Treasury Secretary Janet Yellen talking at a information convention on July 14.
Made Nagi | Reuters
The memo additionally describes how the almost $80 billion in funding offers a “monumental alternative” to rework the IRS, outlining 4 priorities.
1. Clear the backlog
With hundreds of thousands of unprocessed tax returns, Yellen goals to “absolutely resolve” the company’s backlog, the memo outlined. Rettig in March pledged to clear the pileup by the end of 2022, and as of Aug. 5, there have been 9.7 million unprocessed particular person 2021 tax returns, according to the IRS.
2. Enhance customer support
Yellen additionally pushed for making “important enhancements” to taxpayer service. Whereas the company solely answered 11% of cellphone calls throughout fiscal 2021, the Taxpayer Advocate reported, the IRS has recently leveraged technology to make enhancements.
3. Overhaul the company’s expertise methods
One other precedence is an “overhaul” of the company’s expertise methods, which the memo describes as “a long time old-fashioned.”
“The 2 IRS methods containing the official data of particular person and enterprise taxpayer accounts are the oldest main expertise methods within the federal authorities,” Nationwide Taxpayer Advocate Erin Collins wrote in her January report to Congress.
4. Rent IRS staff to switch retiring employees
Yellen additionally prioritized hiring IRS staff, with the objective of changing the 50,000 IRS employees anticipated to retire over the following 5 years.
Throughout fiscal 2021, the IRS workforce consisted of 78,661 full-time staff, a lower of 12.9% since 2012, according to the agency.
“This operational plan is essential to making sure the general public and Congress are capable of maintain the company accountable because it pursues wanted enhancements,” Yellen added.
The $80 billion of IRS funding has been controversial. Whereas critics have argued the brand new assets could set off elevated audits past rich taxpayers, Yellen responded to those claims in a letter to Rettig on Aug. 10.
“Particularly, I direct that any further assets — together with any new personnel or auditors which can be employed — shall not be used to extend the share of small enterprise or households beneath the $400,000 threshold which can be audited relative to historic ranges,” she wrote.