(Center Square)
President Joe Biden’s nominee to lead the Internal Revenue Service took a series of tough questions from lawmakers in the Senate Finance Committee on Wednesday as the agency he chooses to lead faces a series of controversies.
One of the biggest questions facing Biden’s nominee, former acting IRS Commissioner Daniel Werfel, was how he plans to manage the $80 billion included in the Inflation Reduction Act. Biden made clear that was meant to supercharge the agency’s audit efforts by hiring about 87,000 agents who the president claimed would pay more to invest with the new revenue.
Warfel promised lawmakers that the audits would target wealthier Americans.
“…audit and compliance priorities will be focused on increasing the IRS’s ability to ensure 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 billions of dollars for new auditors. The IRS recently announced a program to crack down on tip reporting from waiters and waitresses, seemingly contradicting the spirit of Werfel’s comments.
“Stop the press. No need to raise the debt limit,” Rep. Thomas Massey, R-Ky., wrote on Twitter. “Biden is following the tips of those billionaire waitresses,” he added, apparently referring to Biden’s call for a billionaire tax in the State of the Union.
RELATED: Biden draws fire over IRS targeting service industry tips on new plan
But that’s not the only issue Werfel faces if he secures the position, which he is expected to do given Democrats’ slim majority.
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The IRS fell behind on tax returns in recent years in large part as it grappled with distributing COVID-relief checks to millions of Americans. Then-Commissioner Charles Rettig expressed concern about the impact of this additional burden multiple times during his tenure.
Now, the IRS still has millions of pending and backlogged returns to work through.
“Massive backlogs have left frustrated families and small businesses waiting for much-needed returns as they battle skyrocketing inflation,” U.S. 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. Bipartisan outrage followed, pausing but not completely ending the plan.
The IRS announced in January that it was delaying the requirement to report $600 transactions through services like Venmo for one year.
Other lingering problems are also plaguing the agency.
Experts and lawmakers continue to press for answers after the Treasury Inspector General for Tax Administration’s report showing that the IRS destroyed nearly 30 million taxpayer records through 2021 raised eyebrows.
So far, the agency has offered little explanation for the destroyed files, which Americans may need for future audits.
“What specific document was the pile? Has there been any attempt to contact affected Americans?” Americans for Tax Reform in a statement. “Many Americans submitted forms only to be told by the IRS that they never did. How will you compensate them for lost time?
RELATED: Lauren Boebert celebrates GOP’s first bill slashing funding for IRS: ‘Conservative governance at its best’
Barrasso said all these factors undermined the credibility of the tax-collecting agency.
“Rebuilding the agency’s credibility is going to be a steep mountain to climb. When we visited I said that this will be important as part of your job,” Barrasso added. “The policies enacted by President Biden’s reckless tax and spending bill will not really help the agency try to restore credibility with the American people.”
Syndicated with permission from Center Square.