Hatch Opening Statement at Treasury Nominations Markup

WASHINGTON – Senate Finance Committee Chairman Orrin Hatch (R-Utah) today delivered the following opening statement at a markup of the nominations of Justin Muzinich to be Deputy Secretary of the Treasury and Michael Desmond to be Chief Counsel for the Internal Revenue Service (IRS) and an Assistant General Counsel in the Department of the Treasury:

This morning we will consider the nominations of Justin Muzinich, to be deputy secretary of the U.S. Department of the Treasury and Michael Desmond, to be chief counsel for the IRS and an assistant general counsel in the Department of the Treasury. If confirmed, Mr. Muzinich will be responsible for assisting Secretary Mnuchin with the administration of the Treasury Department, including executing tax reform, which we are already beginning to see spur economic growth, create jobs and boost wages.

Mr. Muzinich’s position will be key, as we expect him to implement the new code efficiently and as intended so that all American taxpayers can continue to benefit from this legislation. In addition, Mr. Desmond, if confirmed, will serve as chief counsel for the IRS and an assistant general counsel in the Department of the Treasury. In these roles, Mr. Desmond will act as the chief legal advisor to the IRS Commissioner on all matters relating to interpretation, administration and enforcement of the tax code.

The chief counsel is also responsible for overseeing an office responsible for providing IRS agents and taxpayers with guidance on how to comply with our tax laws.

The ranking member has said that Mr. Muzinich has been insufficiently responsive to the committee’s questions. However, Mr. Muzinich has been prompt and fully responsive to all questions he is able to answer at this time, and I have full faith he will continue to be so should he be confirmed.

Before we move to the markup, however, I want to address again an issue my Democratic colleagues have insisted on raising as we’ve considered these two appointments. As I am sure most of you know by now, just a few weeks ago, the Treasury Department released new regulations that caused histrionics from the Democratic members of this committee. Now, my colleagues have railed on this action time and time again, despite its obvious irrelevance to these nominations.

They also brought up this issue while we considered the important nomination of Mr. Charles Rettig to lead the IRS. I suppose, if there’s an opportunity to make a straightforward vote on a critical nominee, our friends on the other side see it as an opportunity to grand-stand. That’s why, though I hope to be wrong, I expect my Democratic colleagues will argue against these nominees on the basis of these recent policy changes.

I spoke to this issue directly in a speech on the Senate floor just late week. I also addressed this issue during the hearing on Mr. Muzinich’s and Mr. Desmond’s nominations. But considering that my comments have continued to be ignored, I will briefly reiterate some history and the likely benefits of this proposed change.

In its Section 990 change, the Treasury Department altered a Nixon administration regulation that required social welfare organizations, labor organizations and chambers of commerce to report the names and addresses of their donors. This change was made because this rule had a number of underlying problems, most importantly that the IRS was collecting sensitive information it didn’t even need. After all, the types of donations in question are not tax deductible and are no longer subject to the gift tax.

Even if the IRS were to have a need for this sensitive information, it can easily acquire it through a direct request. Now, unless you’ve had your head buried in the sand for the past 20 years, you should understand several reasons why the IRS should be more cautious about the types of information it collects, how it stores it, and the methods they use to collect it.

This rule change shows that the Trump administration has also recognized that this change will save precious time and resources at the agency—another long-standing compliant of my friends on the other side. It will also better protect tax payer privacy. In short, this rule has been changed in an effort to protect taxpayer information, information that has been improperly leaked at least 14 times since 2010; it has been changed to help redirect IRS resources to better help taxpayers who need assistance; and it reflects a common-sense change in information collection now that we have a new tax code.

But, if that’s not enough for you, I think it is also important to recognize that this change is not actually a partisan change. Dangers to taxpayer privacy and misuse of important resources within the agency caused consternation during the previous administration as well. That’s why, under the Obama administration, the IRS proposed changes to Schedule B reporting beyond what was put in place last month.

But, again, you’d never expect that with how my friends on the other side are talking about this change. In fact, you might even think this is the end of the IRS as we know it. Such rhetoric is not only caustic to our ability to work together here in this committee, it also undercuts the IRS’s credibility, capacity to function, and makes it harder for the agency to enact common-sense, bipartisan policies in the future.

All of these reasons are just a few of the highlights for why I approve of the IRS and Treasury Department’s decision to cease pointlessly collecting this sensitive information that has only caused problems in the past. It is also why I would like to ask my Democratic colleagues to stop using this positive change as an excuse to grandstand. We’ve long been above such petty politicking on this committee, and I hope that we can return to our bipartisan form as quickly as possible.

Our country deserves it. And its citizens’ deserve to have two eminent professionals and dedicated public servants like Mr. Muzinich and Mr. Desmond properly installed so that the Treasury and the IRS can do the job they are supposed to do.

Since today is very busy and many members have other commitments, we will be holding these votes off the floor later today. Following Senator Wyden’s opening statement, other members will be given time to make statements, but we ask that you please limit your comments to no more than three minutes.

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