`Magic Money’
By boosting enforcement, “they’re not going to get this ‘magic money’ that they think,” Reardon said, arguing the extra auditors may even backfire. “If you dial up enforcement on people who are otherwise following the rules and paying what they owe, you create resentment and anger. You undermine people’s confidence in the tax system.”

Advocates of more funding argue that the combination of dubious tax strategies among the wealthy and plunging audit rates on that same group makes it likely that many people and corporations are slipping through the cracks.

Should he be confirmed as the next IRS commissioner, Werfel will be charged with deploying the funds while managing a workforce and technology system suffering from years of cuts. In the past 12 years, the IRS has lost more than 23,000 employees. Another 50,000 of its roughly 80,000 workers are projected to retire by 2027.

“The IRS is going to have to be very strategic in the way it allocates those resources,” said former IRS Commissioner Charles Rossotti.

With Republicans holding a narrow majority in the House and promising increased oversight, Werfel, currently a global leader at Boston Consulting Group, will need to answer to conservatives and business lobbyists who have excoriated the IRS for decades.

Rossotti, who served when the IRS was also under attack from 1997 to 2002, estimates he was called to testify before Congress almost 50 times. His advice to Werfel is to try to defuse any criticism with candor.

“You have to try to be very careful and very honest and forthcoming about what you’re doing,” said Rossotti, who’s now at private equity firm Carlyle Group Inc. “It’s a big part of the job.”

Though nominated by Trump, Rettig — a veteran Beverly Hills, California, tax lawyer — lobbied vociferously for the Biden administration’s funding proposal, and warned his former colleagues to be careful how they advised wealthy clients.

“This is not the same old IRS,” he told a roomful of New York’s most sophisticated tax practitioners this year, saying the agency is scrutinizing a range of “abusive” transactions by the ultra-rich and boosting sanctions on tax advisers who lead clients astray.

He also defended his employees when false claims circulated that the agency was hiring thousands of “armed” agents. Only a fraction of them ever carry weapons, and the 3,000-employee criminal investigation unit — the subject of the rumors — has lost a quarter of its staff in 12 years.