The Commissioner of the Internal Revenue Service (IRS), Danny Werfel, recently announced a significant reshuffling of the agency’s leadership structure. The planned changes, which are set to be implemented in early 2024, aim to streamline operations and support the IRS’s ongoing transformation efforts.
Under the new structure, the IRS will operate with a single deputy commissioner instead of two. Additionally, four new chief positions will be introduced to oversee taxpayer service, tax compliance, information technology, and operations. These adjustments are part of the agency’s broader transformation work, funded by the Inflation Reduction Act.
Werfel stated that the timing of this restructuring aligns with the accelerated transformation work at the IRS. He expressed confidence that these changes would enhance efficiency, expand collaboration across the agency, and support improvements for taxpayers.
“Many foundational changes in tax administration have occurred since the last major IRS organizational change,” Werfel said. “This new alignment will help us in our ongoing transformation work to modernize the nation’s tax system. This will improve our leadership model and streamline our internal processes for the benefit of taxpayers, the tax community, our employees and ultimately the nation.”
Werfel emphasized that the leadership changes would not immediately impact the majority of IRS employees or their daily work, but rather the reporting structure for top positions. The IRS plans to engage with Congress, the National Treasury Employees Union (NTEU), and other stakeholders as it progresses with these changes.
The current IRS leadership structure, dating back to 2000, was established following the enactment of the IRS Restructuring and Reform Act of 1998. Minor organizational changes followed, including the addition of a second IRS deputy commissioner in 2003.
This restructuring represents years of effort at the IRS, tracing back to the Taxpayer First Act Report to Congress in January 2021 and the new IRS Strategic Operating Plan released in April 2023.
Werfel concluded, “The new structure will help the top leadership to work together to drive faster and more effective progress. It’s critical we deliver for taxpayers and the nation as we work to make important improvements at the IRS.”
Doug O’Donnell Appointed as Single Deputy Commissioner
The Internal Revenue Service (IRS) has announced a move to a single deputy commissioner model, departing from its current two-deputy structure. The change is part of a broader organizational reshuffle aimed at streamlining operations and responding more effectively to emerging priorities.
IRS Commissioner Danny Werfel explained that the new structure, which mirrors the model used at the U.S. Treasury, has proven successful both inside and outside government. It provides greater specialization at the top of the IRS organization chart, reflecting the significance of transformation work currently underway.
Under the previous model, the deputy commissioner for Services and Enforcement oversaw both the nation’s tax season and all IRS tax compliance work. In contrast, the deputy commissioner for Operations Support managed the information technology (IT) functions and other critical mission support areas.
The transition to a single deputy commissioner will be accompanied by the introduction of four chief positions. These chiefs will oversee key areas of taxpayer service, tax compliance, IT, and operations, reporting directly to the agency’s top leadership.
Werfel stressed that this new governance model would strengthen the senior team’s oversight capability, offer new flexibility, and have virtually no impact on IRS employees. “These are critical areas we need to focus on, and this structure will reflect those priorities,” Werfel said.
The newly created role of the single IRS deputy commissioner will be filled by Doug O’Donnell, who currently serves as the deputy commissioner for Services and Enforcement. O’Donnell, boasting a career spanning over 37 years at the IRS, served as the acting IRS Commissioner from November 2022 through March 2023.
Prior to his current role, which he assumed in 2021, O’Donnell led the IRS Large Business and International (LB&I) Division for nearly six years. He joined the IRS in 1986 and has held a variety of roles throughout his tenure.
The move to a single deputy commissioner model, along with the establishment of four new chief positions, signals the IRS’s commitment to improving its services and meeting its transformation goals. The changes are expected to enhance the agency’s ability to adapt to the evolving needs of taxpayers and the broader financial landscape.
Key Leadership Appointments in Major Organizational Overhaul
As part of the restructuring, the Internal Revenue Service (IRS) has unveiled new leadership roles, each designed to enhance operational efficiency and taxpayer service. The newly appointed chiefs will report to Doug O’Donnell, the incoming single Deputy Commissioner.
Ken Corbin, currently serving as the IRS Wage and Investment (W&I) Commissioner, will take on the role of Chief, Taxpayer Service. This new department will oversee many aspects previously handled by Corbin’s W&I organization, including filing season work and taxpayer-facing operations. Corbin, an IRS veteran since 1986, brings extensive experience across various IRS divisions to this pivotal role, having served in multiple capacities throughout his career.
Heather Maloy, the IRS’s current Chief of Staff, will transition into the newly established role of Chief Taxpayer Compliance Officer. Maloy’s remit will include overseeing IRS compliance operations across several divisions. With a substantial background in various IRS roles and private practice, Maloy is well-positioned for this critical task. Following her move, Jonathan Warsh, currently Senior Counselor to the IRS Commissioner, will serve as Acting IRS Chief of Staff.
In 2024, Rajiv Uppal will join the IRS as Chief Information Officer. Uppal, who currently serves as the Director of the Office of Information Technology and Chief Information Officer for the Centers for Medicare and Medicaid Services (CMS), brings over 25 years of IT expertise to the IRS. His role will encompass the current IRS information technology division, currently led by Kaschit Pandya, the IRS’s Chief Technology Officer and Acting Chief Information Officer.
Melanie Krause, who joined the IRS in October 2021 as Chief Data & Analytics Officer, will assume the role of Chief Operating Officer. Krause, with a rich background in government service, will oversee several offices, including the Human Capital Office and the Chief Financial Office. She will continue to lead Research, Applied Analytics, and Statistics (RAAS) and co-lead the Data and Analytics Strategic Integration Board.
Commissioner Danny Werfel noted that the new governance model would better support the agency’s mission, giving heightened importance to key areas of taxpayer service, tax compliance, IT, and operations.
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