to Senate Majority Leader Chuck Schumer, D-N.Y., on Wednesday about scheduling a floor vote as soon as possible after the chamber returns from the President’s Day recess.  

Lawmakers repeatedly thanked Werfel for his willingness to serve in what is typically a thankless job. 

“Best of luck to you in your pursuit of one of the most challenging and least popular jobs in town,” said Sen. Sheldon Whitehouse, D-R.I.