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Smith: IRS Chief Nominee Must Answer to Taxpayers About Biden’s Middle-Class Audits, Agency Political Leaks, and Historic Tax Refund Backlog

February 15, 2023 — Blog    — Oversight    — Press Releases    — Tax   

Washington, D.C. – Restoring public trust and accountability to the Internal Revenue Service (IRS) must be a top priority for its next commissioner, said House Ways and Means Committee Chairman Jason Smith (MO-08) ahead of today’s Senate confirmation hearing with Biden nominee Daniel Werfel.

“Recent leaks of taxpayer information have further eroded the American people’s faith in the IRS, and ought to make Mr. Werfel’s record as a former Acting Commissioner the centerpiece of today’s Senate confirmation hearing. After all, when the tax enforcement agency was found to target conservative non-profits and withheld key information from Congress, Mr. Werfel fell short of restoring trust in the IRS. Americans deserve to understand his plans to fix the broken agency this time and regain the public’s trust amidst the Biden Administration’s decree to step up enforcement against middle-class taxpayers and small businesses.

“Today’s Senate confirmation hearing is also a critical moment for Mr. Werfel to shed light on how the IRS will spend its massive infusion of $80 billion to audit the middle class, including whether the agency is still pursuing a plan to monitor Americans’ bank accounts, Venmo transactions, or even tips earned during hourly work. Americans are still in the dark on the size and scope of recent politically motivated leaks of taxpayer information from within the IRS. And finally, he owes taxpayers clarity about how the historic backlog of tax returns will bleed into this year, keeping American families and small business owners on hold with deplorable customer service wait times in order to access their own hard-earned tax refunds.

“One thing is absolutely clear: Once confirmed, Mr. Werfel should plan to spend a substantial amount of time before the House Committee on Ways and Means answering questions about the agency’s actions and activities.”

Chairman Smith called on Mr. Werfel to answer the following outstanding questions before the Senate moves on his nomination:

  • What is the IRS’s plan to spend the massive infusion of $80 billion it received from the Inflation Reduction Act (IRA)? The funding would allow the agency to hire 87,000 new agents that analysis shows would lead to increased audits and enforcement actions against those earning less than $400,000.
  • How will IRS implementation of Democrats’ tax plans impact American families and workers? Economists projected that the tax increases in President Biden’s first budget would cost 1 million jobs. Last year’s budget went even farther, with proposed tax hikes of $4 trillion, including an attack on family businesses with a supercharged second death tax and $46 billion in tax increases on American energy, raising utility bills and fuel costs for millions of families.
  • When will the American public get answers about the politically motivated leaks of taxpayer information? For months, the Biden Administration has kept the American people in the dark about the size and scope of various politically motivated leaks of taxpayer information from within the IRS.
  • How will the IRS address the tax backlog and improve customer service? Despite a clear need for greater taxpayer customer service amidst a historic tax return backlog, less than 4 percent of Democrats’ $80 billion is earmarked for that purpose. In the 2022 filing season, the IRS answered just 10 percent of phone calls, and is currently still sitting on millions of unprocessed tax returns.

READ: New Schumer-Manchin Bill Will Supercharge Long History of IRS Abuses