Who Will Replace IRS Commissioner Rettig?

By Nancy Cook and Laura Davison, Bloomberg News (TNS)

President Joe Biden is narrowing the list of candidates to lead the Internal Revenue Service ahead of a massive expansion of tax enforcement.

The names of potential nominees to succeed IRS Commissioner Charles Rettig, a Donald Trump appointee whose term expires in November, are closely held secrets within the White House and Treasury Department. People familiar with the search say the administration wants someone with deep management and business experience as opposed to a tax attorney, someone who can help to lead and transform the sprawling agency that processes more than 150 million individual tax each year.

The next commissioner will be thrown into the middle of a political maelstrom as Republicans are attacking the IRS by claiming that additional funding passed by Democrats would lead to a massive increase in the number of armed IRS agents and that enhanced enforcement would be aimed at middle-income taxpayers.

In recent days, White House aides have consulted Senate Democrats for their informal advice on what they would like to see in the next commissioner, and Senate Democrats are pushing for a candidate with bipartisan credibility who can work well with Republicans, in case the GOP takes over the House following the November mid-terms.

No IRS commissioner has served two terms since the IRS Restructuring and Reform Act of 1998 which set up the current term structure. The White House hasn’t yet officially told Rettig they are not re-nominating him for the job when his term expires Nov. 12, said one Biden ally briefed on the search. A spokesman for Rettig didn’t immediately respond to a request for comment.

The turnover in the top job comes at a crucial time for the IRS, as an infusion of $80 billion from the Inflation Reduction Act will used to rebuild the agency’s enforcement capacity and upgrade its computer systems. Any new commissioner will also oversee how that funding is deployed in the agency that has been plagued staffing shortages and technology challenges for roughly a decade.

The IRS commissioner job is subject to Senate approval. The chamber’s limited schedule in Washington for the remainder of the year means that Biden will likely have to select someone to lead the agency in an acting capacity while the nominee awaits for a Senate vote.

That wait could be even longer if Republicans win a Senate majority in the November election and Democrats aren’t able expedite the confirmation in the lame duck session after the election and before the new Congress is installed.

The IRS is under great scrutiny following the leak of thousands of internal documents and tax returns to the non-profit newsroom, ProPublica. If the Republicans take control of the House next year after the midterm elections in November, the commissioner can expect renewed efforts to investigate the agency.

The incoming commissioner could also potentially be the target of impeachment attempts from far-right House lawmakers. That was the case for former IRS Commissioner John Koskinen, whom House Republicans repeatedly, and unsuccessfully, tried to impeach following reports that the IRS’s non-profit division was slow-walking requests for tax-exempt status from conservative groups.

The IRS is likely also to continue to face questions from Democrats about the decision to audit former FBI Director James Comey and his deputy Andrew McCabe—both outspoken critics of Trump—in the same year.

The IRS commissioner job has historically been a difficult post to fill partially because of the special skills needed to lead an agency of roughly 80,000 employees that is responsible for collecting the revenue that funds the federal government.

Koskinen, who served as IRS commissioner from 2013-2017, said that Biden should prioritize picking someone experience managing a large budget and big organization over someone who is a tax expert.

“The last thing in the world the IRS needs is more tax expertise,” Koskinen said at a Tax Policy Center event Thursday. “What the IRS needs in the next commissioner is somebody who can take advantage of this funding, organize internally to deal with it, take the plans that exist, update them, modify them as appropriate, and deal with the significant challenge of hiring the right people in the right numbers.”

Biden will also have the opportunity to select the IRS’s chief counsel, the top lawyer at the agency, which is the only other political appointee position at the large civil servant agency.

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