Lawmakers Grill Biden’s IRS Chief Designates New Army of Agents, Backlogs, More

By Casey Harper (The Center Square)

President Joe Biden’s nominee to lead the Internal Revenue Service took tough questions from lawmakers in the Senate Finance Committee on Wednesday as the agency he wants to lead faces a series of controversies.

One of the biggest questions facing Biden’s nominee, former acting IRS Commissioner Daniel Werfel, is how he plans to handle the $80 billion included in the Inflation Reduction Act. Biden clarified that the money is intended to supercharge the agency’s audit efforts by hiring about 87,000 agents, who the president says will more than pay for the investment with new revenue.

Werfel assured lawmakers that the audit would target wealthier Americans.

“…audit and compliance priorities are focused on increasing the IRS’s capabilities and ensuring that America’s highest earners comply with applicable tax laws,” Werfel said.

Critics have argued that there aren’t enough wealthy Americans to audit to justify tens of billions of dollars for new auditors. The IRS countered the spirit of Werfel’s comments by recently announcing a program to crack down on tip reporting by waiters and waitresses.

“Stop the presses. No need to raise the debt limit,” Rep. Thomas Massey, R-Ky., wrote on Twitter. “Biden is following the advice of those billionaire waitresses,” he added, referring to Biden’s call for a tax on billionaires in the State of the Union.

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But those aren’t the only issues Werfel has to tackle if he secures the seat, which he’s expected to give Democrats a slim majority.

The IRS has fallen behind on tax returns in recent years because it was saddled with distributing COVID-relief checks to millions of Americans. Then-Commissioner Charles Rettig raised concerns about the impact of this additional burden many times during his tenure.

Now, the IRS still has millions of suspended and backlogged returns.

“Huge backlogs leave desperate families and small businesses waiting for much-needed income as they battle soaring inflation,” said US Sen. John Barrasso, R-Wyo., said during the hearing.

The tax-collecting agency was embroiled in its most significant controversy in years after news broke that the Biden administration was planning to have the IRS monitor bank transactions of more than $600 million. A bipartisan outcry followed, stalling but not ending the project entirely.

The IRS announced in January that it was delaying the reporting requirement for $600 transactions through services like Venmo for one year.

Other lingering issues are also plaguing the beleaguered firm.

Experts and lawmakers continue to push for answers after a report by the Treasury Inspector General for Tax Administration since 2021 that the IRS has destroyed nearly 30 million taxpayer records and raised eyebrows.

So far, the agency has offered little explanation for the destroyed files, which Americans may need for future audits.

“What specific documents were in the pile? Have any efforts been made to contact affected Americans? Americans for Tax Reform said in a statement. “Many Americans file forms, only to be told by the IRS that they never did. How do you make up for their lost time?

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All these problems have reduced the credibility of the tax collection agency, Barrasso said.

“Restoring the agency’s credibility is a steep mountain to climb. I said this will be a critical part of your job when we visited,” Barrasso added. “The policies enacted by President Biden’s reckless tax and spending bill are not really helpful in trying to regain the credibility of the American people for the agency.”

Syndicated with permission from The Center Square.