What You Need To Know!
- The U.S. Internal Revenue Service (IRS) plans to hire nearly 30,000 new employees and deploy new technology over the next two years as part of an $80 billion investment plan to improve tax enforcement and customer service.
- The agency will obligate about $8.64 billion of the new funding during the 2023 and 2024 fiscal years, and 8,782 of the new hires during those years will be enforcement staff.
- The new funding aims to rebuild the agency’s audit capabilities and 1960s-era computer technology after a decade of funding cuts, and to help close the “tax gap” between taxes owed and those paid, estimated at some $600 billion a year, by focusing new audits on the wealthiest Americans.
The U.S. Internal Revenue Service (IRS) has announced a plan to hire almost 30,000 new employees and invest in new technology over the next two years, as part of an $80 billion plan to improve tax enforcement and customer service.
The Strategic Operating Plan, released on Thursday, indicates that the agency will spend around $8.64 billion during fiscal years 2023 and 2024, with 8,782 of the new hires being enforcement staff.
The agency has been struggling to improve its audit capabilities and update its computer technology after years of funding cuts. This new investment will help close the “tax gap,” estimated to be around $600 billion per year, between taxes owed and those paid.
The plan is to focus new audits on the wealthiest Americans. Deputy Treasury Secretary Wally Adeyemo said that the IRS would be hiring more data scientists for enforcement purposes, which would complement more traditional tax attorneys and revenue agents, who will use new data analytics technology to identify audit targets.
The new funding will also help the IRS ramp up its customer service hiring, with 13,883 full-time-equivalent staff over the two-year period.
This includes the 5,000 new taxpayer services staff who were recently hired to answer telephones, reopen taxpayer assistance centers, and process tax returns. However, many of these new hires will replace the nearly 12,000 IRS employees who are expected to retire over the next two years, including more than 4,700 enforcement staff.
IRS Commissioner Danny Werfel stated that the agency would provide hiring and spending plans for the 2025 fiscal year and continually update the operating plan.
The agency’s ability to deploy new technology to automate many functions would help dictate future staffing needs.