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David Kautter becomes interim IRS chief in controversial move

13 November 2017

Josh White

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In a divisive move, the Trump administration has appointed former EY executive David Kautter as the interim head of the Internal Revenue Service (IRS) in place of outgoing commissioner John Koskinen.

Kautter will undertake his new role while also serving as the assistant secretary of the Treasury for tax policy at the same time.

He was appointed after the Republicans could not settle on who would take over from Koskinen.

As IRS commissioner, Koskinen faced intense opposition from the Republican Party. This went as far as an attempt to impeach Koskinen in 2015. Eventually the impeachment effort was dropped and Koskinen served the remainder of his term.

Before putting on two hats at the IRS, Kautter was a partner at RSM US for two years and served as managing director of the tax centre at the Kogod School of Business for four years. This was after more than 35 years at EY and its predecessor Arthur Young. Kautter has experience advising a senator on tax affairs, securities and banking regulation.

However, Kautter’s appointment has not been uncontroversial. During Kautter’s time as EY’s national director, four professionals at the Big 4 firm faced allegations of running an illegal tax shelter scheme for around 200 clients. While four of the practitioners were convicted in 2010, two of the sentences were overturned. EY paid the IRS $123 million in a settlement. It should be noted that Kautter was never charged, but his appointment could raise concerns at a time of heightened scrutiny over politicians and their affairs.

The US Treasury Department picked David Kautter to be acting director until the next candidate for commissioner can be nominated and face congressional scrutiny. The interim period could last for 120 to 190 days before a new appointment is made.

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