Lawmakers Question President Biden's IRS Commissioner Nominee

Republican U.S. Senators, including Oklahoma’s James Lankford, grilled President Biden’s nominee to head up the IRS Wednesday, with particular focus on how the agency plans to use the $80 billion it’s getting through the Inflation Reduction Act.

Republicans have voiced significant concern with the administration's plan to use almost 60 percent of the funding for hires and actions related to tax code enforcement. The president and others claims that this will help close the tax gap — what people owe versus what they actually pay — and will only target the very wealthy and tax cheats.

The ranking member of the Senate Finance Committee, Sen. Mike Crapo (R-ID) pressed Daniel Werfel on the issue.

"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 -- will you make that commitment?" Crapo asked.

"Senator, yes," Werfel began.

Werfel assured Crapo and others on the committee that the new funding would not be used to increase audits of working class Americans but would be used to improve customer service.

"The bottom line is, as always," Werfel stated, "we want to build trust with the taxpayers."

Lankford brought up an issue of concern unrelated to the funding in the Inflation Reduction Act.

"I find this interesting: part of the American Rescue Plan -- and part of rescuing America, apparently, by my Democratic colleagues," Lankford stated, "was getting information about my Venmo transactions with my daughter to the IRS."

Lankford is referring to a change in the tax code, mandated in the 2021 ARPA legislation, requiring that third-party settlement organizations (TPSO) such as eBay, PayPal and Venmo report annual transactions totaling more than $600 dollars to the IRS. Lankford says he routinely reimburses his daughter for things she buys at the store for him with Venmo.

"I am quite confident that will exceed $600 over the course of a year," Lankford added. "Those records are now going to go to the IRS because of the American Rescue Plan -- part of rescuing America is getting that [information]."

Werfel said he's aware of the concerns that are being raised with the provision, which goes into effect this year and will be watching for problems.

"And if it comes to be that we see that there are opportunities for certain personal transactions to not be included," Werfel answered, "let’s talk about doing that."

Published documents on the IRS website made clear the law is intended to track business transactions and not the sort of personal transactions described by Lankford, but it’s not clear how a TPSO, like Venmo, will accurately distinguish between the two.