You may have heard President-elect Donald Trump nominated former Missouri Congressman Billy Long as IRS Commissioner. For many reasons, the move has sparked debate about the future of tax policy and IRS operations.
First, Long’s background as a certified auctioneer with limited tax experience and no college degree distinguishes him from typical IRS commissioner nominees.
The nomination is also notable because IRS commissioners have traditionally been allowed to complete five-year terms, regardless of White House administration changes. (Current IRS Commissioner Danny Werfel, appointed by President Biden, has a term ending in 2027.)
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In a statement, Sen. Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, said, "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."
Meanwhile, Trump praised Long, writing on his social media platform, Truth Social: "Taxpayers and the exceptional staff at the IRS will appreciate having Billy in charge.”
If confirmed, Long would oversee an agency with approximately 85,000 employees and an annual budget of over $12 billion. As Kiplinger has reported, the IRS is grappling with a $20 billion reduction in special funding and a proposed $2.2 billion cut to its annual budget.
The agency is also undergoing major modernization and tax compliance efforts targeting wealthy non-filers and complex corporations. Those initiatives come alongside a new IRS free tax filing program, Direct File.
Meanwhile, Republicans, who will lead Congress and the White House in the coming year, are preparing to reshape tax policy before key aspects of the Tax Cuts and Jobs Act (TCJA) expire. (More on that later.)
So…how could a leadership shakeup at the IRS impact your taxes? Read on.
Trump IRS pick: Who is Billy Long?
Billy Long, a former Republican congressman from Missouri, has been tapped by President-elect Donald Trump to lead the IRS.
- Long served six terms in the U.S. House of Representatives from 2011 to 2023
- He occasionally used auctioneer bid calling during congressional hearings and, during his tenure, co-sponsored tax-related legislation.
- The former Congressman has also espoused the controversial Employee Retention Tax Credit (ERTC or ERC).
For example, since leaving Congress, Long has promoted ERTC claims, working with firms that processed these applications for a fee. Critics argue that Long's participation in an industry fraught with scams creates a significant conflict of interest, especially considering the IRS' role in rooting out improper ERC claims.
As Kiplinger has reported, the pandemic-era tax credit has become notorious for widespread fraud, prompting the IRS to temporarily halt ERC claim processing.
- An IRS review of one million employee retention credit claims found that between 70% and 90% of filed claims show signs of fraud or error
- That represents over $86 billion in potentially improper claims
- Ongoing criminal investigations have uncovered 323 cases involving more than $2.8 billion of suspected fraudulent ERC claims from 2020 to 2023
The ERC controversy adds another layer of scrutiny to Long's nomination, which has already spurred mixed reactions. Some praise the former auctioneer’s potential outsider perspective, while others question his qualifications for managing a complex federal agency like the IRS.
Long’s nomination also comes at a critical juncture for the tax agency and amid broader Republican efforts to reshape tax policy for years to come.
IRS tax overhaul?
Under current Commissioner Werfel, the IRS has undergone a substantial multi-billion-dollar overhaul, primarily due to about $60 billion in Inflation Reduction Act (IRA) funding. As mentioned, these changes have included improvements to customer service, an increased focus on wealthy “tax cheats,” and a new IRS free filing program, to name a few initiatives.
New leadership at the IRS's helm could impact these ongoing efforts and steer the agency in a new direction.
Republicans in Congress have signaled an intention to reduce IRS funding. One proposal is to cut the agency's budget for FY25 by $2.2 billion from fiscal 2024 levels. This aligns with a broader conservative desire to curtail the agency's resources and scope.
One target is the IRS's Direct File program. Some Republican lawmakers are pushing to prohibit funding for this government-run tax preparation system, which could effectively end the initiative.
IRS Direct File is a free online service that allows eligible taxpayers to submit their federal tax returns directly to the IRS. The system, criticized by some lawmakers and industry tax prep giants like Intuit Turbo Tax and H&R Block, eliminates the need for third-party tax software or professional assistance for some filers.
- Following a successful pilot program, the IRS recently made Direct File permanent and expanded to 25 states in anticipation of the upcoming tax filing season.
- The IRS expects over 30 million taxpayers to use the program in the coming year.
It’s also worth noting that Project 2025, a conservative blueprint for U.S. governance, calls for a two-rate individual tax system and the elimination of most deductions and credits. Long's past co-sponsorship of tax-related legislation suggests alignment with those goals.
For example, while in Congress, Long supported the Tax Code Termination Act, which sought to abolish much of the existing tax code and replace it with a more straightforward system. Long also backed measures to move to a national sales tax and abolish the IRS.
Billy Long's potential appointment as IRS Commissioner could shift the agency's focus away from aggressively enforcing tax compliance among high-income individuals and corporations, potentially undermining efforts to combat tax evasion.
Additionally, his leadership could influence issues involving clean energy tax breaks under the IRA, like the federal EV tax credit, how U.S. taxpayers file, and what deductions they can claim.
Tax Cuts and Jobs Act expiration
Meanwhile, in terms of tax policy, with Republicans set to control both chambers of Congress and the White House in 2025, an extension of the TCJA is highly likely.
Lawmakers are expected to use the budget reconciliation process, which requires only a simple majority in the U.S. Senate, to pass tax legislation early in President-elect Trump's term.
- Key priorities could include making individual tax cuts permanent, maintaining the lower corporate tax rate, and expanding certain business deductions.
- However, narrow Republican majorities in both houses and deficit concerns may require compromising on key provisions or considering temporary extensions.
Trump IRS commissioner: Bottom line
As the nomination process unfolds, monitoring any changes to IRS operations and public response or perceptions will be interesting.
Would a simplified tax code result in fewer deductions and lower tax refunds for some taxpayers? Could a lack of funding or loss of other resources derail IRS customer service and modernization improvements and slow tax refund processing? Would millions of taxpayers be concerned if a free, government-provided tax filing option, Direct File, were eliminated?
A confirmation process can take months, but in the meantime, the debate over Trump’s IRS pick will likely intensify.
Some will see IRS reform as necessary for government efficiency and an unconventional nominee as a means to that end. On the other hand, some believe gutting the agency or taking it in a wholly different direction will primarily benefit wealthy tax evaders at the expense of “average Americans.”
Stay tuned.
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