You may have heard that President Trump has nominated former Missouri Congressman Billy Long as IRS Commissioner. For many reasons, the move 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. (IRS Commissioner Danny Werfel, appointed by President Biden, term was set to run until 2027.)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, Werfel stepped down on January 20, Trump's inauguration day. In his resignation message to IRS staff, Danny Werfel explained that his decision to step down resulted from extensive reflection and discussions with others. He emphasized that his departure would help ensure a seamless transition and position the incoming commissioner for success.
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 has also been 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 control Congress and the White House, are preparing to reshape tax policy before key aspects of the Tax Cuts and Jobs Act (TCJA) expire. (More on that later.) And Trump has floated the idea of a new External Revenue Service (ERS) to handle tariffs.
So…how could this leadership shakeup at the IRS impact your taxes? Read on.
IRS Commissioner Werfel stepped down
In a move that breaks tradition, IRS Commissioner Danny Werfel stepped down on January 20, 2025 — the day Donald Trump returned to the White House for a second term as president.
As mentioned, IRS commissioners typically serve their terms regardless of administration changes, and Werfel’s term wasn't set to end until November 2027.
In a resignation message reportedly sent to IRS staff, Werfel explained his decision.
"While I had always intended to complete my full term as commissioner, the president-elect has announced his plan to nominate a new IRS commissioner. I have been touched by those who have reached out to me to share how they were hopeful that I could remain in seat and continue the important work underway. But as civil servants, we have a job to do, and that job is to now ensure a new commissioner is set up for success."
During his time as IRS Commissioner, Werfel focused on modernizing the agency and enhancing enforcement capabilities and customer service using resources provided by the Inflation Reduction Act. However, those efforts met opposition from some Republican members of Congress who were against additional IRS funding.
Following Werfel's departure, Douglas O'Donnell, the Deputy Commissioner, is acting as commissioner until the Senate confirms Billy Long's nomination.
Who is Billy Long? Trump's IRS pick
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 during the 2025 tax season.
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 controlling both chambers of Congress and the White House, 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.
- For more information, see Tax Traps to Avoid in Trump's Second Term as President.
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.
Related Content
- Tax Reform 2025: Will the SALT Deduction Cap Be Eliminated?
- IRS Loses Another $20 Billion in Funding: What to Know
- Is the EV Tax Credit Going Away
- The Fine Print: What Trump Isn't Telling You About His 2025 Tax Plan
-
Four Roth IRA Pitfalls Your Adviser May Not Tell You AboutYou may not be bound for Mordor, but Roth IRA pitfalls could upend your retirement if you're unaware of them.
-
Walmart+ vs. Amazon Prime: Which One Is the Better Deal?Walmart+ and Amazon Prime both promise free shipping, exclusive deals, and a suite of add-on services. But which one should you get, if any?
-
Five Scary Things the IRS Can Do If You Owe Back TaxesTax Law Traveling in 2025? The IRS can take your passport (and house) if you don’t pay your tax bill.
-
Early Tax Refund Options Could Trap Your CashTax Refunds Don’t be fooled into thinking you’re not getting a loan — because you really are.
-
First-Time Filing Taxes? Key Tax Tips to Know for 2025Tax Filing Preparing your IRS taxes for the first time may seem daunting, but here are some return preparation and filing tips to start.
-
Legislation Cracking Down on IRS Tax Refund Mail Theft AdvancesIRS A string of bipartisan measures targeting taxpayer refunds, rights, and protections move forward on Capitol Hill.
-
Ten IRS Audit Red Flags for Retirees in 2025Retirement Taxes Retirees who think they can escape the IRS audit machine should think again.
-
Could ERC Delays Get Worse if Trump Downsizes the IRS?IRS The Trump administration’s push to shave down the IRS can impact taxpayers like you.
-
IRS Income Tax Refund Schedule 2025: When Will Your Refund Arrive?Tax Refunds Your 2025 IRS tax refund may arrive sooner than you think. Here’s a schedule for when you can expect your check or direct deposit.
-
IRS Tax Refunds Are $1,000 Smaller This Year: Here's WhyTax Refunds Inflation-related changes to the tax code could result in a larger refund for some, but you’ll have to wait.
