Treasury Secretary Janet Yellen has set an ambitious target for the IRS to achieve an 85 percent level of service in answering taxpayer phone calls.
Yellen unveiled several new initiatives for the IRS in light of the additional funding provided by the Inflation Reduction Act (P.L. 117-169) and challenged employees to “meet the moment” during a September 15 speech at an IRS facility in New Carrollton, Maryland.
Yellen insisted that not only will the onboarding of more customer service staff allow the IRS to answer more phone calls, but it also will slash wait times. The IRS was estimated to have answered only 10 percent of calls during the last filing season.
“By hiring 5,000 additional customer service representatives, we will also cut phone wait times in half — from an average wait of nearly 30 minutes during the 2022 filing season to less than 15 minutes,” Yellen said.
Yellen also pledged to fully staff every IRS taxpayer assistance center in the country, which she claimed would triple the number of people served from 900,000 last year to 2.7 million.
The secretary also noted the modernization efforts underway. During her tour of the New Carrollton facility, IRS officials showed Yellen a collaborative workspace for employees as well as the updated software being used.
Yellen pledged that, given the new resources, the IRS will be able to automate the scanning of individual paper returns into native digital copies during the upcoming filing season.
“For taxpayers, this means faster processing and faster refunds. The IRS will also build online capabilities to enable taxpayers to fully interact with the agency digitally,” Yellen said, without providing details.
Yellen also repeated the administration’s promise that the IRS will use the added funds for enforcement to pursue only high-income tax dodgers and not individuals earning $400,000 per year or less.
“In addition to an IRS that can finally serve the American people, we will also have an IRS that makes sure that everyone pays their fair share,” Yellen said.
Fever Pitch
The speech was delivered in a packed auditorium of IRS employees that at times resembled a campaign rally, with Yellen regularly cheered by the crowd.
“I’m so excited” about the funding, an IRS employee told Tax Notes. “I usually work from home on Thursdays but came in to hear her speak.”
Notably absent was IRS Commissioner Charles Rettig, who was in Memphis, Tennessee, to commemorate the 50th anniversary of an agency facility. The Biden administration has been tight-lipped on naming a successor to Rettig — whose term expires in November — as well as a new IRS chief counsel.
No Smooth Sailing
While the White House has been portraying the additional IRS funding as a transformational moment in tax administration, questions remain over the efficiency and efficacy of some of the measures.
Alex Muresianu of the Tax Foundation cautioned against potential “unknown costs of the policy.”
“If you increase the number of people you are auditing, you will end up catching some people, but you will also be going after people that are paying their taxes,” Muresianu told Tax Notes.
“The big question is: Does the IRS get substantially better at which returns to audit?” Muresianu said.