The U.S. Internal Revenue Service kicks off the 2023 income tax filing season on Monday armed with 5,000 new customer service representatives to slash call waiting times as the Biden administration implements $80 billion in new IRS funding.
The new hires and technology improvements to more efficiently process paper tax returns and documents represent an early emphasis on improving services, according to U.S. Treasury officials.
Such efforts are taking precedence over increasing the number of audits as Republicans in Congress prepare to demand a scaling-back of the new funding provided by President Joe Biden's signature climate, health and tax bill, the Inflation Reduction Act (IRA).
U.S. Deputy Treasury Secretary Wally Adeyemo told reporters that the 5,000 new customer service hires will be trained by Feb. 20, when call volume from taxpayers typically increases.
He said the goal for the tax agency was to halve the average hold time for callers to 15 minutes, and for 85% of callers to reach a human operator, up from 15% last year.
Other improvements include fully staffing the 361 IRS taxpayer service centers to triple the number of Americans that receive in-person help with their taxes, as well as creating new online portals to allow taxpayers to upload documents rather than sending them by mail.
Although the tax agency has greatly reduced a massive pandemic-induced backlog of paper returns, it still had some 3.7 million unprocessed returns as of Dec. 2, more than three times its stated goal of shrinking the backlog to pre-pandemic levels. It is introducing new technology to more accurately scan millions of paper returns into digital documents that can be processed as if they were filed electronically, Adeyemo said.
The improvements come as the Treasury and IRS are preparing to unveil a 10-year spending plan for the $80 billion in IRS funding, six months after the IRA was enacted.
"The resources provided by the IRA will continue to support a years-long transformation of the agency," Adeyemo said. "In just five months since the IRA’s passage, we've made meaningful progress to deliver the service American taxpayers deserve."
But the bulk of the funding is earmarked to improve tax compliance and enforcement to shrink the tax gap - the difference between taxes owed and those paid - which the IRS has estimated could exceed $1 trillion annually because of evasion. Democrats passed the funding to reverse a more than decade-long slide in IRS funding that has reduced its staffing and audit levels.
Some Republicans, emboldened by their party's new control of the House of Representatives this year, are looking to curtail the IRS funding, which they claim will result in the hiring of an "army" of 87,000 new "agents" to harass middle-class taxpayers and small businesses.
The bulk of the new hires will replace retiring employees and increase customer service and information technology staffing, but the claims are perpetuated on social media and in statements to the media. A recent report by the Treasury Inspector General for Tax Administration said that the IRS is looking to hire about 3,000 additional revenue agents in coming years. (Reporting by David Lawder. Editing by Gerry Doyle)