IRS commissioner Danny Werfel said Friday he plans to resign next Monday, Jan. 20, coinciding with Inauguration Day.

President-elect Donald Trump announced plans last month to nominate former Rep. Billy Long, a Republican from Missouri, as the next IRS commissioner, even though Werfel’s term doesn’t end until November 2027. 

“While I had always intended to complete my full term as Commissioner, the President-elect has announced his plan to nominate a new IRS Commissioner,” Werfel said in an email Friday to all IRS employees. “I have been touched by those who have reached out to me to share how they were hopeful that I could remain in seat and continue the important work underway. But as civil servants, we have a job to do, and that job is to now ensure a new Commissioner is set up for success.”

Werfel has been serving as IRS commissioner since March 2023 after previously serving as acting commissioner in 2013, bringing much needed stability to the agency after a scandal erupted over the delayed approval of political groups for tax-exempt status. During his most recent tenure, he oversaw tax seasons that ran relatively smoothly thanks to increased funding from the Inflation Reduction Act as well as the launch of the free Direct File program for electronic filing.

“After significant introspection and consultation with others, I’ve determined the best way to support a successful transition is to depart the IRS on January 20, 2025,” Werfel wrote. “While leaving a job you love is never easy, I take comfort in knowing that the civil servant leaders and employees at the IRS are the exact right team to effectively steward this organization forward until a new IRS Commissioner is confirmed. I know this because of what I have seen you achieve over the past two years — remarkable work that will serve as a strong foundation for the future.”

Werfel said he has been holding discussions with members of Congress and the presidential transition team to ensure a smooth transition at the IRS as the start of tax season approaches on Jan. 27.

“At the IRS, we can’t take any days off in protecting the non-partisan nature of our work,” he wrote. “And this of course includes during a presidential transition. In the past few weeks, I have had discussions with IRS employees, members of Congress, staff on the transition team and other stakeholders on how the IRS can best ensure a successful transition to a new administration. I start each of those conversations with the same key point: As a non-partisan entity, the IRS will work as tirelessly to support the incoming Treasury team’s agenda just as we have for the outgoing Treasury team.”

Werfel was asked during a press conference last week about how long he plans to remain at the IRS and insisted he has remained “laser focused” on his job and preparing for filing season.

“I spend every waking hour during the day and, quite frankly, at night, focused on one thing and one thing only, and that’s getting ready for this filing season,” said Werfel. “That has consumed all of my energy, and that is my sole focus.”

Long has not yet been officially nominated by Trump, and in the meantime, deputy commissioner Douglas O’Donnell will be in charge of the agency.

“Deputy Commissioner Douglas O’Donnell, with his extensive experience and proven leadership, will step in as Acting Commissioner, to ensure a smooth transition and continuity of the agency’s critical work until a new Commissioner is confirmed,” said Werfel on Friday. “Over the next few days, we will provide more specifics on leadership changes. I also want to thank the Treasury Secretary, the Deputy Secretary, and their entire leadership team who have been active champions for all the positive change underway.”

Werfel has been leveraging the funding from the Inflation Reduction Act to improve taxpayer service, technology and enforcement at the IRS, including new digital tools such as the Tax Professional Online Account

“We are making major progress toward the same modern experience that taxpayers get with their bank or financial institution,” he wrote. “We launched more digital tools in the last two years than the previous 20, making it easier for taxpayers to access services and manage their accounts. This includes more than two dozen new features and enhancements to Individual and Tax Professional Online Account and the launch of Business Tax Account.”

The IRS has also been ramping up enforcement, doing more audits of large partnerships and corporations and high-income taxpayers, as well as cracking down on abuse of the Employee Retention Credit, imposing a temporary moratorium on processing new ERC claims. The IRS has since lifted the moratorium, but a recent report from National Taxpayer Advocate Erin Collins has criticized the slow processing of the claims. while lauding other improvements in taxpayer service at the IRS. Long has been a booster for the ERC since leaving office and was recently questioned about it by Sen. Elizabeth Warren, D-Massachusetts, in a letter last week.

Werfel highlighted some of his other accomplishments in his email to IRS employees. “We launched new initiatives to ensure tax enforcement is fair by strengthening complex and high-end enforcement,” he wrote. “In just one example, more than $1.4 billion has been recovered from a small number of high-income people who have not paid overdue tax debt or filed tax returns for many years. Lastly, we have made major progress updating foundational technology to process transactions more quickly, transparently and securely. We have turned a corner on modernizing our core processing system, the Individual Master File, and we are now running the new system in parallel with our legacy system, a longstanding goal of the agency. Brick by brick — and online tool by online tool — we are making improvements that will empower IRS to more quickly implement any tax code changes like those that may be enacted in 2025, while reducing the costs of maintaining IRS systems.”

BDO USA, New York, announced a cause partnership with Big Brothers Big Sisters of America, marking the firm’s first national strategic nonprofit collaboration and beginning a three-year relationship with BBBSA to invest in future generations and enhance youth well-being.

