Senators questioned Donald Korb, Trump’s pick for the IRS’ chief legal advisor on Wednesday. Among their concerns – Korb’s recent harsh comments about career IRS official resignations.
Korb was tapped for the IRS Chief Counsel role in April. After a tumultuous summer at the IRS that saw the arrival and departure of Billy Long as commissioner – the other IRS role requiring Senate approval – the Senate Finance Committee convened this week to consider Korb’s nomination. A vote has not yet been scheduled, per a committee staffer.
At the hearing, Chair Mike Crapo (R-ID) lauded Korb, commenting that he already “knows the position well, having served in the role of Chief Counsel from 2004 to 2008.” Korb, too, spoke of his extensive past experience at the IRS, which also includes stints as “an entry-level lawyer in the Office of Chief Counsel” in the 1970s and assistant to former Commissioner Roscoe Egger in the 1980s. The latter role included work on the Tax Reform Act of 1986.
With the recent loss of many long-time IRS staffers, Korb’s experience could certainly help the agency as it works to implement the One Big Beautiful Bill (P.L. 119-21).
Comments on Past IRS Staff
However, Crapo and Ranking Member Ron Wyden (D-OR) began by questioning Korb on his negative comments about former IRS staffers – particularly, Doug O’Donnell, who most recently served as acting commissioner before resigning in late February.
Wyden contended that Korb, while discussing “the recent resignation of a career IRS official who served as acting commissioner,” told Senate Finance staffers that “the individual should have been shot for his decision to resign.”
Wyden also accused Korb of saying that “all the senior career officials who’ve made the decision to leave the IRS afterwards did so because they ‘wanted to show off to their woke friends.'”
Crapo chalked the comments up to Korb knowing, from his past experience, “how important it is to have reliable leadership at the IRS, especially during the tax filing season.”
But Wyden pushed Korb, asking, “How is it good judgment in what amounts to a job interview to say that you disagree with someone and they ought to be shot?”
To that, Korb simply replied that he “disagreed with the decision that Mr. O’Donnell made,” adding “I wish that he had not left when he did.” He noted that O’Donnell resigned in the middle of the filing season, which he called “the most critical time of the year for the agency.”
OBBB Implementation
Beyond Korb’s perhaps unwise comments about O’Donnell and other former IRS staffers, multiple senators questioned Korb about OBBB implementation.
“I’ve been through this before,” Korb stressed, citing his experience with the 1986 tax act. “I helped develop a process that was used by the IRS at that time to get guidance published for probably the largest tax bill in our lifetime,” he added.
Korb also reflected on his last term as Chief Counsel, where in 2004, he “had to deal with a major tax bill and worked very hard to get the appropriate guidance on time.”
“I understand that late guidance is not helpful at all,” Korb told lawmakers. And getting guidance out “in a timely fashion” is particularly important for provisions taking effect this year or next year, he added.
He promised to “make sure the guidance gets out in time to be beneficial to the American people.” And Korb says he’s ready for the heavy workload after serving as Chief Counsel as the 2004 law went into effect. “We increased the guidance over 40% in one year my last time around.”
Other Hot Topics
Senators raised a few, more specific, concerns about IRS policy and procedures. Democrats, including Senators Maggie Hassan (D-NH) and Sheldon Whitehouse (D-RI), asked Korb about whether – and how – he’d avoid politicizing the IRS.
As far as whether Korb would advise the IRS commissioner not to comply with a Trump administration order to audit a particular taxpayer, Korb simply replied he would “follow the law.” And when asked about how he’d respond to “outside political pressure into the internal personnel decisions of the IRS,” Korb said he “will not be swayed by people who are not in the agency telling me what to do.”
Another, more specific concern for both Senators Marsha Blackburn (R-TN) and Roger Marshall (R-KS) was the fate of the economic substance doctrine and Rev Rul 2024-14. That guidance addresses related-party partnership “basis-shifting” transactions. It provides that the IRS will disregard these transactions for federal income tax purposes if they are primarily tax-motivated and lack a substantial non-tax business purpose.
Blackburn explained that the vast majority of small businesses file as pass-through entities and are subject to this guidance – and increased audit risk. She called it “grossly unfair that businesses would be targeted specifically because of the way they choose to organize themselves.”
Korb noted that as Chief Counsel, he would advise the IRS, not “run the programs.” But he agreed that “the entity that you choose to organize yourself should not be a mark against you in terms of being chosen for audit activity.”
Take your tax and accounting research to the next level with Checkpoint Edge and CoCounsel. Get instant access to AI-assisted research, expert-approved answers, and cutting-edge tools like Advisory Maps and State Charts. Try it today and transform the way you work! Subscribe now and discover a smarter way to find answers.
