IRS leader's exit worries officials amid tax uncertainty

WASHINGTON Thu Aug 2, 2012 6:07pm EDT

WASHINGTON (Reuters) - The chief of the Internal Revenue Service is expected to step down soon and some former officials of the tax-collecting agency expressed concern on Thursday about what that means for major tax policy issues in the coming months.

Doug Shulman, who became IRS commissioner in 2008 under President George W. Bush, has said he is not interested in another five-year term. His term ends in November.

If he were to leave then, the IRS would likely have a temporary commissioner in charge just as Congress faces historic tax decisions following the November 6 general elections and as the agency readies for the upcoming 2013 tax filing season.

The IRS faces "its most difficult filing season in decades next year," said Mark Everson, a former IRS commissioner, at a U.S. House of Representatives hearing.

"The looming change in leadership at the agency does further compound the challenges," he told Reuters. Everson is vice chairman at alliantgroup LP, a small business consultancy.

Shulman, who testified after Everson at the House Committee on Oversight and Government Reform hearing, declined to comment on when he will step down.

In April, he said in response to a question that his "plan is to leave at the end of my term."

The IRS has two deputy commissioners. One of them typically serves as acting commissioner until the president picks a new head for the agency, subject to Senate confirmation.

The two deputies are Steven Miller, deputy commissioner for services and enforcement, and Beth Tucker, deputy for operations support.

Miller and Tucker will take steps to ensure that the next filing season is handled efficiently, said Linda Stiff, a managing director at Big Four accounting firm PricewaterhouseCoopers LLP. Stiff served as acting IRS commissioner and oversaw the 2008 tax filing season.

Still, the tax uncertainty that is coming later this year will make 2013 "exponentially more challenging, she said.

Expiring Bush-era tax rates, along with more than $100 billion in automatic federal spending cuts, are key components of what some call the "fiscal cliff" coming at the end of the year.

In another matter, Shulman defended the IRS' ability to keep taxpayers' information private after a Republican legislator asked him about a watchdog report released on Thursday that said identity theft problems are bigger than the IRS can currently prevent.

"There is no allegation in that report or any other place that information (is) being taken out of the IRS for identity theft purposes," Shulman said.

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Dan Grebler)

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