Saturday December 9, 2023
Secretary Yellen Highlights IRS Improvement Efforts
On August 2, 2023, Treasury Secretary Janet Yellen gave a public address to Internal Revenue Service (IRS) employees in Maryland. Secretary Yellen highlighted many of the IRS customer service improvement efforts. With additional funding from the Inflation Reduction Act, the IRS has hired 5,000 new staff and engaged in many efforts to improve their assistance to taxpayers.
1. Better Customer Service — The IRS had a dismal record in the 2022 filing season, with only a 10% to 15% level of service. It answered two calls out of every 10 from taxpayers. Secretary Yellen set a goal in 2023 goal to improve from 15% to 85% service level. She was delighted to report that the 5,000 new staff were able to increase the service level to 87% this year. The IRS answered 3 million more taxpayer phone calls compared to the prior year. In addition, the taxpayer wait time to talk to an IRS representative was reduced from 28 minutes to 3 minutes.
2. In-Person Assistance —35 new Taxpayer Assistance Centers facilitated a major increase for in-person services. The IRS served 140,000 more individuals this year than the prior year. The IRS also set up temporary assistance centers in several rural areas. These efforts enabled a substantial increase in the number of in-person visits.
3. Paper Returns — The IRS has struggled to process paper returns. There is a major program underway to scan millions of paper returns. This is also related to the efforts for taxpayer improvement of online contacts with the IRS. The combination of scanning paper returns and notifications with the option for electronic response has substantially increased the level of taxpayer service. The IRS also reports it has fully cleared the 2022 backlog of paper tax returns.
4. Paperless Processing — The IRS has moved into the modern era with an effort to allow all correspondence, non-tax forms and notice responses to be completed online. While taxpayers may still submit paper documents, the IRS has set a goal for 2025 to transition to nearly all digital documents. Currently, the IRS receives 200 million paper documents each year. The goal is to encourage all taxpayers to move to digital formats. The digital process provides faster refunds, produces fewer errors in processing and facilitates a more responsive customer service experience.
5. Fair Enforcement — America has a substantial tax gap between the taxes owed and those paid. The tax gap is estimated to be $700 billion per year. Honest taxpayers who are paying their correct amount are upset by the fact that "wealthy and large corporate taxpayers" have not paid their full share of taxes. The IRS is now hiring staff to increase audits for corporations, partnerships and high-income taxpayers. Secretary Yellen notes the fair enforcement efforts for affluent taxpayers may reduce deficits by hundreds of billions of dollars over the next decade.
Secretary Yellen concluded by stating the IRS improvements and other milestones are the result of dedicated employees who can exceed expectations if given sufficient tools and resources.
Published August 4, 2023