06/12/24

US: Trump Pick to Lead IRS Signals 'Open Season for Tax Cheats'

As published on: commondreams.org, Friday 6 December, 2024.

U.S. President-elect Donald Trump's nominee to run the Internal Revenue Service, former Rep. Billy Long, didn't serve on the House committee tasked with writing tax policy during his six terms in office, and his lack of relevant experience is likely "exactly what Trump was looking for," according to one economic justice advocate.

Progressive lawmakers joined advocates on Wednesday in denouncing Trump's selection of Long, who since leaving office in 2023 has promoted a tax credit that's been riddled with fraud and who spent his time in the House pushing to abolish the very agency he's been chosen to run.

As a Republican congressman from Missouri, Long repeatedly sponsored legislation to dismantle the IRS, which under President Joe Biden has recovered at least $1 billion from wealthy people who previously evaded taxes.

He also co-sponsored legislation to repeal all estate taxes, which are overwhelmingly paid by the wealthiest households, but "said almost nothing on the floor regarding taxes, the IRS, and taxation during his 12 years in Congress," said John Bresnahan of Punchbowl News.

Long's limited experience with tax policy "ought to set off alarm bells," said Sen. Ron Wyden (D-Ore.), who pointed to "vastly improved taxpayer service" under the leadership of IRS Commissioner Danny Werfel, who Biden chose to replace Trump's nominee from his first term, Charles Rettig, after Rettig served his full term.

Werfel has "set up a tremendous direct-file system, and begun badly needed crackdowns on ultra-wealthy tax cheats who rip off law-abiding Americans," said Wyden. "If Trump fires Mr. Werfel, it won't be to improve on his work; it'll be to install somebody Trump can control as he meddles with the IRS."

The appointment is likely to commence an "open season for tax cheats," said Lindsay Owens, executive director of Groundwork Collaborative.

"If he's 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."

Since leaving office, Long has promoted the Employee Retention Tax Credit (ERTC), a pandemic-era credit that was intended to incentivize employers to continue paying workers during the economic shutdown when the coronavirus pandemic hit the United States.

He has worked to help businesses claim the credit from the IRS, but fraudulent and improper claims have so permeated the program that the IRS stopped processing new claims temporarily. The U.S. House passed a bill to entirely halt ERTC claims, but it has been stalled in the Senate.

"These ERTC mills that have popped up over the last few years are essentially fraud on an industrial scale, conning small businesses and ripping off American taxpayers to the tune of billions of dollars," said Wyden. "I'm going to have a lot of questions about Mr. Long's role in this business, first and foremost why the American people ought to trust somebody involved with a fraud-ridden industry to run an agency that's tasked with rooting out fraud."

Wyden also pointed out that Long has not been named in a "typical nomination like you'd see after every presidential election." Werfel's term was set to go until November 2027, and the IRS typically operates as a nonpartisan agency.

"Replacing Commissioner Werfel with over three years remaining in his term is a terrible mistake," said Rep. Don Beyer (D-Va.). "He has done an excellent job rebuilding the IRS, boosting customer service, and enhancing enforcement aimed at wealthy tax evaders. Removing him will clearly signal Trump's intention to make the agency less responsive to the American people, while giving a green light to wealthy tax cheats to evade their fair share of the tax burden."

"Trump's nominee has clearly stated that he wants to abolish the IRS," added Beyer. "The change Trump proposes in IRS leadership would be a gift to tax cheats and a blow to anyone who believes it is important to rein in deficits."

Sen. Elizabeth Warren (D-Mass.) added that Trump's nomination of Long signals "the weaponization of the tax agency."

"If he's confirmed," she said, "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."

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