Biden taps federal fiscal vet Danny Werfel to head IRS

President Joe Biden on Thursday announced he plans to name Danny Werfel, who has held top economic posts in both Democratic and Republican administrations, to head the IRS during a potentially transformative period for the agency.

If confirmed by the Senate, Werfel would take charge at the agency in the wake of an $80 billion influx of funding by Congress designed to ramp up scrutiny of the wealthy, improve taxpayer services and modernize woefully out-of-date technology.

But Werfel’s confirmation process could be rocky, especially if Republicans win control of the Senate in the still-unresolved midterm elections. Republicans have relentlessly attacked the Democratic-crafted funding boost, portraying it as a threat to ordinary taxpayers, and some have vowed to claw back the money.

It wouldn’t be the first time Werfel ran the agency amid heightened scrutiny by lawmakers. He was brought in as acting commissioner in 2013 by the Obama administration in the wake of a political targeting scandal involving conservative advocacy groups that had infuriated Republican lawmakers.

Werfel would replace Chuck Rettig, whose term ends Nov. 12.

The White House emphasized Werfel's government service under both parties, which may ease partisan tensions.

“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,” the administration said in a statement.

For the past nine years, Werfel has worked at the Boston Consulting Group. He was also previously controller at the White House Office of Management and Budget.

It’s unclear when the Senate might take up the nomination. There had been chatter Democrats could potentially move it during a lame-duck session of Congress, especially if Republicans pick up enough seats to control the Senate next year. But if Democrats retain the chamber — several key races are still undecided — there will be less urgency to act quickly.

Werfel is certain to face hostile questions from Republicans about how the administration intends to spend that $80 billion.

Republicans campaigned hard against the money in the midterms, pointing to an administration plan to hire 87,000 people, predicting that would translate into more audits of average Americans.

The administration scoffed, saying many of those hired would replace people who retire, but it has left many questions about its plans for the agency unanswered. It plans to release a report in February detailing its vision for the agency.

Republicans will also be closely watching how the IRS implements a complicated new initiative Democrats created as part of their recent health care, climate and tax legislation that allows companies, for the first time, to sell green-energy tax breaks.

The administration had considered nominating Rettig to another term, but some Democrats, particularly in the House, were adamantly opposed.

While Rettig had won praise for the agency’s implementation of Democrats’ Child Tax Credit payment program and multiple rounds of stimulus checks, his term was also pocked by controversies. Many Democrats were incensed by news that a leading critic of President Donald Trump — former FBI Director James Comey — as well as his deputy had been audited by the IRS.

Rettig had said there was nothing political about the audits and that the odds of both of them being selected were not as long as it might appear.

Congressional Democrats welcomed Werfel's nomination.

“Danny is committed to government that works and rebuilding the IRS, with a focus on modernizing decades-old technology and improving administration,” said Senate Finance Committee Chair Ron Wyden (D-Ore.) in a statement.

“Americans interact with the IRS more than any other federal agency and I’m confident he will effectively deploy the new resources approved by Congress to better serve American taxpayers and ensure the wealthiest Americans and most profitable corporations pay the taxes they owe.”

Agency veterans too praised the pick.

“He will be able to speak with credibility to Congress because he’s a straight shooter,” said former IRS Commissioner Mark Everson.

Werfel “did a really good job” as acting commissioner when he was “parachuted into the IRS” amid tensions over how the IRS had handled applications from conservative groups seeking tax-exempt status, said former IRS Chief John Koskinen.

The administration has appointed agency veteran Douglas O’Donnell to serve as acting commissioner while Werfel awaits confirmation.

Benjamin Guggenheim contributed to this report.