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Smooth sailing at Senate panel for Obama’s nominee to head IRS

December 12, 2013

By Patrick Temple-West, Kevin Drawbaugh and Eric Beech

WASHINGTON (Reuters) – The top Republican on the U.S. Senate’s tax-writing panel on Wednesday endorsed President Barack Obama’s nominee to be the next chief of the Internal Revenue Service, smoothing the path for what will likely be a prompt Senate confirmation.

John Koskinen, in a hearing before the Senate Finance Committee, promised to address concerns raised by Republicans about new IRS rules for tax-exempt organizations and the agency’s implementation of the 2010 Affordable Care Act.

Senator Orrin Hatch of Utah, the committee’s ranking Republican, told Koskinen: “I want to see you confirmed, and I will do what I can to see it happen.”

Republican Senator Rob Portman of Ohio also said he supported Koskinen’s confirmation.

Democratic Senator Max Baucus, the committee’s chairman, said he aimed to hold a committee vote on the nomination on Friday. Approval would send it to the full Senate, which is controlled by Democrats.

The IRS has had a tough year. In May, a crisis exploded around the agency’s practice of applying extra scrutiny to applications for tax-exempt status from conservative political groups. The furor that ensued cost the acting IRS chief his job.

The IRS’s reputation for political impartiality was damaged, even as it struggled to handle the heavy burden of helping to implement Obama’s complicated healthcare law.

Koskinen, 74, is a Democrat who stepped in to run mortgage giant Freddie Mac five years ago when it was engulfed by the credit crisis. He is a multimillionaire philanthropist and lawyer with little tax experience, but he has built respect among Democrats and Republicans as a troubleshooter.

At his hearing, he faced no contentious exchanges with committee senators. The session on Wednesday was a continuation of one that ended abruptly on Tuesday after an unidentified Republican senator invoked a seldom-used procedural rule to halt it. No fallout from that episode was apparent on Wednesday.

The IRS’s current chief, acting Commissioner Danny Werfel, is scheduled to leave at the end of the year.

Koskinen promised Republicans he would play a central role in finalizing proposed IRS rules, released in November, that are supposed to define political activity for tax-exempt groups.

Some Republicans criticized the rules as too broad and for not applying to tax-exempt labor unions. “The regulations need to be evenhanded,” Koskinen said.

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Eric Beech)