Trump's pick for IRS chief would lead an agency he once wanted to scrap. Here's how he might run it.

MW Trump's pick for IRS chief would lead an agency he once wanted to scrap. Here's how he might run it.

Andrew Keshner

Former Rep. Billy Long has 'zero relevant experience,' critics say. Others praise him for being 'oversight-minded.'

President-elect Donald Trump wants the Internal Revenue Service under new management, and experts say change is coming. The question is how deep it will go.

After Trump's transition team said he would end "bureaucratic overstepping" at the IRS, the president-elect on Wednesday picked Billy Long for IRS commissioner, tapping a former Republican congressman from Missouri with a legislative record that suggests wariness of the taxman.

During more than a decade in Congress, from January 2011 to January 2023, Long co-sponsored bills that would have curbed financial reporting to the IRS, ended the estate tax and replaced income taxes with a national sales tax. The latter bill, the FairTax Act, would have ultimately ended funding of IRS operations.

Since leaving Congress, Long has worked as a tax adviser for small businesses, according to Trump's announcement.

"Taxpayers and the wonderful employees of the IRS will love having Billy at the helm. He is the consummate 'people person,' well respected on both sides of the aisle," Trump wrote in a post on Truth Social.

The pick comes at a time when some Republicans say customer service, rather than audits and enforcement, should be the tax collector's main focus. The incoming administration is also eyeing spending cuts, led by Elon Musk and Vivek Ramaswamy's so-called Department of Government Efficiency, a cost-cutting initiative.

"It is an encouraging sign that the administration thought of a nominee that is oversight-minded and not necessarily from the IRS bureaucracy," Pete Sepp, the president of the National Taxpayers Union, a right-leaning think tank, told MarketWatch.

It's tough to know how Long's legislative past, including his past support of the FairTax Act, informs his potential leadership of the agency, Sepp said. But, for example, if Long has been wary of the estate tax, Sepp noted, he may be wary of how the IRS scrutinizes estate-tax returns. Given his current focus on small businesses, Long may also take a hard look at the IRS's approach to auditing small-business owners, Sepp added.

In searching for areas to trim budgets at the tax collector, Long and Republicans shouldn't target IRS customer service, Sepp said. "It is in the political interest of every appointed and elected official to be sure we don't go back to any more filing seasons from hell," he said, nodding to pandemic-era tax-filing seasons during which some taxpayers spent hours trying to reach someone and paper tax returns languished within an overstretched IRS.

Long, if confirmed by the Senate, would replace Danny Werfel, a Biden administration appointee who still has three years left on his term. Prior to his 2023 confirmation, Werfel served seven months as acting IRS commissioner in 2013 during the Obama administration.

Werfel's job has been to manage an $80 billion funding infusion from Democrats' Inflation Reduction Act. Though the commissioner has touted improvements to customer service for people figuring out their taxes, he has also emphasized tougher compliance for high-income households.

The billions of dollars earmarked for enforcement have been a sore spot with Republicans, who have already clawed back $20 billion in IRS funding from the Inflation Reduction Act. Another $20 billion for IRS enforcement looks in jeopardy, due to legislative quirks and negotiations connected to bills aimed at avoiding a government shutdown.

The IRS did not respond to a request for comment on Long's selection. The Trump transition team also did not respond to a request for comment.

Long's pick has drawn scorn from the left, where some Democrats say it heralds hard times ahead for average taxpayers and easier times for rich households. The nomination "ought to set off alarm bells," said Sen. Ron Wyden, an Oregon Democrat.

If Long were to be confirmed, "taxpayers can expect longer wait times for customer service, a more complicated process to file taxes, and free rein for the rich and powerful to continue rigging the system at the expense of everyone else," Sen. Elizabeth Warren, the Massachusetts Democrat, said in a statement.

Long has "zero relevant experience," Warren added. Before his tenure on Capitol Hill, Long's professional background included working as an auctioneer. (He occasionally showed off his skills in Washington.)

Yet accounting experience isn't a job prerequisite, and a slew of IRS chiefs lacked a tax background, said David Kautter, a former acting IRS commissioner and Treasury official in the first Trump administration. "It's primarily a management job. You're running a large organization."

Charles Rettig, the former IRS commissioner who served in both the Trump and Biden administrations and preceded Werfel, noted that "the IRS interacts with more Americans than any other public- or private-sector organization" and pulls in around 95% of the federal government's revenue.

"The IRS, and the IRS employees, are important to the success of the United States," Rettig told MarketWatch. "If Commissioner Werfel leaves the IRS and Billy Long is confirmed to succeed Commissioner Werfel, I'm hopeful Billy Long will quickly grasp the importance of the IRS and the IRS employees to the overall success of our country."

-Andrew Keshner

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December 05, 2024 16:39 ET (21:39 GMT)

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