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Biden to replace IRS commissioner as Democrats seek to revamp tax agency

By on October 28, 2022 0

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The Biden administration will replace Internal Revenue Service Commissioner Charles Rettig when his term ends in November, Treasury Secretary Janet L. Yellen announced Friday.

Douglas O’Donnell, deputy commissioner and longtime IRS official, will lead the agency on an interim basis starting Nov. 12.

Rettig, a former Beverly Hills tax attorney, has had a tough tenure since taking on the IRS role in 2018. Appointed by then-President Donald Trump, he rejected subpoenas from the Congress to hand over Trump’s tax records. When Biden took office, many congressional Democrats called for Rettig to be fired.

Instead, Biden left him in place to complete the position’s five-year term. Rettig’s reputation improved among liberal lawmakers as the IRS worked feverishly to hand out coronavirus stimulus payments and administer a tax code made more complex by pandemic-related economic upheaval.

In March, the IRS deployed surge teams of employees and went on a hiring spree to sort through a backlog of 24 million tax returns, a amount of paperwork officials said it probably wouldn’t be able to overcome until late 2022.

IRS rushes to hire 10,000 workers, but giant backlog set to linger through 2022

Democrats then pushed through legislation to bolster Rettig’s agency, giving it $80 billion to invest in better enforcement capabilities, more staff, improved IT systems and improved taxpayer services.

The money, which is part of the landmark Inflation Reduction Act passed this summer, drew sharp rebukes from Republicans who made baseless claims that the funding would be used to arm federal workers. Some conservatives, including House Minority Leader Kevin McCarthy (Calif.), have speculated that the IRS could use its enhanced resources to carry out raids similar to the FBI’s search of Trump’s Mar- a-Lago.

The rhetoric has led to an increase in threats against IRS employees, Rettig and union leaders told The Washington Post. Rettig ordered a security review of agency offices nationwide in response.

In some quarters, the new funding was seen as a vote of confidence in Rettig from the Biden administration, especially since Rettig’s forceful response on employee safety endeared him to staff members. . But Biden appears poised to name a permanent successor in the coming weeks, likely before a new Congress is installed in 2023.

“I want to thank Commissioner Rettig for his tireless service to the American people through two administrations, and his leadership of the IRS during the difficult and unique challenges posed by covid-19,” Yellen said in a statement. “I am grateful to him for his partnership and his efforts to ensure that taxpayers have the resources they need to get through the pandemic.”

She added that O’Donnell, the deputy commissioner for services and enforcement, “has dedicated his career to serving American taxpayers at all levels of the agency.” He started working at the agency in 1986 as a tax agent.

Rep. Bill Pascrell Jr. (DN.J.), one of Rettig’s top critics, said in a statement that the Biden administration was “right to end the tenure of Donald Trump’s IRS commissioner.” .

“With Democrats providing new funding to revitalize the IRS, we expect strong leadership to steer the IRS ship into clearer waters,” Pascrell said. “Many Americans have lost faith in the IRS. The agency needs to do a better job with the basics of listening to American taxpayers, as well as more cracking down on big business tax cheats and creating a more great equity for ordinary Americans.

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