Amid Budget Cut Threats, I.R.S. Commissioner Strives to Demonstrate Progress
TL/DR –
Daniel Werfel, the Internal Revenue Service (IRS) commissioner, has overseen significant improvements within the IRS, including clearing a backlog of tax filings, decreasing wait times, and creating a system for free federal returns for eligible taxpayers. However, Republicans have criticized Werfel and the IRS, accusing the agency of being more intrusive and engaging in unlawful behavior. There are also concerns over delays in implementing a new tax policy related to digital wallets, data security breaches, and debates over the agency’s funding, which Werfel defends as necessary for the IRS to continue its modernization efforts and enforcement capacities.
Daniel Werfel: Building Trust and Modernizing the IRS
Daniel Werfel, the Internal Revenue Service (IRS) commissioner, pledged during his Senate confirmation to enhance public trust and modernize the agency using the Congress-allocated $80 billion. A year on, he has made significant strides.
Under his leadership, IRS has cleared thousands of tax filings backlog and launched a system that lets qualified taxpayers submit federal returns for free. However, these efforts are viewed by Republicans as making the IRS more intrusive and lawless.
This criticism is likely to dominate the upcoming House Ways and Means Committee meeting on Thursday, where Werfel will defend his agency’s budget.
Improving Tax Operations
Werfel, in an interview, emphasized the importance of well-funded IRS to improve tax operations for taxpayers’ benefit. This, he stated, would be his primary argument against any proposed significant budget cuts.
The Inflation Reduction Act of 2022 allocated $80 billion to the IRS to upgrade its enforcement abilities and technology systems. However, Republicans’ demands resulted in $20 billion reduction of these funds.
Werfel has been proactive, working to make the IRS more accessible by improving customer service centers and enabling taxpayers to reach the agency without waiting for hours on the telephone. Part of IRS’ modernizing efforts involved initiatives to crack down on wealthy tax evaders and the introduction of artificial intelligence technology in audits.
Addressing Security Concerns
Despite these improvements, Republicans argue that lingering issues overshadow any progress. They maintain that the IRS has a history of targeting conservatives and favoring Democrats.
Recent security breaches have intensified these concerns. Werfel is likely to face inquiries about his decision to delay a contentious tax policy that requires digital wallets and e-commerce platforms users to report small transactions. Republicans despise this policy but argue that the delay is against the law.
The Importance of a well-funded IRS
The Biden administration argues that attacks on the IRS seek to weaken the agency to favor wealthy taxpayers who evade paying their dues. With a nearly $700 billion “tax gap” of uncollected revenue each year, stronger enforcement is necessary.
The constant funding negotiations hinder Werfel’s ability to execute the ambitious multiyear operating plan the agency produced. Despite criticism, he believes that improving staff morale and maintaining the IRS as an impartial referee is vital for good governance.
—
Read More US Political News