The nominee to lead the Internal Revenue Service (IRS), Daniel Werfel, faced tough questions from lawmakers on the Senate Finance Committee regarding the agency’s handling of various controversies.
“…the audit and compliance priorities will be focused on enhancing the IRS’ capabilities to ensure America’s highest earners comply with applicable tax laws,” Werfel said.
One of the main issues is the $80 billion included in the Inflation Reduction Act meant to boost the IRS’s auditing efforts by hiring 87,000 agents. Werfel promised to focus on auditing wealthier Americans to ensure they comply with tax laws. However, critics have argued that there are not enough wealthy Americans to justify the investment in new auditors.
“Stop the presses. No need to raise the debt limit,” Rep. Thomas Massie, R-Ky, wrote on Twitter. “Biden is going after those billionaire waitresses’ tips,” he added, apparently referencing Biden’s call for a billionaires tax in the State of the Union.
“Massive backlogs have left desperate families and small businesses waiting on much needed returns as they fight skyrocketing inflation,” U.S. Sen. John Barrasso, R-Wyo., said during the hearing.
Additionally, the IRS has fallen behind on tax returns due to the burden of distributing COVID-relief checks and has millions of suspended and backlogged returns to process. The agency has also faced controversy over plans to monitor bank transactions over $600, which sparked bipartisan outrage and was paused but not altogether ended.
Furthermore, a report from 2021 showed that the IRS destroyed around 30 million taxpayer documents, raising concerns from experts and lawmakers about Americans needing those documents for future audits.
“What specific documents were in the pile? Were any attempts made to contact affected Americans?” Americans for Tax Reform said in a statement. “Many Americans submitted forms only to be told by the IRS that they never did so. How will you compensate them for their lost time?”
“Restoring the credibility of the agency is going to be a steep mountain to climb. When we visited I said this would be critical as part of your job,” Barrasso added. “The policies enacted by President Biden’s reckless tax and spending bill are really not going to be helpful in trying to regain the credibility of the American people for the agency.”
Senator John Barrasso said that all of these issues have diminished the credibility of the IRS, and restoring it will be a significant challenge for the new IRS leader.
