When tax season starts, the US Treasury emphasizes IRS customer service over audits

By David Lawder

WASHINGTON (Reuters) – The U.S. Internal Revenue Service will start the 2023 income tax filing season on Monday armed with 5,000 new customer service representatives to reduce 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 US Treasury officials.

Such efforts take precedence over increasing the number of revisions as congressional Republicans prepare to demand a cut in new funding for President Joe Biden’s signature climate, health and tax bill, the Inflation Reduction Act (IRA).

US Deputy Treasury Secretary Wally Adeyemo told reporters that the 5,000 new customer service hires will be trained by February 20, when call volume from taxpayers typically peaks.

He said the tax agency’s goal was to halve the average wait time for callers to 15 minutes and that 85% of callers reached 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 receiving in-person help with their taxes, as well as creating new online portals that allow taxpayers to upload documents instead of sending them by mail.

Although the IRS has greatly reduced a massive pandemic-induced backlog of paper returns, it still had about 3.7 million unprocessed returns per year. Dec. 2, more than three times its stated goal of reducing the backlog to pre-pandemic levels. It introduces 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 Department and the IRS prepare to unveil a 10-year spending plan for the $80 billion in IRS funding, six months after the IRA was enacted.

“The resources of the IRA will continue to support a year-long transformation of the agency,” Adeyemo said. “In just five months since the IRA’s transition, we’ve made significant strides to deliver the service American taxpayers deserve.”

But the bulk of the funding is earmarked for improving tax compliance and enforcement to reduce the tax gap — the difference between taxes owed and paid — which the IRS has estimated could exceed $1 trillion annually due to evasion. Democrats passed the funding to reverse a more than decade-long decline 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 seeking to limit 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 being maintained on social media and in statements to the media. A recent report by the Treasury Inspector General for Tax Administration said the IRS is looking to hire about 3,000 additional revenue agents in the coming years.

(Reporting by David Lawder. Editing by Gerry Doyle)

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