Democrats Grill Trump's IRS Nominee On His Role Promoting Suspect Tax Credits

Forbes

21-05-2025

WASHINGTON, DC - MAY 20: Former Rep. Billy Long (R-MO), U.S. President Donald Trump's nominee to be Internal Revenue Service Commissioner, speaks during a Senate Finance Committee nomination hearing on Capitol Hill on May 20, 2025 in Washington, DC. The IRS has had four acting commissioners since U.S. President Donald Trump took office in January. (Photo by)
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The frustration on Senator Ron Wyden's (D-Ore.) face was clear. The Ranking Member of the U.S. Senate Committee on Finance expressed his concerns about the nomination of Billy Long, a former Republican congressman, to be IRS Commissioner. At the hearing on May 20, Wyden pulled no punches about Long, saying, 'Congressman Long's experience with tax issues came after he left Congress, when he dove headlong into the tax scam industry.'
Long does not have any formal training in tax, law, or accounting, does not have a college degree, and never served in Congress on a tax writing committee. He dropped out of the University of Missouri before returning to school—this time, to an auction training program at the Missouri Auction School. He was told, he explained to Auctioneer Magazine, that it was the "Harvard of auctioneering schools.' There, he earned his Certified Auctioneer designation.
In 2010, Long was elected as the U.S. Representative of Missouri's 7th Congressional District, serving until 2023. While in the House, he never served on any tax or finance committees.
During his confirmation hearing in the Senate, Democrats grilled Long about his recent history with controversial tax credits. One of those credits is the 'tribal tax credit.' If you're scratching your head to recall it, the credit doesn't exist. According to Wyden, Long's financial disclosure shows $65,000 in income paid to him by White River Energy, an Arkansas-based oil and gas company, that sold so-called 'tribal tax credits.'
Long said he never worked directly with White River, telling Chairman Mike Crapo (R-Idaho) at the hearing that his work was limited to providing referrals.
Long confirmed that he had promoted the credit, but said he had believed it was real. He didn't walk back the claim that they were real at the hearing, telling Wyden, 'I think the jury's still out on that. I know since 2022 they've been accepting them, so now they claim that they're not.'
Wyden says that Finance Committee staff asked the IRS about these credits, and the IRS responded, 'We can confirm that these tax credits do not exist.' The IRS went on to say that, 'Taxpayers who claim credits that don't exist are subject to penalties and possible examination. Furthermore, promoters of these credits may be subject to civil or criminal penalties.'
Promoters had assured taxpayers that the credits could be used to offset federal income taxes (unlike deductions, which only reduce taxable income, credits reduce the tax payable on a dollar-for-dollar basis).
When pressed by Wyden to name a tribe that was affiliated with the credits, Long was unable to do so. The affiliation was key to the promotion—according to an April letter to the IRS from Wyden and fellow Finance Committee member Sen. Catherine Cortez Masto (D-NM), promoters falsely claimed they obtained signed agreements with Native American tribes, including the Cherokee Nation.
Wyden noted that despite the fact that Long had not sought office since 2022 (when he lost in the GOP primary during an unsuccessful bid for the U.S. Senate), Long recently received more than $165,000 in campaign contributions, 'the vast majority of it from tribal tax credit promoters, including people at White River.' Wyden asked Long about the money, suggesting that Long might have made promises in return for campaign donations, but Long wouldn't confirm whether he had solicited the donations.
Wyden claimed at the hearing that the committee had tapes of conversations related to the scheme in which Long promised favorable private letter rulings. Wyden specifically said, 'We also have on tape the White River CFO, who gave you the thousands of dollars, that he expects favorable treatment of these fake tribal credits.' Long did not offer a response.
Democrats also raised concerns about Long's involvement with the employee retention tax credit (ERC).
Here's how the ERC works. Eligible employers are those that paid qualified wages to some or all employees after March 12, 2020, and before January 1, 2022. Typically, to qualify, you must show that your business was shut down by a government order due to the pandemic during 2020 or the first three calendar quarters of 2021, or that you faced a specific decline in gross receipts during the eligibility periods in 2020 or the first three calendar quarters of 2021. Additionally, some businesses may qualify as recovery startup businesses for the third or fourth quarters of 2021, as Congress phased out the ERC relief for businesses during that time.
