The IRS plans to hire 3,700 new employees, focusing on auditing millionaires, complex partnerships, and large corporations, as part of an expansive effort fueled by the Inflation Reduction Act to modernize the agency and improve taxpayer services. However, many Republicans fear this may increase the tax burden on financially struggling Americans.
The New Hires
The IRS announced its intention to hire 3,700 new employees nationwide, targeting higher-graded revenue agents in more than 250 locations after receiving an $80 billion dollar funding increase.
Taking on the Rich
The IRS says its goal is to focus on auditing millionaires, complex partnerships, and large corporations as part of efforts to enhance tax enforcement and customer service.
Improving the IRS
This hiring initiative is fueled by the Inflation Reduction Act, marking a significant step in the IRS’s transformation to improve service capabilities and reverse a decade-long decline in auditing high-income taxpayers and complex entities.
Commissioner Claims
IRS Commissioner Danny Werfel emphasized the strategic importance of this hiring wave, aiming to bolster the agency’s capacity to audit wealthier taxpayers and complex entities.
First Wave Improvements
Commissioner Werfel said, “Our first wave of hiring focused on taxpayer service positions to help improve our phone and in-person assistance.
This next wave of hiring will help the IRS add key talent like tax accountants to help reverse a decade-long decline of audits for the wealthy as well as complex partnerships and corporations.
These new employees will be focused on higher-income and complex tax areas like partnerships, not average taxpayers making less than $400,000.”
Technical Expertise
Revenue agent positions are specifically aimed at mid-career professionals with specialized experience and education, particularly those qualified at the GS-13 level in the federal civil service system.
This signals the IRS’s focus on technical expertise in tax enforcement.
A Big Expansion
The IRS plans to deploy nearly 20,000 new employees over the next two years, with a significant investment of $8.64 billion from the Inflation Reduction Act for the fiscal years 2023 and 2024, highlighting the scale of the agency’s expansion and modernization efforts.
Enforcement Staff
Among the new hires, 7,239 will be designated as enforcement staff, including an unprecedented number of data scientists, indicating a modern approach to identifying audit targets through advanced data analytics, complementing the traditional roles of tax attorneys and revenue agents.
Improving Customer Service
Over 6,489 full-time-equivalent staff will be dedicated to improving customer service through the Inflation Reduction Act funding, part of a broader initiative that also aims to replace nearly 12,000 IRS employees expected to retire in the next two years, including more than 4,700 enforcement staff.
Updating the Outdated
The investment seeks to rebuild the IRS’s audit capabilities and update its outdated 1960s-era computer technology after a decade of funding cuts by Republican-controlled Congresses, illustrating the challenges and needs of the agency in modernizing its operations.
Facing Criticism
The IRS’s plan has faced criticism from Republicans, who argue that it represents an unnecessary expansion of the IRS and have called for the repeal of the IRS funding as part of debt ceiling negotiations, reflecting the political controversy surrounding the agency’s modernization efforts.
Increasing Audits
In response to the increased IRS funding, Senator Steve Daines, a Montana Republican, said the IRS “plans to deploy an army of tens of thousands of IRS agents to increase audits on Montana families and reach into the pocketbooks of Americans.”
Republican Claims
IRS Commissioner Danny Werfel and Treasury officials have refuted Republican claims that the hiring would lead to an increase in audits on American families, emphasizing that the focus is on tax evasion among the wealthy and ensuring audit rates for those earning under $400,000 do not increase.
Challenges for the IRS
The IRS faces challenges in recruiting skilled mid-career professionals capable of handling complex audits in a tight labor market.
Competitive Problems
The competitive and operational challenges of implementing their strategic plan amidst salary limitations and the appeal of government benefits may impact their ability to accomplish their goals.
Staying Committed
Despite the political backlash, the IRS is committed to enhancing taxpayer service and ensuring fair and efficient tax enforcement, with the new technology and hires aimed at providing a customer experience on par with online banking and improving response times to taxpayer inquiries.
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