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IRS Commissioner Lauds Inflation Reduction Act's Funding for Agency's Improvements

S.J. Steinhardt
Published Date:
Aug 16, 2023

Funding from the Inflation Reduction Act has enabled additional staffing and improved customer service at the IRS, Commissioner Daniel Werfel said at a media briefing on Tuesday, The New York Times reported.

The $80 billion allocated to the IRS by the legislation has allowed the agency to expand its full-time employment ranks to nearly 90,000, the most since 2012, according to the 2022 IRS data book. Many of the new hires have been in the wage and investment division, the customer service division of the IRS. Others are specialists charged with identifying, investigating and auditing underreported tax liabilities or unfiled tax returns. The tax gap, the difference between tax money owed and what may go uncollected over the next decade, is $7 trillion.

The increased funding was also intended to enhance enforcement of the tax laws, but that intention came under attack by some congressional Republicans, who made unfounded claims about armed IRS agents coming to harass small businesses and middle class families. 

“There were suggestions that this funding was going to supply an army of armed IRS agents who are out to shake down average taxpayers,” Werfel told the reporters. “This myth should be laid to rest.” Recently, he announced an end to unannounced visits to taxpayers’ homes.

Werfel also touted the agency’s recent accomplishments such as digitizing paper tax filings and improving its customer service. The agency has also used the funding to improve and upgrade its technology. Werfel reported that average wait times for calls were reduced from 28 minutes to three minutes during the 2023 tax season, and the agency cleared a backlog of millions of unprocessed tax forms.

Despite these advances, the IRS has come under criticism by the Treasury Inspector General for Tax Administration for not safeguarding sensitive taxpayer information and by Republicans for its handling of the tax case against Hunter Biden.

Republicans were able to reduce the IRS’s Inflation Reduction Act funding by one quarter, to $60 billion, as a result of the recent deal to suspend the nations’ debt ceiling, but Werfel remained optimistic about his agency’s future.

“I believe that if we are funded in our base, that with the $60 billion, we can build momentum to prove to Congress and the American people that investments in the IRS pay off for taxpayers in a way that’s very positive,” he said.