July 26,2018

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Hatch Opening Statement at Treasury Nomination Hearing

WASHINGTON – Senate Finance Committee Chairman Orrin Hatch (R-Utah) today offered the following opening statement at a Treasury nominations hearing:

Today we will consider the nominations of Justin Muzinich, to be deputy secretary of the Treasury and Michael Desmond, to be chief counsel for the IRS and an assistant general counsel in the Department of the Treasury. I would like to extend a warm welcome to both of our nominees here today and thank you both for your willingness to serve in these important positions.

Mr. Muzinich, should you be confirmed, the Treasury Department will not be an entirely new workplace for you. You have been serving at the Treasury Department as a counselor to the secretary, advising the secretary on several domestic and international policy initiatives, including tax reform. As I know you are aware, this committee has a special interest in the new tax reform policies that have already started to improve the lives of many Americans through higher wages, bonuses and increased business optimism.

If confirmed, as deputy secretary, you will be responsible for assisting Secretary Mnuchin with the administration of the Treasury Department, including implementing the recently passed tax reform law.

Mr. Desmond, if confirmed, will serve as chief counsel for the IRS and an Assistant General Counsel in the Department of the Treasury.  In similarity to Mr. Muzinich, government service is not unfamiliar to you, Mr. Desmond. From 2005 to 2008, you worked at Treasury as a tax legislative counsel and, before that, you had worked in the Justice Department as a trial attorney.

If confirmed, Mr. Desmond will be the chief legal advisor to the IRS Commissioner on all matters relating to interpretation, administration, and enforcement of the tax code.   The chief counsel oversees an office responsible for providing IRS agents, and taxpayers, with guidance on how to comply with our tax laws. This is no easy task, but especially given Mr. Desmond’s work in the Treasury Department, I believe he is a good candidate for the job. We thank you and look forward to having you back in government service again.

Before we begin, I want to address something that I suspect my colleagues from across the aisle will bring up during today’s hearing. Just a few weeks ago, the Treasury Department released new regulations which caused some dramatic responses from the Democratic members of this committee.

Today, our Democratic colleagues may argue against these nominees on the basis of these recent policy changes, which were made to streamline information returns by certain tax-exempt organizations. As I explained on the Senate floor yesterday, what this regulatory change actually does is far different than the characterization coming from my colleagues. 

So, let me repeat myself and re-explain the facts behind this change. Earlier this month, the Treasury Department changed a Nixon administration regulation that required social welfare organizations, labor organizations and Chambers of Commerce to report the names and addresses of their donors.

This rule was a problem for several reasons. The IRS doesn’t need this information for tax administration, since these donations aren’t tax deductible.  If the IRS decides it does need the information, it is still available to them upon request.

The Nixon-era rules required a lot of time and resources both at the IRS, which had to redact the information to protect it against improper disclosure, and at the tax-exempt organizations. The rules put taxpayer information at risk. Indeed, the IRS knows of at least 14 instances where this information was improperly released since 2010.

So while our Democratic friends will pretend this is some conspiracy theory to overthrow Democracy, or cloak the political world in so-called dark money, in reality this was a simple change to improve IRS efficiencies and protect taxpayer data.  And, on the heels of IRS taxpayer-information abuses during the Obama administration, attention to taxpayer protection is a must.

On top of that, the recent change in regulations isn’t even really a newfound Republican idea. Under the Obama administration, the IRS sought to make an even more extensive change on Schedule B reporting.

So let’s keep that in mind when our Democratic colleagues inject politics into our nomination proceedings and into what is in reality a common sense regulatory change.