Charles Rettig, nominee to lead IRS, aims for ‘impartial’ guidance on tax law workarounds

California tax lawyer Charles Rettig, President Trump’s pick to be the next IRS commissioner, on Thursday pledged to run the agency in an independent, unbiased manner if confirmed — including when it comes to how the agency plans to deal with a number of state workarounds to the new tax law.

“If I am confirmed as commissioner of the Internal Revenue Service, we will follow the law, impartially, in a non-biased manner,” Mr. Rettig said at his confirmation hearing before the Senate Finance Committee. “Nobody should presuppose my position on any particular issue across the board.”

Sen. Robert Menendez, New Jersey Democrat, had pressed Mr. Rettig on a recent notice from the Treasury Department warning states to tread carefully as they weigh gimmicks to try to let wealthier taxpayers avoid higher bills under the new law.

Several states, including New Jersey, have created new state or local funds that taxpayers can pay into, then take a charitable deduction on their federal taxes to lower their overall tax burden, as a response to a new $10,000 cap on a state and local tax deduction that has a disproportionate effect on blue, higher-tax states.

Mr. Menendez said he didn’t want to see the IRS “weaponized” against states like his, and that many other states have implemented similar systems.

Mr. Rettig did say there’s a possibility that the situation after the passage of the new tax law might not be “on all fours” with an earlier IRS notice saying that a cash payment to a state agency can be considered a charitable contribution.

Mr. Rettig said he wanted forthcoming guidance on what states are allowed to do to be “accurate, impartial, non-biased, and clear.”

He said the matter wasn’t a major issue at his practice, where he has dealt with handling tax controversies, at times for wealthier clients with complicated holdings.

Mr. Rettig also said in his testimony that the successful implementation of the $1.5 trillion tax-cut law will be among his “highest priorities” as commissioner.

“If I am privileged to serve as commissioner, my overriding goal will be to strengthen and rebuild trust between the IRS, the American people, and their representatives in Congress,” he said.

David Kautter, assistant secretary of the Treasury for tax policy, is currently serving as acting IRS commissioner. Former commissioner John Koskinen’s term expired in November.