U.S. IRS to Hire Nearly 30,000 Staff Over Two Years With $80 Billion in New Funds

The U.S. Internal Revenue Service plans to hire nearly 30,000 new employees and deploy new technology over the next two years as it ramps up an $80 billion investment plan to improve tax enforcement and customer service.

The tax agency, in its long-awaited Strategic Operating Plan, said it will obligate about $8.64 billion of the new funding during the 2023 and 2024 fiscal years, and that 8,782 of the new hires during those years will be enforcement staff.

“The IRS is going to hire more data scientists than they ever have for enforcement purposes,” U.S. Deputy Treasury Secretary Wally Adeyemo told reporters, adding that these would complement more traditional tax attorneys and revenue agents in using new data analytics technology to identify audit targets.

The IRS also will continue to ramp up customer service hiring after taking on 5,000 new taxpayer services staff in recent months to answer telephones, reopen taxpayer assistance centers and process tax returns.

Including those new employees, customer services hiring will total 13,883 full-time-equivalent staff over the two-year period, according to the 148-page plan.

But a significant portion of these new hires will replace the nearly 12,000 IRS employees expected to retire over the next two years — including more than 4,700 enforcement staff, a U.S. Treasury official said.

The $80 billion in new funding from last year’s climate-focused Inflation Reduction Act is aimed at rebuilding the agency’s audit capabilities and 1960s-era computer technology after a decade of funding cuts mostly by Republican-controlled Congresses.

It also aims to help close the “tax gap” between taxes owed and those paid, estimated by Treasury at some $600 billion a year, by focusing new audits on the wealthiest Americans.

COMPLEX AUDITS

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.”

Those audit targets include wealthy individuals, corporations and complex partnerships, which have grown in number while IRS audit staff has shrunk by nearly half over the past decade, new IRS Commissioner Danny Werfel told reporters.

Source: Financial Post