Management

IRS employees ‘outgunned’ in the fight to enforce taxes

There aren’t enough employees or resources at the IRS for the agency to go toe-to-toe with some of the largest businesses and individuals who don’t pay their taxes, according to IRS commissioner Charles Rettig.

That disadvantage is especially true for partnerships — two or more people in business together that share in the annual profits of their work — which have an IRS audit rate of 0.00004 percent, according to Sen. Ron Wyden, D-Ore.

“We are outgunned. The resources outside the service on a particular case, more often than not, far exceed the resources we are able to devote. And out of 4.2 million partnership returns, we cannot touch 4.2 million, when service-wide I have 6,500 field revenue agents, and I need to deploy those as best we can,” said Rettig at a June 8 hearing before the Senate Finance Committee.

“Our employees are proud to do what they’re doing. Give us the resources and we’ll make you proud as well.”

The Biden administration requested significant funding increases for the IRS in 2022, in part to increase the agency’s workforce by 15 percent per year, which would add over 5,000 personnel by 2023.

And according to Rettig, that money will also be crucial for simply replacing the employees that leave government service, as currently a 25 percent replacement rate is seen as a success, causing a notable decline in the agency’s overall workforce.

“When we don’t get funding, we don’t replace the people who retire,” said Rettig. “We have 52,000 people to replace in the next six years.”

And though all parts of the IRS’s work — from auditing to customer service — need more personnel, Rettig said that Congress will also have to grant the agency direct hiring authority for many positions, so that experienced, knowledgeable workers can be recruited to take on the high-value cases that are currently being left by the wayside.

“I cannot go into the private sector and try to recruit mid-level — even new — or senior-level people to come on board, who would be immediately impactful,” said Rettig. “Without direct hiring authority, I cannot keep these people coming onboard for a three, six or nine month period.”

And that staff increase may end up spilling over into other agencies, as the Department of Justice, for example, is responsible for prosecuting the cases of tax fraud or evasion after IRS auditors uncover them.

“If we get a significant increase in staffing and the Department of Justice, specifically the tax division, does not, you should anticipate a bottleneck of us giving cases that they’re unable to handle because of their staffing issues,” said Rettig.

Congress is currently considering President Joe Biden’s budget proposal for all agencies and must pass government funding legislation or a continuing resolution for fiscal year 2022 by the end of September.

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