Rettig won’t hold the wealthy accountable — the IRS needs new leadership

The IRS is back.

Over a decade of painful budget cuts and expanded responsibilities has left the tax-collecting agency barely able to perform its most basic duties, but help is on the way. President Biden recently signed into law the Inflation Reduction Act of 2022 (IRA), which allocates $80 billion in additional funding to the IRS, with over half designated explicitly for tax compliance enforcement.

The bill’s $45 billion for enforcement is desperately needed. For years, America’s most affluent have used intentionally complex practices to shield their wealth, under the (correct) assumption that the IRS didn’t have the resources to follow their elusive money trails. 

With the passage of the IRA, the IRS will finally have the funding to go after these wealthy tax cheats. But even with this new funding, the IRS may not have the leadership it needs to accomplish Biden’s goals. 

If President Biden wants the IRA to be a success, he needs to replace the current commissioner of the IRS, Chuck Rettig.

Rettig, appointed by President Trump in 2018, has since proven himself unwilling to identify and punish wealthy tax evaders. Under his leadership, rather than completing audits on the rich, the IRS audited workers making less than $25,000 five times more often than all other filers. Rettig’s IRS audited the poorest Americans who used the Earned Income Tax Credit (EITC) at a higher rate than every other tax bracket, save for the absolute wealthiest Americans. They even reduced the number of millionaires audited to 13,725 in 2021, just a third of the amount 10 years ago. 

The decline of audits on the rich isn’t entirely Rettig’s fault. Over the last 10 years, a 20 percent funding cut left the IRS lacking investigators with the expertise required to go after rich people and their complicated finances, making audits of the richest of the rich more difficult to pursue widely. But the choice to audit working people at a considerably higher rate instead of going after the worst and the wealthiest tax cheats was just that, a choice. 

Treasury Secretary Janet Yellen has already directed the IRS to use this increased funding exclusively on taxing rich Americans. Still, even with such a directive, the day-to-day administration of $45 billion is incredibly significant. Since the head of the IRS can assign large amounts of funds at their discretion, only a commissioner committed to taxing the rich can utilize this new funding effectively. Rettig has proven himself untrustworthy of that role. 

Rettig has a history of shady dealings since before he even began his job under Donald Trump. He spent 40 years of his career working for a law firm specializing in helping rich clients avoid paying taxes. He omitted information about his ownership of Trump-branded real estate during his appointment. He publicly defended the former president’s withholding of his tax returns, going as far as obstructing the congressional subpoena asking for the tax return’s release. Under Rettig, Trump-opposed former FBI director and deputy director, James Comey and Andrew McCabe, were both selected for a rare type of tax audit. The likelihood of both these men, known to dislike Rettig’s appointment, being audited coincidentally is virtually impossible. Rettig’s career reeks of corruption at every turn.

Rettig, as commissioner, is a banner advertising that the department is not on the side of ordinary Americans. He must be removed from his position if we want to progress towards adequately funding tax enforcement on the Americans who need it the most — the ultra-wealthy. 

Since Republicans are already jumping to attack this new funding as an additional tax burden on ordinary Americans, it’s especially crucial for Democrats that the IRS uses this money to go after only tax evasion by the wealthiest offenders. It is critical, both politically and economically, that this extra enforcement money is used effectively and specifically to tax the rich and not to maintain the status quo by increasing the audits of poor people further than it already has.

Chuck Rettig has overseen an environment of devaluing and discouraging tax enforcement on the wealthy by the IRS and cannot be the man to oversee a complete overhaul of the agency. If Biden and Democrats want to tackle wealthy people evading taxes like they say they do, they need an IRS commissioner that is on their side, not a Trump appointee who’s shown he has no interest in holding the richest accountable for paying their fair share.

Drew Pomerance is a co-founding partner of the law firm Roxborough, Pomerance, Nye & Adreani and a member of the Patriotic Millionaires.