Treasury Secretary Janet Yellen on Thursday announced one of the Internal Revenue Service’s immediate spending priorities as the tax agency gets $80 billion in funding: more people picking up the phone when they call next tax season.
The $80 billion allocated to the IRS in the newly enacted climate, tax and health care spending bill (the so-called Deflation Act) will pay for many reforms to the agency, including more auditors focused on corporations and wealthy taxpayers, as well as technology upgrades for the agency, which is overwhelmed by paperwork.
In addition, the IRS plans to hire 5,000 more customer service representatives, Yellen said, as she continues to try to sell the benefits of the Inflation Act to the public.
More phone operators should cut the average 30-minute wait times taxpayers faced this tax season to 15 minutes, Yellen predicted.
During several recent tax seasons, IRS call representatives were able to speak with fewer than two out of 10 callers, as measured by an internal metric called “level of service.” Next year, the IRS wants to push that service level up to 85%, Yellen said.
In early March, taxpayers tried to call the IRS about 36 million times. Of those calls, 7.4 million were answered by automated responses, and IRS employees answered 2.7 million calls, according to a report by the Treasury Department’s inspector general for tax administration.
There are many areas where the struggling and lagging tax agency could use more people and more money, experts say. Additional customer service was the most visible example, he said. The IRS will lose more than 8,600 customer service representatives between 2010 and 2020, according to Tony Reardon, national president of the National Treasury Employees Association.
The IRS still has to unveil its specific plans for how it will use the $80 billion in additional funding over the next decade. When Senate Democrats break down how the money is allocated, $3.1 billion will go to “taxpayer services” and $45.6 billion will go to enforcement. Another $25 billion is for operations support, and nearly $5 billion is for “business system modernization.”
Yellen said incoming IRS hires aim to fill positions at taxpayer assistance centers that provide face-to-face assistance. Of course, the IRS must compete for workers in a tight labor market. It’s a challenge that IRS Commissioner Charles Rettig has previously described.
IRS telephone service representative jobs start in the federal job pay band, with pay ranging from $31,083 to $40,407, according to an IRS spokeswoman. Actual Pay Bands A person can start at a higher point based on the cost of living in which they are employed. For example, in the expensive New York City metro area, the same pay band starts at $41,981.
Yellen spoke on Thursday in New Carrollton, MD. , said at an IRS facility at the site, where most of the 7,500 employees have IT-related jobs, a Treasury Department official said.
The facilities were an example of the modernization the IRS had long sought — and should be ready to receive with the new funding, Yellen noted.
Next tax season, Yellen said, the IRS plans to automatically scan millions of paper-filed tax returns to streamline the tax process.
The IRS is still going through a backlog of tax returns due in part to office closings during the pandemic, new responsibilities for the agency such as sending stimulus checks, and outdated businesses.
At the end of August, the result was down to 8.2 million unprocessed returns, the agency said. Of this total, approximately 6.5 million are paper returns that we review, process and file for overpayments. Another 1.7 million errors require permanent or special processing. Rettig previously said the plan is to be fully operational by the end of the year.
On Thursday, Yellen took a swipe at some Republican critics who misrepresented the IRS’s hiring plans in an effort to bring in 87,000 more auditors to lead the way in the inflation-reduction law’s provision to lower and lower income levels of taxpayers.
The 87,000 number is an estimate from a 2021 Treasury Department report, which also includes many existing workers slated to retire in the coming years. Meanwhile, their future hiring plans and actual numbers include more auditors for wealthy families and corporations, as well as other workers such as call center operators.
His fiery speech has the IRS worried about employee safety. The tax agency is now reviewing safety and security measures, Rettig said late last month.
On Thursday, Yellen told IRS employees, “I want you to hear from me. Nothing is more important to me than for you to do your important work for the American people, especially in the recent times of highly unfair and dangerous misinformation and threats.”
Republicans continued to criticize Yellen as she spoke. “Instead of trying to ease the pressure of inflation, secure our borders or protect citizens from criminals, Democrats voted to release more IRS agents to audit American families and small businesses,” Senate Republican Leader Mitch McConnell tweeted Thursday morning. Office.