He promised huge tax refunds. Now Trump wants him to lead the IRS

Billy Long, left, who left Congress in 2023, speaks with Rep. Jason Smith (R-Mo.) before a hearing with testimony from Daniel Werfel, the commissioner of the Internal Revenue Service, for the House Committee on Ways and Means on Capitol Hill in Washington, on Thursday, Feb. 15, 2024. Long, an auctioneer and former Republican representative from Missouri, is President-elect Donald Trump’s pick to lead the Internal Revenue Service. (Haiyun Jiang/The New York Times)

By Andrew Duehren

When Billy Long, now President-elect Donald Trump’s pick to lead the IRS, left Congress in 2023, he quickly set out to make money. Building off the relationships he developed as a Republican from Missouri and auctioneer, Long began encouraging people to file for a lucrative, pandemic-era tax credit.

At meetings with chapters of Hispanic Chambers of Commerce across the country and at an auctioneering convention in Oklahoma, Long sometimes wore a hat advertising the Employee Retention Tax Credit as he tried to drum up business. Working with companies that would fill out the paperwork for the tax credit in exchange for a portion of the client’s refund, Long had success.

“What’s working for me is the trust factor because people know me,” he said in a podcast interview last year about his work, describing clients who received tax refunds of more than $1 million. “They’ve known me for 40 years in the auction business, or whatever they see me getting this money for their compadres.”

The money spigot would soon shut off. In September 2023, the IRS temporarily stopped processing claims for the credit, hoping to squash widespread fraud in the program. The tax break, aimed at supporting businesses that kept employees on payroll during the pandemic, had spawned a cottage industry of tax preparation firms steering people, including those who were not eligible for the credit, toward it. The IRS began warning people about scams related to the tax credit, including firms that were “wildly misrepresenting and exaggerating who can qualify for the credits.”

The fiscal cost of the tax refund bonanza was steep. What analysts had initially expected would be a roughly $55 billion program had ballooned into a $230 billion one, with projections that its cost could ultimately hit $550 billion.

Long, in the 2023 podcast interview, said he would help only clients who were actually eligible for the credit, and added that the fees he and his associates collected would be returned to any clients that had their tax refund revoked by the IRS. The companies he said he worked with — Commerce Terrace Consulting, which says on its website that it has provided $400 million in tax savings, and Lifetime Advisors — did not respond to a request for comment.

This year, Long traveled to Washington to try to persuade his former colleagues in Congress, who were considering closing the program because of its ballooning cost, not to follow through. The program was not shut down, and the IRS has started processing claims for the credit again, but with new anti-fraud measures in place.

If the Senate confirms Long to lead the tax collection agency, he will be in a position to ease access to the tax credit. During his time generating claims for the employee retention credit, Long said, he repeatedly tried to persuade potential clients to disregard the advice of their accountants, who doubted whether they could qualify for the credit.

“I tell them of some cases of where people started down the road with their CPA, and their CPA, frankly, threw up their hands and said: ‘Go back to Billy. Let Billy do it for you,’” Long said during the podcast, using the abbreviation for a certified public accountant. “So because when people walk in and say, ‘Hey, this auctioneer, real estate broker, former congressman told me, I’m going to get $1.2 million back. You’re my CPA — why didn’t you tell me that?’ Instantly, the reflex reaction is to go to bashing.”

A spokesperson for Trump did not respond to a request for comment.

Long’s selection to lead the IRS is unusual. Since the 1990s, IRS commissioners have had five-year terms, and the position has been treated as a relatively nonpartisan management job, which now oversees the more than 80,000 employees who collected nearly $5 trillion in taxes last fiscal year. The term for Daniel Werfel, the current leader of the IRS, who was nominated by President Joe Biden, is not up until 2027.

“The concern is turning the commissioner into a political position,” said John Koskinen, a former IRS commissioner. “You run the risk that every audit will be a question of: Is this a weaponization of the IRS? Did somebody tell them to make this audit, or is this routine?”

Biden, whose administration pushed for and won more funding for the IRS, chose Werfel to lead an overhaul of the tax collector after years of budget woes. Democrats plowed roughly $80 billion in supplemental funding into the agency, in hopes of modernizing it and collecting more tax revenue from Americans who do not pay what they owe.

But Republicans quickly mobilized to claw back that money, successfully forcing Democrats to cancel $20 billion of it as part of a deal to raise the debt limit in 2023. An additional $20 billion is also at risk as Republicans have exploited a quirk in spending legislation to freeze more money.

It is unclear how Long would approach the IRS push to modernize. He once sponsored legislation that sought to abolish the tax agency and replace the income tax with a sales tax, a concept Trump has flirted with. But Long did not serve on the tax-writing committee in the House, and he is unknown to some key Senate Republicans who will decide his fate.

“Protecting taxpayers and addressing an ever-encroaching IRS is a top priority, and I look forward to learning more about Mr. Long’s vision for the agency,” Sen. Mike Crapo of Idaho, the top Republican on the Senate Finance Committee, said in a statement.