February 15,2023

Crapo Pushes for Transparency, Accountability at IRS Commissioner Nomination Hearing

“I don’t expect to see ‘wiggle room’ in these commitments.”

Washington, D.C.--At a U.S. Senate Finance Committee hearing on the nomination of Danny Werfel to be the Commissioner of the Internal Revenue Service (IRS), Ranking Member Mike Crapo (R-Idaho) secured commitments from Mr. Werfel to be transparent and accountable to hardworking American taxpayers, if confirmed.  Senator Crapo pushed Mr. Werfel for commitments to make funding plans for the IRS’s $80 billion budget infusion immediately available to the public for comment; to not use supersized enforcement money against people who make less than $400,000 per year; and to reject proposals to collect sensitive, private data on Americans’ financial accounts.   

To view these remarks, click HERE

On making spending plans for the IRS’s supersized $80 billion budget public:  

Senator Crapo: There is growing uncertainty about when, or even if, the IRS plan for spending the $80 billion will be publicly released. . . . It’s a widely shared view that the IRS must release this plan in real time and allow stakeholders to provide feedback. If you are confirmed as the IRS Commissioner, would you agree that the plan to spend the $80 billion will be publicly released and that you will allow public feedback from stakeholders and others? 

Mr. Werfel: I agree that the plan that is put together should allow both this committee and the public to connect the dollars from the inflation reduction act to the various activities and investments.  

Senator Crapo: I’ll take that as a commitment that you will publicly release the plan.  

On pledges to not increase audits on taxpayers earning less than $400,000 per year:  

Senator Crapo: I’m very concerned about the use of the funds for the enforcement part of the plan. . . . From the IRS’s own data, the two largest single components of the tax gap--the difference between taxes owed and paid--are small business income and individual non-business income.  The nonpartisan Joint Committee on Taxation told us that upwards of 90 percent of these shortfalls fall on hardworking Americans with modest incomes, far under $400,000 per year. . . . I want to know whether you are going to commit today that the plan will not allow this supersized enforcement money to be utilized against people who make less than $400,000 per year.  

Mr. Werfel: Senator yes, and I make that commitment in my official statement for the record.  I am committed to Secretary Yellen’s directive on how the audits should move forward under the IRA, and look forward to working with you and you holding me accountable for that.  

Senator Crapo: Secretary Yellen’s statement leaves a lot of wiggle room.  I want to be sure you know that I don’t expect to see “wiggle room” in this commitment.  

  • Senator Crapo recently led all Finance Committee Republicans in introducing legislation to make this commitment law, rather than an unenforceable edict.  

On proposals to force financial institutions to report private customer data to the IRS:  

Senator Crapo: I want to know whether there are any intentions at the IRS, or any intention on your part, to regulatorily seek to expand the ability of the IRS to literally invade and look into the bank accounts of Americans simply because they have deposited $600, or $10,000, etc. in their account.   

Mr. Werfel: If we’re going to take a step, I’m going to want to make sure this committee is comfortable that a) we’ve taken that step consistent with what our parameters are in the law, and b) that we’ve made the right balancing decision that this is the right step to do in the interest of the taxpayer, and balances the importance of not invoking unnecessary intrusion.  My commitment is to hold to these factors and work with you collaboratively to make sure we balance them effectively.  

Senator Crapo: I hope you wouldn’t seek any plan like the one I just described, which I think is a violation of the privacy of our American citizens.  

  • Senator Crapo recently joined Senate Banking Committee Ranking Member Tim Scott (R-South Carolina) in reintroducing legislation to prevent this proposal from becoming law.  

Watch Senator Crapo’s full opening statement HERE, or read it HERE