AND YET…: That doesn't mean there aren't questions about how smoothly O'Donnell's tenure will go — and for that matter, how long it will last. The next several months clearly will be a critical time for the IRS, as it begins to implement the $80 billion in new funding that Democrats gave to the agency in the Inflation Reduction Act. Treasury officials seem likely to have a fair amount of influence over that process, and several experts have said it will be difficult for an acting commissioner to hold the kind of sway in implementation that a confirmed chief would. (Yellen has asked the IRS to produce an implementation plan by February.) That's no small part of the reason that several former IRS commissioners, among others, have been urging the White House to speed it up when it comes to finding a nominee for commissioner. But what's less clear is how much a new commissioner might see his or her authority over implementation reduced by not being onboard during this critical period. "It is never optimal to not have a Senate-confirmed commissioner during politically sensitive discussions," said Jorge Castro of Miller & Chevalier, a former counselor to the IRS commissioner. But any new commissioner, Castro added, "is going to want to put their stamp on this, and they're going to be afforded the opportunity to think about the priorities and whether they need to be rearranged." NOT FOR NOTHING: The Biden administration's search for a new commissioner comes as Republicans continue to make political hay out of the $80 billion, charging that it will create an increasingly intrusive tax collector that will target the average taxpayer (and voter). So it should come as no surprise that Democrats latched on Friday to the latest estimate of the tax gap, which found that the IRS collected about a half-trillion dollars a year less than what it was owed between 2014 and 2016. Democrats said the increase in the tax gap — about $58 billion more per year than the previous estimate — essentially illustrated why they sought to beef up the agency to go after wealthy tax dodgers, as Ben also noted. And it's worth noting — there are a lot of complicated topics when it comes to tax administration, and estimating the tax gap is surely one of them. For starters, tax compliance actually increased during the most recent period examined by the IRS, as The Wall Street Journal's Richard Rubin noted. But there are also reasons to think that the tax gap projection might be overstated, like the fact that it doesn't account for court rulings after the fact that force taxpayers to pay the IRS. Conversely, the IRS doesn't fully account for some potential levels of noncompliance, like with cryptocurrency. ELECTORAL SEASON: The IRS has definitely become a favorite GOP talking point ahead of the Nov. 8 midterms — but Republican attacks against Democratic tax increases have been more muted. That might be because Democrats didn't pass nearly as many tax hikes in the IRA as originally envisioned — or that tax increases, particularly those focused on the rich or corporations, might not offer as much political upside to Republicans as they did in decades past. But it's worth noting that the Center for a Free Economy, a conservative non-profit focused on limited government, is running an ad in Pennsylvania's Senate race focused on the wealth tax, which is supported by the Democratic nominee, John Fetterman. Ryan Ellis of the Center for a Free Economy acknowledges it's a modest ad buy, in the low six figures, and that the group is essentially just dipping its toe in the waters — this is the only race that the organization is running spots in this year. But Ellis said he thinks Pennsylvania was a no-brainer for this kind of spot, given Fetterman's strong support for the wealth tax and the wealthy suburbs outside Philadelphia — where property taxes are high and more and more voters are leaning Democratic.
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