President Biden will replace Internal Revenue Service (IRS) Commissioner Charles Rettig when his term ends on November 12, Secretary of the Treasury Janet Yellen announced.
IRS Deputy Commissioner Douglas O’Donnell will step in as acting commissioner until a permanent chief is named.
“I want to thank Commissioner Rettig for his tireless service to the American people across two administrations, and his leadership of the IRS during the difficult and unique challenges posed by COVID-19,” said Secretary Yellen. “I am grateful to him for his partnership and efforts to ensure taxpayers had the resources they needed to make it through the pandemic.”
Rettig, an appointee of former President Trump, has faced scrutiny throughout his five-year term. His refusal to release President Trump’s tax returns, along with the IRS’s aging IT systems that have bogged down business processes at the agency, led to some members of Congress calling on President Biden to fire Rettig.
Rep. Bill Pascrell Jr., D-N.J., chairman of the Ways and Means Oversight Subcommittee, was the first member of Congress to call for Rettig’s firing, and applauded the decision to have fresh IRS leadership.
“The Biden administration is right to end the term of Donald Trump’s IRS commissioner. Under Mr. Rettig’s failed leadership the agency and its dedicated employees have suffered through scandal and incompetence,” Rep. Pascrell said. “Americans are fed up with late refunds, unanswered calls, and a two-tier tax system. I wish Mr. O’Donnell well as acting commissioner and look forward to working closely with him on implementation of the Inflation Reduction Act.”
O’Donnell – who has spent more than 36 years at the IRS – steps in as acting commissioner after the Inflation Reduction Act provided $80 billion of new funding over ten years for the IRS.
The new funding aims to help modernize the agency’s business systems, including nearly $5 billion to hasten work on the agency’s three-year-old IT modernization plan, which had already received $275 million from the fiscal year 2022 budget and a one-time shot of $1 billion under the American Rescue Plan Act in 2021.
Following the approval of the new funding, Yellen set a six-month deadline for Rettig to produce a plan for the tax agency to overhaul its technology and staffing capabilities. Yellen said the IRS must develop a plan to resolve its inventory backlog, overhaul its IT system, invest in training employees, and “replace the attrition that is on the horizon from the expected retirement of at least 50,000 IRS employees over the next five years.”
The IRS’s systems date as far back as the 1960s, which has drawn criticism from lawmakers concerned about the use of obsolete programming languages, along with the Government Accountability Office (GAO), which says taxpayers could be vulnerable to data breaches because of lax cybersecurity practices.
“With Democrats delivering fresh funding to revitalize the IRS, we expect strong leadership to steer the IRS ship into clearer waters,” Rep. Pascrell said. “This is a big moment for tax enforcement in America. I urge the President to expeditiously nominate a new commissioner and chief counsel who will be partners for the Biden administration in revitalizing our tax agency.”