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Alumnus Profile: Danny Werfel MPP'97

September 8, 2014

Stepping Up as Chief Problem-Solver At IRS

By Jackie Ogburn

Daniel Werfel MPP’97 established a reputation as a problem-solver during his 15 years of service at the White House Office of Management and Budget. That reputation led to his appointment as acting commissioner of the Internal Revenue Service in May 2013, when the agency was under fire for possible political discrimination.

Werfel, who was selected as the Distinguished Alumnus speaker at the school's 2014 graduate programs graduation ceremony, had decided earlier that spring that he would leave public service for a time. Since 2009, he had been the controller at OMB and weathered several big challenges. He had helped manage the rollout of the stimulus funds and several rounds of imminent government shutdowns and had coped with the first phase of the sequester in early 2013.

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  • Photo of Danny Werfel with President Obama

    "An Honor to be Asked"

    President Obama and Danny Werfel discuss his duties as interim IRS commissioner in May 2013. Photo credit: The White House/Pete Souza

“The pace of the work was intense. I had missed several family vacations in a row,” he said. “It’s trite to say you want to spend more time with your family, but sometimes the trite things are true,” he said. Werfel was planning to take the summer off to consider career options and look for a new position for the fall. That’s not how things worked out.

On May 16, Werfel was told the chief of staff was looking for him, so he went to the West Wing. He learned the current interim IRS commissioner was stepping down and the president would like him to take the job.

“When the president and the secretary of the treasury say, ‘we need you to do this,’ of course you say yes,” Werfel said. He was also excited by the challenge. “It was a very significant, very different assignment for me, on a much bigger scale. It was such an honor to be asked,” he said.

Addressing the Agency's Challenges

The IRS was under pressure due to a report by the Treasury Department inspector general of what seemed to be unfair practices in approving nonprofit groups applying for tax exempt 501(c)(4) status. IRS officials had marked groups with terms such as “Tea Party” and “patriot” in their titles for extra scrutiny, to assess whether the groups were engaged in political activity. A separate report documented wasteful spending at IRS conferences. Several congressional committees and the Department of Justice both began their own investigations in mid-May.

When he began the job on May 22, Werfel had to figure out how to manage an organization of 85,000 people with a $12 billion budget and a battered reputation. The White House also asked him to produce a comprehensive review of the IRS in 30 days.

He decided he needed three key people to help him. Todd Grams, the CFO of the Veteran’s Administration, became his chief of staff. Werfel created the new position of chief risk officer and senior advisor to the commissioner for David Fisher, the CFO of the Government Accountability Office, the government’s watchdog agency. He also hired an experienced and seasoned litigator, Jennifer O’Connor, to help with the complex legal issues the agency was now facing.

With his leadership team in place, Werfel produced the report on time. It outlined several actions, such as an accountability review board, new leadership in key positions at the agency and a new focus on risk management, the lack of which Werfel saw as one of the causes of the agency’s troubles.

An Eventful Tenure

After the Supreme Court ruling on the Defense of Marriage Act, the IRS had to quickly issue new regulations on joint filing for same-sex couples. The federal government shut down for two weeks, just after the agency launched a suite of technological products involving the Affordable Care Act. “There were no failures reported for any of those products,” Werfel said.

He said his hardest tasks were balancing restoration of morale of the “99.9 percent of the employees who felt their good names had been tarnished, and wanted someone to fight for them” and the need for the organization to recognize its failures.

At the end of December 2013, Werfel left the position as acting commissioner and enjoyed his long-awaited time with his family. He has moved into the private sector and intends to return to public service later in his career.

Werfel says his passion for public service was sparked by a Sanford professor, the late Dick Stubbing. “He saw something in me and got me excited about public service and public policy. He was a great mentor and friend,” he said.

As the alumni speaker, Werfel sought to pay it forward – he  wanted to inspire graduates to consider a career in public service.  “Public service employees are bright and talented and every day, they do things that change lives, things that help people,” he said.

Revised; originally published 04/15/2014