Danny Werfel Named Acting Head of IRS in the Wake of Scandal

Michael Teague  |

By now, most people are familiar with the scandal that erupted on Tuesday as the Treasury Inspector General for Tax Administration released a report titled “Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review.”

The report is as matter of fact in its language and findings as its title suggests.  At the same time, given the political climate that currently prevails in the U.S., it was tailor-made for politicization, a fact that was underscored on Wednesday by the firing of IRS commissioner Steven Miller, a career IRS employee who was appointed as the acting head of the organization in November of last year.

Miller was not heading the organization during the period covered by the TIGTA report. The job during the 2010-2012 period in question actually belonged to Bush administration appointee Douglas Shulman, who himself had previously denied that conservative political groups were being targeted.

Newly appointed Treasury Secretary Jack Lew asked for and received Miller’s resignation on Wednesday.  He is sure to face some very difficult questions on Friday when he appears before the House Ways and Means committee.

On Thursday, the White House announced that Danny Werfel, 42 and also a former appointee of the Bush administration, will take the helm as acting head of the IRS until September of this year. Werfel has until now been the controller of the Office of Management and Budget, and his relationship to Jack Lew in particular goes back some 15 years.

According to the report, since early 2010, “The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.”

The bulk of the furor that has resulted from the TIGTA report has arisen from groups on the conservative end of the social and political spectrums, which are angry about what they see as persecution at the hands of an organization that many of them already intensely dislike.

Of the myriad civil society organizations applying for tax-exempt status each year, a good 70 percent are approved with little or no supplementary information required by the IRS, according to the report.  Tea Party groups, as well as other groups with words such as “Patriot” in their titles were singled out apparently based solely on their names which were taken as obvious indications of political activity that would disqualify them from tax-exemption.

Furthermore, the report indicated that conservative groups were profiled not only by their titles, but had to wait far longer than other groups for their applications to be processed, and were asked to supply onerous and often unnecessary amounts of extra information to the IRS.

In its own defense, the IRS has claimed that the profiling took place as a result of a training exercise gone wrong due to lack of funding and poor management.  Meanwhile, political organizations espousing Tea Party “ideology,” at least in the most extreme cases, already believe the IRS to be unconstitutional, or to have otherwise liberal-leaning conspiratorial motives, a fear that was seized upon instantly by Republican politicians to increase the pressure on the White House.

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