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IRS Gets a New Commissioner, But Other Nominations Remain Stalled [UPDATED]

UPDATED SEPT. 21 AT 1:00 ET: Shortly after this post was published, the Senate Finance Committee scheduled a Sept. 27 hearing to consider the nomination of Gordon Hartogensis to be director of the Pension Benefit Guaranty Corporation.

The Senate recently confirmed a new IRS Commissioner, but there’s no sign it plans to act on the nomination for a new PBGC Director and the chamber is still waiting for a nominee to replace a Democratic SEC Commissioner.

Full Plate Awaits Newly Confirmed IRS Commissioner

An extensive to-do list awaits newly confirmed IRS Commissioner Chuck Rettig, as he takes over an agency that has suffered from bruising political battles over the last several years.

Rettig, who was nominated in February and confirmed Sept. 12, replaces Treasury Assistant Secretary for Tax Policy David Kautter, who concurrently served as Acting Commissioner of the IRS following the departure of John Koskinen in November 2017.

A tax attorney who hails from Beverly Hills, CA, Rettig is now charged with overseeing the IRS’s more than 70,000 employees and implementing the largest tax overhaul since the Tax Reform Act of 1986.

Rettig had been with the firm of Hochman, Salkin, Rettig, Toscher & Perez for 35 years. During his confirmation hearing, Rettig was questioned about his apparent lack of management experience overseeing a large bureaucratic organization, but he brings an extensive list of accomplishments in the tax advisory world, including serving as Chair of the IRS Advisory Council, as Vice-Chair, Administration, for the Section of Taxation of the American Bar Association, and as head of the tax section of the California bar.

One of the first items on his plate will be preparing for the upcoming tax filing season following enactment of the Tax Cuts and Jobs Act (TCJA), which will not be an easy task given the amount of changes and funding cuts the agency has undergone in recent years.

Under Koskinen, the agency faced blistering criticism from Congress (including a failed impeachment effort in 2016) over allegations that Koskinen had misled Congress about what was suspected to be politically motivated adverse treatment by the IRS of churches and conservative tax-exempt organizations.

Congress was poised to enact legislation to reform and modernize the operations of the IRS, but that effort seems to have stalled. Earlier this year, lawmakers were signaling that IRS reform would become a priority following enactment of the TCJA, but there has been no action since the House approved an IRS reform bill in April.

PBGC Nominee Still Waiting

In a step that took many by surprise, President Trump last May announced his intent to nominate Gordon Hartogensis to become director of the Pension Benefit Guaranty Corporation.

The Senate in October 2015 confirmed current PBGC Director Tom Reeder to serve for a five-year term. At the time of his nomination, Reeder received broad bipartisan support from the Senate, as well as from the retirement plan industry, and had served at the Treasury department under both Democratic and Republican administrations. Hartogensis, on the other hand, does not appear to have any experience with pension issues. He is also the brother-in-law of Senate Majority Leader Mitch McConnell (R-KY).

Hartogensis' nomination is currently pending before both the Senate Finance Committee and the Senate Health, Education, Labor and Pension Committee. The Senate Finance Committee has scheduled a Sept. 27 hearing to consider his nomination. Even if the nomination moves forward, there is still a narrow window of time for the full Senate to act in the remaining days of this Congress.

On the SEC Front

Elad Roisman, who was recently confirmed by the Senate to serve a five-year term as a Republican member of the Securities and Exchange Commission, has now been sworn in, bringing the SEC back to full capacity for now, with three Republicans and two Democrats. Roisman replaces former Commissioner Michael Piwowar, who departed the agency in July.

However, the SEC will be losing Democratic Commissioner Kara Stein by the end of the year. Stein’s five-year term expired in 2017, but SEC Commissioners may serve up to 18 months beyond the expiration of their terms. A nominee has not yet been named for Stein.

Earlier reports suggested that Trump administration officials were focusing on former SEC enforcement attorney Allison H. Lee to replace Stein, based on recommendations by Senate Democratic Leader Charles Schumer (NY), but those reports have not yet panned out.

Any delays in nominating and confirming Stein’s successor would take the agency back down to four Commissioners following her departure, with three Republicans and one Democrat.

As for the Senate, it is tentatively scheduled to adjourn in early October to campaign for the mid-term elections, and then return in mid-November for a brief lame-duck session.

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