On Thursday, the Internal Revenue Service revealed its highly anticipated spending blueprint for an $80 billion cash injection, promising to recruit numerous new employees to conduct audits on affluent Americans and large corporations.
The plan outlines the IRS’s approach to utilizing the funds over the following ten years, outlining proposals for technological advancement, customer service enhancement, real-time notifications, provision of top-tier customer service, and combating the “tax gap” by bolstering the scrutiny of wealthy individuals.
The Treasury Department had previously stated that the funding increase would enable the IRS to double its staff by hiring approximately 87,000 new employees over the next decade. Nonetheless, the operating plan does not specify the agency’s hiring goals beyond the next few years.
According to the IRS’s much-anticipated Strategic Operating Plan, the agency will allocate roughly $8.64 billion of the newly acquired funds over the 2023 and 2024 fiscal years, with 8,782 of the new personnel brought on during those years designated as enforcement staff.
During a press briefing, U.S. Deputy Treasury Secretary Wally Adeyemo disclosed that the IRS plans to employ an unprecedented number of data scientists for enforcement purposes. He added that these professionals, in addition to conventional tax attorneys and revenue agents, will leverage new data analytics technology to pinpoint audit targets.
Does anyone believe the IRS won’t go after middle America? Fire Biden’s new IRS agents and hire 25,000 new Border Patrol and ICE agents. https://t.co/WQpNyNyZ0F
— Nikki Haley (@NikkiHaley) April 6, 2023
In addition, the IRS will continue to expand its customer service staff, having already hired 5,000 new personnel to manage taxpayer services in recent months, including answering phone calls, reopening taxpayer assistance centers, and processing tax returns.
The $80 billion in new funding, which was provided by the Inflation Reduction Act of last year, aims to restore the IRS’s audit capabilities and upgrade its outdated computer technology from the 1960s. This comes after a decade of funding cuts, primarily by Republican-controlled Congresses.
The Congressional Budget Office approximates that the new funding will produce roughly $204 billion in fresh revenue over the next decade, funds that will contribute to financing the investments made by the Inflation Reduction Act. The Treasury Department has predicted that the amount could be as much as $400 billion over the decade, with the potential for increased collections beyond the budget window of ten years.
Danny Werfel, the newly appointed IRS Commissioner, informed reporters that the agency would soon present its hiring and spending plans for the 2025 fiscal year and would regularly revise the operating plan. He said that the agency’s ability to incorporate new technology to automate various processes would play a significant role in determining its future staffing requirements.