By Richard Rubin
WASHINGTON -- The Senate confirmed Charles Rettig to run the Internal Revenue Service, giving the veteran California tax lawyer one of the toughest, most thankless jobs in the federal government.
Mr. Rettig, who spent his career representing wealthy taxpayers and businesses in complex disputes with the government, gets a term that runs until November 2022. He will replace David Kautter, the Treasury Department's top tax policy official, who has been acting as IRS commissioner.
The Senate voted 64-33 in favor of Mr. Rettig's confirmation. All Republicans who were present joined with 15 Democrats to back the nomination.
Mr. Rettig will run an agency struggling with flat or shrinking budgets, aging computer systems and increased demands from Congress. Last year, the IRS audited 0.62% of individual tax returns, the lowest rate since 2002. In 2017, the agency had 19% fewer employees than in 2010.
"It's a problem solver's dream job because the problems just roll in all day long," said Mark Matthews, a former IRS deputy commissioner. "You don't get that much credit for the good things that happen but you sure get pilloried when something goes wrong."
The agency is implementing the 2017 tax law and preparing for early 2019, the first tax-filing season under the new law. That is likely to generate confusion and phone calls from taxpayers adjusting to new forms, rules and changes to paycheck withholding.
Mr. Rettig faces potential conflicts with the president who nominated him. President Trump, who has refused to release his tax returns, has complained that the IRS unfairly audited him for years.
During Mr. Rettig's confirmation hearing, he pledged that he would be independent. IRS commissioners typically don't get involved in individual taxpayers' situations, but they do set broader policies.
Republicans pointed to Mr. Rettig's confirmation as a chance to reset the agency's relationship with Congress and the public.
"Recent memory reminds us just how important it is that all Americans get a fair shake from the agency that oversees the tax code," said Senate Majority Leader Mitch McConnell (R., Ky.)
Republicans led the drive to punish the agency after 2013, when the IRS said it gave extra scrutiny to some conservative groups applying for tax-exempt status. Republicans claimed partisan motivations; independent and bipartisan analyses focused on mismanagement.
The agency's senior leaders resigned, and the IRS revamped some of its policies for handling nonprofits. However, bitterness and congressional investigations lingered through the term of John Koskinen, President Obama's choice to rebuild the IRS.
"Hopefully, Congress will not have some of the negative feelings that they might have had with the prior commissioner," said Tony Reardon, president of the National Treasury Employees Union, which represents IRS employees. "The number-one problem at the IRS is funding."
Unlike other recent commissioners, Mr. Rettig lacks experience managing large, complex organizations. But he has deep experience in the tax code, long service in professional groups and the respect of tax professionals.
Mr. Rettig's gregariousness and experience on the other side of the tax code should help him quickly build credibility with the IRS workforce, tax practitioners and Congress, said Mr. Matthews, a tax lawyer at Caplin & Drysdale.
"It's nice to think about having a commissioner who's walked a mile in our shoes and who has experienced the IRS personally, for good and for bad," he said.
Democrats had few objections to Mr. Rettig himself. They used the debate over his nomination to highlight concerns with the 2017 tax law and with an IRS decision to let some nonprofit groups involved in politics submit less information about their donors.
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(END) Dow Jones Newswires
September 12, 2018 20:13 ET (00:13 GMT)
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