The International Auditing and Assurance Standards Board added five new members following their appointments by the Public Interest Oversight Board in November: Nancy Cheng, board chair of Icddr,b; Amaro Gomes, independent consultant and member of the audit committee at Banco Bradesco; Mikiko Ono, director of sustainability disclosure regulation and investor & stakeholder engagement at Recruit Holdings Co.; and Xiaoyue Sun, partner with BDO China and a member of the Auditing Standards Board of China. The IAASB also announced two members were reappointed by the PIOB for terms that also began Jan. 1, 2025: William Edge, chair of the Auditing and Assurance Standards Board for Australia from 2021 to 2023, and the chair of Financial Reporting Council in Australia from 2016 to 2020; and Neil Morris, global head of assurance and ESG methodology at KPMG. Additionally, IAASB vice-chair Josephine Jackson was reappointed as vice-chair for a final year of service.

The International Ethics Standards Board for Accountants added two new members following their appointments by the PIOB in November 2024: Nancy Miller, managing director in risk management – audit and independence, KPMG; and Obichukwu Nwazota, managing consultant, UGN Consulting Services Ltd. The IESBA also appointed Channa Wijesinghe as the board’s vice chair, and reappointed Mark Babington, Christelle Martin and Rich Huesken to the board.

Grassi, New York, joined international association PrimeGlobal. 

KPMG announced it is sponsoring the annual Historically Black College and University Showcase Jan. 18 at The Armory in New York for the third consecutive year, an event that brings together track and field programs from HBCUs across the country.

EY released its 2024 EY Nature Risk Barometer report, which provides insights into nature-related corporate disclosures against Taskforce on Nature-related Financial Disclosures recommendations.

Deloitte launched its Q4 2024 CFO Signals survey, which provides a detailed view of CFOs’ perspectives on the economy and their most pressing concerns.

As we enter the beginning of 2025, bonus depreciation continues to leverage down as more portions of the Tax Cuts and Jobs Act expire. Bonus depreciation was one of the significant provisions in the TCJA, with 100% bonus depreciation by the end of 2022. Unfortunately, this was a temporary provision, and the amount of bonus depreciation started leveraging down by 20% per year in 2023; going into 2025, the bonus depreciation rate will be 40%.

To understand how to make decisions, it is essential to understand how bonus depreciation works. Bonus depreciation is an acceleration of depreciation adjustments into the first year. Eligible property includes assets with a life of 20 years or less. This can include personal property, land improvements and qualified improvement property. Critical to the availability of bonus depreciation for many taxpayers is that the TCJA extended bonus depreciation to used and new property. This means a taxpayer purchasing an existing warehouse can use bonus depreciation to accelerate the land improvements, such as the parking lot and any personal property acquired along with the property.

Unfortunately, with bonus leveraging down, the value of this accelerated depreciation deduction is lessened. Going into 2025, the bonus depreciation rate is only 40%; this means that a taxpayer who purchases a parking lot for $100,000 would get a $40,000 bonus depreciation expense, and the remaining $60,000 would be depreciated over 15 years at a 150% declining balance method.  

One of the main goals of the incoming administration is to bring back the TCJA policies; this will likely include reinstatement of 100% bonus depreciation moving forward. It is important to note that this will likely only impact assets acquired after the law is enacted. If we look at past extensions of bonus depreciation, they have been prospective only. For example, when the TCJA came out in 2017, property acquired after Sept. 27, 2017 was eligible for 100% bonus depreciation. However, assets acquired before that date were subject to the old rules. What does this mean for businesses in 2025? 

Unfortunately, businesses acquiring assets before the anticipated announcement of the new regulations will most likely be subject to the current bonus depreciation amounts. Even if a taxpayer delays placing an asset in service, they will most likely be subject to the current rules, as the new law will look at when the taxpayer was under contract or started construction.

For taxpayers completing projects in early 2025 or even 2024, what are some options to expand the value of expensing? One option for many taxpayers is to look closely at 179 expensing. Section 179 allows taxpayers to deduct the cost of qualifying improvements immediately, including personal property and some real property, including qualified improvement property, roof replacements and HVAC replacements, when installed on nonresidential real property. However, like all good things, 179 has restrictions. Section 179 is limited to $1,000,000 indexed for inflation; for 2024, this inflation increase means up to $1,220,000 in eligible assets qualify.

One of the biggest issues is that not all investments are eligible for 179; first, Section 179 of the code limits the use if a business acquires more than $2,500,000, indexed for inflation, of eligible assets. The bigger restriction for many investors is that 179 is limited to assets used to create income “from a trade or business.” This traditionally means that assets held simply for an investment will not qualify for this deduction. Under Publication 946, the IRS states that “investment property, rental property (if renting property is not your trade or business), and property that produces royalties” do not qualify.

So, what are taxpayers to do in 2025? The first thing is that taxpayers who qualify for 179 must consider 179 when completing their taxes. Making sure to maximize 179 over bonus depreciation can make a massive difference in the tax liability for individuals. The other thing taxpayers should do is look to maximize their eligible property through cost segregation or other depreciation analyses to make sure they are getting every dollar of deduction to come their way.

What should taxpayers not do in 2025? Right now, the biggest mistake taxpayers can make is to wait for Congress to act on a new tax bill before moving forward. As mentioned above, the likelihood is that any tax bill will change these items only in a prospective manner. Waiting for a tax law change for most taxpayers will have little effect on assets they are already under contract to acquire. While a tax bill could affect future investments, it will most likely not affect 2024 tax planning or investments in early 2025.

While tax policy could change dramatically in 2025 under the new administration, understanding the interaction of 179 and bonus depreciation can drastically affect outcomes in 2024 and 2025 tax returns. While planning for changes in the Tax Code can be beneficial, taxpayers must also look at how to maximize savings based on the current law.