IRS looks to hire 3,700 auditors to find wealthy tax dodgers
The Internal Revenue Service is looking to hire an additional 3,700 staffers in hopes of rooting out wealthy Americans who are skirting their tax payments.
The federal agency issued a statement on Friday saying that it plans to fill positions at more than 250 locations nationwide.
“This next wave of hiring will help the IRS add key talent like tax accountants to help reverse a decade-long decline of audits for the wealthy as well as complex partnerships and corporations,” IRS Commissioner Danny Werfel said in the press release that was issued on Friday.
The move comes a week after the IRS announced a “sweeping effort to restore fairness to [the] tax system” by “increasing scrutiny on high-income, partnership, corporations, and promoters abusing tax rules on the books.”
“[T]he IRS will intensify work on taxpayers with total positive income above $1 million that have more than $250,000 in recognized tax debt,” the agency said in a statement.
“As part of the effort, the IRS will also ensure audit rates do not increase for those earning less than $400,000 a year as well as adding new fairness safeguards for those claiming the Earned Income Tax Credit,” the agency added.
Last year, President Joe Biden signed into law the Inflation Reduction Act, which added some $80 billion to the IRS budget so that the agency could hire an additional 80,000 auditors and agents.
In April, the agency said it was planning to add 20,000 more agents to its payroll within the next two years using funds from the legislation to bolster tax collection as well as improve customer service.
The tax agency said it will obligate about $8.64 billion of the new funding during the 2023 and 2024 fiscal years, and that 7,239 of the new hires during those years will be enforcement staff.
But a significant portion of these new hires will replace the nearly 12,000 IRS employees expected to retire over the next two years — including more than 4,700 enforcement staff, a Treasury official told Reuters.
The $80 billion in new funding from last year’s climate-focused Inflation Reduction Act is aimed at rebuilding the agency’s audit capabilities and 1960s-era computer technology after a decade of funding cuts mostly by Republican-controlled Congresses.
It also aims to help close the “tax gap” between taxes owed and those paid, estimated by Treasury at some $600 billion a year, by focusing new audits on the wealthiest Americans.
“The IRS is going to hire more data scientists than they ever have for enforcement purposes,” Deputy Treasury Secretary Wally Adeyemo said earlier this year, adding that these would complement more traditional tax attorneys and revenue agents in using new data analytics technology to identify audit targets.
But the nonpartisan Joint Committee on Taxation claims that the plan will actually ramp up targeting of small business owners.
The group estimated that between 78% and 90% of the additional $200 billion that the IRS plans to collect will come from small businesses that generate less than $200,000 annually.