IRS Commissioner Danny Werfel is planning to resign on Jan. 20 despite having more than two years left in his term, the Wall Street Journal and several other outlets reported on Friday.
His decision to step down on Inauguration Day rather than be removed from his position by President-elect Donald Trump quashes any potential conflict between Werfel and the incoming administration, the WSJ noted.
“After significant introspection and consultation with others, I’ve determined the best way to support a successful transition is to depart the IRS on January 20, 2025,” Werfel said in a note addressed to all IRS employees, as reported by the Associated Press. “While leaving a job you love is never easy, I take comfort in knowing that the civil servant leaders and employees at the IRS are the exact right team to effectively steward this organization forward until a new IRS Commissioner is confirmed.”
Trump said last month he is selecting former U.S. Rep. Billy Long (R-MO) to serve as IRS commissioner, enlisting a Republican who served in Congress for an incoming administration aiming to renew and expand a broad package of tax cuts. The Senate still has to approve Long’s nomination.
Until then, IRS deputy commissioner Douglas O’Donnell will take over as acting commissioner, Werfel told agency employees, according to the WSJ. O’Donnell will lead the agency as it enters the 2025 filing season, which begins on Jan. 27. O’Donnell served as acting IRS commissioner from late November 2022 until March 2023—the period after Charles Rettig stepped down as chief of the tax agency and until Werfel took over.
During his first administration, Trump didn’t fire then-IRS Commissioner John Koskinen, despite Koskinen often being at odds with House Republicans, allowing his term to end. Trump then nominated Rettig, a California tax attorney to serve as IRS commissioner. Rettig served in that post from 2018 to 2022.
“Danny was the right person at the right time to lead the IRS transition into a highly modernized agency able to efficiently and effectively deliver meaningful taxpayer services and an appropriate tax enforcement presence,” Rettig said in a post today on LinkedIn. “Although these tasks are far from complete, the Service is in a significantly better place going forward thanks to Danny Werfel and the entire dedicated IRS workforce.”
Werfel was sworn in as the 50th commissioner in the history of the IRS on March 14, 2023. His term was scheduled to end after Nov. 12, 2027.
Earlier in his career, Werfel worked for the federal government under both Republican and Democratic administrations. He began his career at the Office of Management and Budget in 1997 during the Clinton administration as a policy analyst in the Office of Information and Regulatory Affairs. He continued his work at the OMB during the Bush and Obama administrations.
After serving as OMB deputy controller, Werfel was nominated by President Barack Obama to be controller of the OMB in 2009, a post he served in for four years before becoming acting commissioner of the IRS on May 22, 2013.
Werfel followed Steven Miller as acting commissioner of the IRS after Miller resigned on May 15 of that year. Miller departed after the IRS admitted to improperly scrutinizing the federal tax-exempt status of some conservative groups. Werfel stayed on as acting commissioner until Koskinen was nominated and confirmed as IRS commissioner later in 2013.
Werfel joined Boston Consulting Group in 2014 and was the global leader of the consulting firm’s Public Sector practice before taking over as IRS commissioner. He previously led BCG’s Public Sector practice in North America.
Werfel was tasked with overseeing and implementing a plan for the roughly $79 billion the agency received from the Inflation Reduction Act of 2022. The money would be spread out over 10 years and be used to modernize its business systems, improve taxpayer services, hire new employees, and to bolster tax enforcement.
However, a good chunk of that money was clawed back, as a 2023 debt ceiling and budget cuts deal between Republicans and the Biden administration led to $1.4 billion being rescinded from the IRS and a separate agreement was reached to take $20 billion from the agency and distribute those funds to other nondefense programs.
“Eminently qualified for the role, [Werfel] ably led the beginning of the agency’s massive transformation into a modern tax authority,” Melissa Wiley, a tax controversy and litigation attorney at the law firm Lowenstein Sandler, wrote on LinkedIn. “Regardless of the reservations I have about some of the IRS’s positions and actions over the past two years, I never doubted that the people at the top were doing their best and working tirelessly to make the right calls. We were lucky to have someone as capable and committed as Danny for the time we did.”
Lauren Wittenberg Weiner, who Werfel hired to replace him as a policy analyst at the OMB in 2000, called him a “mentor” in a LinkedIn post today and wrote, “I am a better policy analyst and a better leader for the guidance he has provided over many years.”
“He is a true public policy wonk and a true mensch (which, if you know me, are two of the highest compliments I can possibly give),” she wrote. “Politics aside—which has always been Danny’s approach to policy—the country is both measurably and immeasurably better for his decades of service.”
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Tags: IRS
