Current IRS Commissioner Danny Werfel spoke at a tax conference hosted by the University of Texas following President-elect Donald Trump’s announcement Wednesday that he intends to replace Werfel with a former congressman who sought to abolish the agency and overhaul the Tax Code.
In a social media post Wednesday evening, Trump stated his intention to nominate former House Representative Billy Long (R-MO) as IRS commissioner. Long, 69, represented Missouri’s seventh congressional district from 2011 to 2023. He ran for the Senate in 2022 but placed fourth in the Missouri Republican primary election behind eventual winner Eric Schmitt.
“I have known Billy since 2011 — He is an extremely hard worker, and respected by all, especially by those who know him in Congress,” said Trump. “Taxpayers and the wonderful employees of the IRS will love having Billy at the helm.”
Although the Trump transition team says Long will be “appointed” as commissioner, the role is subject to Senate confirmation.
Werfel responds.
Speaking at the University of Texas Taxation Conference on December 5, Werfel said he believes it’s not his place to comment on Trump’s nominations. “I think the folks that should comment on them are the incoming administration, the transition team, and as appropriate, the nominees themselves.”
Werfel emphasized that he would stay “laser focused” on IRS readiness for the start of the next filing season in early 2025. “We’re nearing 170 million filers,” said Werfel, likening the tax system to a train system. “Eventually you have to invest in new stations and new capacities and longer train cars, otherwise the platforms just get more and more crowded, and the system starts to underperform.”
Werfel, picked by President Biden, was sworn in March 2023 as the 50th IRS commissioner for a term ending in 2027. Deputy Commissioner Doug O’Donnell served as acting commissioner from November 2022 until Werfel’s confirmation. The previous commissioner, Chuck Rettig, was appointed during Trump’s first presidential term.
Joining Werfel was former IRS Commissioner Larry Gibbs, who served under Presidents Ronald Reagan and George H.W. Bush in the 1980s. Gibbs agreed that getting the filing season right is of utmost importance. He offered a “cautionary tale” of IRS failures in 1985 after the agency “changed out its hardware and software, and its computer system,” and “they did not work.”
The failure, said Gibbs, “affected every single constituent of every single politician” and “the errors that were created in the process were enormous and took five to 10 years to really work through.” Gibbs pointed out that the 1985 filing debacle involved 80,000 refunds — far fewer than Werfel’s projection of over 100 million refunds for the upcoming filing season.
Both Werfel and Gibbs said that the IRS — and the agency’s budget — is “not really about politics.” Gibbs added that the “IRS has to be has to be an apolitical agency.”
Werfel said it was the role of the administration to decide whether they “want a massive tax cut, or a massive tax increase, or something in between.” He described the IRS as “agnostic,” adding, “we just want a seat at the table” to provide “ideas for how it would be implemented.”
Gibbs made his views on Trump’s pick for IRS commissioner clear. “Danny is the right person at the right time,” he said. “We don’t need a tax lawyer as a commissioner.”
Other Trump nominations.
The nod to Long follows Trump’s selection of billionaire hedge fund manager Scott Bessent as secretary of the Treasury Department, who would replace Janet Yellen.
Also on Wednesday, Trump tapped University of Maryland finance professor Michael Faulkender as deputy secretary, a role currently held by Wally Adeyemo. Faulkender previously served in the Treasury Department as assistant secretary of economic policy and is credited with helping launch a paycheck relief program during the COVID-19 pandemic.
New Treasury leadership was to be expected as part of the usual changing of the guard between administrations, but the move to oust a sitting IRS commissioner mid-term drew pushback from congressional Democrats.
Lawmakers react.
Senate Finance Committee Chair Ron Wyden (D-OR) — soon to become the ranking member of the committee when Republicans assume control in January — criticized Trump for not allowing Werfel to serve out his full term. Biden, as Wyden noted, did not seek to replace Rettig during his presidency.
“Since Mr. Werfel has been on the job, the IRS has vastly improved taxpayer service, set up a tremendous direct-file system, and begun badly-needed crackdowns on ultra-wealthy tax cheats who rip off law-abiding Americans,” said Wyden in a statement.
“If Trump fires Mr. Werfel, it won’t be to improve on his work; it’ll be to install somebody Trump can control as he meddles with the IRS,” the statement continued. “It’s public knowledge that Trump sought to sic the IRS on people he saw as political enemies during his first term. There is no reason to believe he’ll behave any differently in his second.”
House Representative Don Beyer (D-VA), who serves on the House Ways and Means Tax Subcommittee, echoed in his own statement shared on social media that Werfel “has done an excellent job rebuilding the IRS, boosting customer service and enhancing enforcement aimed at wealthy tax evaders.”
Fair Tax Act.
Beyer took aim at Long’s tax policy tax record during his time in Congress. Long was among the 75 Republican cosponsors to the Fair Tax Act (H.R. 25/S. 18), first introduced in 2015 by Representative Rob Woodall (R-GA) and then again in 2017.
The bill would have phased out all IRS funding and abolished the agency in 2019. It also would have scrapped the income tax system and replaced it with a 23% national retail sales tax primarily administered by the states. This includes the federal individual income tax, corporate income tax, payroll taxes, the self-employment tax, and estate and gift taxes.
A Congressional Research Service report from 2017 explained that under the proposal, the Social Security Administration would administer a monthly sales tax rebate to registered qualified families, and that Social Security and Medicare benefits would be instead funded by the national retail sales tax. States would have had the option to collect the tax “on behalf of the federal government in exchange for a fee,” per the report.
Employee Retention Credit.
Beyer also accused Long of being a promoter of the “fraud-riddled” Employee Retention Credit (ERC) program since leaving Congress and advising businesses to make new claims of the COVID-era incentive for employers to continue paying workers during lockdown. The IRS stopped accepting ERC claims in response to a deluge of fraudulent and improper claims.
The IRS did not immediately respond to Checkpoint’s request for comment.
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.
