Service sector

IRS to hire 5,000 new workers to improve service

The Internal Revenue Service is trying to up its game. The agency is receiving $80 billion in funding through the Cut Inflation Act, which it will use to upgrade technology, improve l enforcement and hire more staff.

On Thursday, Treasury Secretary Janet Yellen announced that the IRS will hire 5,000 new customer service representatives and fully staff tax assistance centers across the country by next year.

The new hires are just one of a series of initiatives, according to Yellen, aimed at improving the agency’s performance and customer service.

The IRS budget has been shrinking in real terms over the past decade. Its workforce is aging and it has had to implement new tax credits for health care and children, said Elaine Maag of the Urban-Brookings Center for Tax Policy.

“So you have an agency that’s already operating on a shoestring and has been asked to do more,” she said. “At this point, I’d say they’re pretty ragged.”

Last year, the agency answered only about 1 in 10 taxpayer calls and the average wait time was 30 minutes.

But hiring customer service workers, auditors and junior tax lawyers will be a challenge, Marc Goldwein told the Committee for a Responsible Federal Budget.

“It’s a very tight job market, and their salaries won’t necessarily be competitive with those in the private sector.”

And Maag of the Tax Policy Center said stigma and misinformation don’t help.

“The more people talk badly about the IRS, threatening the IRS — it makes it harder to hire,” she said.

If the IRS could fix how its customer service works, it could improve the agency’s reputation, said Alex Muresianu of the Tax Foundation.

“Having an agency that is very responsive to taxpayer concerns, I think, would alleviate frustration with the IRS,” Muresianu said.

And, he said, it could increase voluntary tax compliance among middle-income Americans. This would allow the IRS to aim its big audit and collection guns at high income tax evaders – where the real money is.

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