The IRS announced Thursday that it will hire over 20,000 more workers and deploy new technology over the next two years as part of an $80 billion investment plan to increase tax enforcement and customer service.
In its long-awaited Strategic Operating Plan, the tax agency stated that it will spend approximately $8.64 billion of the new funding during the fiscal years of 2023 and 2024 and that 7,239 of the new hires will be enforcement personnel.
IRS Hires More Taxpayer Service Agents to Improve Service
US Deputy Treasury Secretary Wally Adeyemo told reporters that the Internal Revenue Service (IRS) would be hiring a record number of data scientists to help with enforcement. These data scientists would work alongside tax attorneys and revenue agents to help identify audit targets using data analytics technology.
After hiring 5,000 additional taxpayer services employees in recent months to answer phone calls, reopen taxpayer assistance centers, and process tax returns, the IRS will continue to expand its customer service workforce.
According to the 148-page plan, customer service staffing using Inflation Reduction Act funds will total 6,489 full-time-equivalent positions over the two-year period, including these new hires.
An official from the United States Treasury has stated that nearly 12,000 IRS workers, including more than 4,700 enforcement staff, are expected to retire over the next two years.
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Targeting the Tax Gap through Audits
After a decade of primarily Republican-led budget cuts, the Inflation Reduction Act of 2018 provided $80 billion to help restore the agency’s audit capabilities and computer technology from the 1960s.
Treasury estimates that the tax gap between taxes owed and those paid is approximately $600 billion per year. By focusing new audits on the wealthiest Americans, the plan seeks to help close this gap.
The IRS said $47.4 billion nearly 60% of the $79.4 billion worth of investments listed in the plan would be allocated toward expanded enforcement of taxpayers with complex tax filings and high-dollar noncompliance.
New IRS Commissioner Danny Werfel told reporters that the agency’s audit staff has been cut by nearly half over the past decade, despite an increase in the number of audit targets such as wealthy individuals, corporations, and complex partnerships.
Recruiting tens of thousands of mid-career accountants, tax attorneys, and other staff capable of handling complex audits will be one of the IRS’s greatest challenges, according to tax experts.
The IRS is investing $12,4 billion in new technology and spending $4,3 billion on taxpayer services. By the end of the fiscal year 2024, early changes will enable taxpayers to respond online to dozens of tax notices.
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