By Fatima Hussein | Associated Press
WASHINGTON — The IRS on Thursday released details of how it plans to use an $80 billion drip for improved operations, promising to invest in new technology, hire more customer service representatives, and expand its ability to help high-net-worth taxpayers. to check, expand.
While some Republicans have suggested without evidence that the money from the Democrats’ landmark climate change and health care bill would help create a mob of armed auditors to harass middle-class taxpayers, new IRS Commissioner Daniel Werfel said it was no expenses for new agents will include guns.
The agency’s newly released strategic operating plan details how the IRS will allocate the $80 billion, through fiscal year 2031, authorized in that legislation.
Some improvements have been long overdue, such as bringing more paper systems online and quickly answering taxpayer calls. Others are more ambitious: keep looking for ways to create, say, a government-run electronic tax filing system with free files.
No hiring boost is foreseen for the detective unit, which represents 3% of the agency’s workforce and employs about 2,077 special agents as of fiscal year 2022, according to the IRS’s annual report. Those are the agents who may be armed.
There are “no plans to increase that division,” Werfel said while speaking to reporters. “That will remain at the current pace.”
Since President Joe Biden signed the measure known as “the Inflation Reduction Act” in August, some Republicans have claimed the IRS would use the new money to hire an army of 87,000 gun-toting tax agents.
That claim stems from a plan the Treasury Department proposed in 2021 to hire as many IRS employees over the next decade as it gets the money. At least 50,000 IRS employees are expected to retire in the next five years.
The strategic plan does not contain definitive figures on long-term recruitment.
Speaking to reporters, Wally Adeyemo, assistant secretary of the treasury, said the plan is “strongly driven by the fact that we need to make technology investments that will improve productivity, which will mean that over time, the number of employees and the The mix of employees at the Tax and Customs Administration is going to change.”
After Congress passed the legislation last summer, Treasury Secretary Janet Yellen directed the IRS to develop a plan outlining how the IRS would review its technology, customer service and hiring processes. Her memo sent instructions to the IRS leadership not to increase audit rates for people making less than $400,000 a year.
Officials are not promising to “increase audit rates for small businesses and households earning less than $400,000 a year, compared to historical levels.” The report says more than half of the new money — $45.6 billion — will be spent chasing high net worth individuals and companies.
“Given the size and complex nature of these tax returns, this work often requires a specialized approach, and we will make these resources available,” the report said. “We will use data and analytics to improve our understanding of high net worth individuals’ tax returns.”
Treasury and IRS officials have promoted the impact of the new spending on internal processes in recent months.
Robert Nassau, director of the Low Income Taxpayer Clinic at Syracuse University College of Law, said he’s seen some noticeable differences.
“The phone line has improved amazingly, that part of the IRS works amazingly better,” he said. “But I see that the processing time of written submissions has not returned to pre-pandemic adequacy.”
Extra money for the IRS has been politically controversial since 2013, when it emerged that during the Obama administration, the agency had investigated political groups seeking tax exemptions. A report by the Treasury Department’s internal watchdog found that both conservative and liberal groups were chosen for further scrutiny.
National taxpayer advocate Erin Collins wrote in a blog post that the while plan is disproportionately focused on enforcement, “for the first time in my 40 years as a tax professional, the stars of the IRS seem to be aligned,” with the recently released plan.
Jean Ross, a senior fellow at the Center for American Progress, said in an emailed statement that “the funding will more than pay for itself by ensuring that the IRS can hold the very wealthy and large corporations accountable.”