As the pandemic ended, the number of companies claiming the tax credit increased. In September 2023, more than a year and a half after the program ended, the IRS declared a moratorium on processing, citing 'rising concerns about a flood of improper Employee Retention Credit claims.' The fear was that businesses were being pressured and scammed by aggressive promoters and marketing, making improper ERC claims that could put them at financial risk. 'We assumed we'd see a trickle," then IRS Commissioner Danny Werfel said, referencing the timing of the claims. "We are seeing a tsunami."
Long, working, he says, as a consultant, encouraged businesses to apply for the tax credit. During the hearing, Wyden challenged Long on the veracity of his claims, quoting from a podcast where Long reportedly said that 'everybody' qualified for the credit. Long corrected Wyden, saying he had listened to the podcast again in advance of the hearing, and noted that he said, 'virtually everybody.'
Long, or the companies he worked for, received a fee for the referral. Some tax professionals who reviewed the applications or taxpayer returns questioned whether the credits were proper, but were advised by the taxpayers that if Long was associated with the credit, it must be okay (a tax professional confirmed these kinds of conversations to Forbes).
The cost of the ERC ballooned over time, largely due to the increasing number of companies applying for it as the statute of limitations drew closer in 2025. Both Republicans and Democrats introduced legislation to end the program early, and the IRS intensified its efforts to discourage potential fraud, including the introduction of a disclosure program.
Senators also focused on concerns about the politicization of the IRS, an issue that has been in the spotlight more since Trump threatened to revoke Harvard University's tax-exempt status. Long has reposted social media posts critical of Harvard, Columbia, and other tax-exempt organizations.
When questioned by Sen. Elizabeth Warren (D-Mass.), Long initially suggested he would seek legal advice to make determinations about whether it would be appropriate for the president to direct the IRS to conduct an investigation or audit. Long replied, 'I'm gonna follow the law, and if that's the law, yes.' Warren confirmed that it was the law, reading aloud part of the statute (section 7217), which she noted that she had sent to him in advance.
Despite attempting to abolish the IRS in 2013, Long suggested during his hearing that he planned to modernize the agency, a view that was shared by former IRS Commissioner Werfel. He told the committee, 'I think we need to take the clues from private sector.' Long vowed to prioritize customer service for taxpayers, telling Sen. Todd Young (R-Ind.) that he wanted 'to be held accountable on all of this.'
Last month, reports indicated that the current administration was planning to eliminate Direct File, the free tax software program administered by the IRS. That move was more or less confirmed by a recent House Ways and Means Committee version of Trump's 'big, beautiful bill,' which would immediately terminate the program.
The Direct File program debuted in 2024. The pilot, the IRS claimed, was a success. The tax agency said that Direct File users reported a high degree of satisfaction and quick answers to their filing questions. After the first year, the Treasury Department declared that Direct File would be a permanent, free tax filing option. The IRS also expanded the program in 2025 to include more states and the ability to handle more kinds of income, credits, and deductions.
Still, the program remained unpopular with Congressional Republicans, who considered it to be unnecessary (the legislation introduced in the House to kill the program calls for the IRS to 'design a better public-private partnership between the IRS and private sector tax preparation services'). During the hearing, Sen. Thom Tillis (R-N.C.) told Long, 'Direct File needs to go away.'
Long responded diplomatically, saying, 'I know there's people on both sides that have different opinions on Direct File. I want to get to the bottom of it and see what is best for the hard-working employee partners that I will have at the IRS, if I'm confirmed, and the taxpayers, what's best for those two groups.'
The Senate Finance Committee must still vote on Long's nomination before it goes to the full Senate. That committee vote has not yet been scheduled.