TL/DR –
The US Internal Revenue Service (IRS) is using its nearly $60bn Inflation Reduction Act funds to rebuild its workforce and modernize IT systems. The agency aims to hire around 20,000 employees by the end of 2024 and is focusing on increasing its enforcement ranks. The IRS also expects to improve its capacity by introducing long-overdue tech upgrades and by updating its Individual Master File for individual tax account data.
IRS Uses Modernization Funds for Workforce Rebuilding and IT System Upgrades
The Internal Revenue Service (IRS) is utilizing its multi-billion-dollar modernization fund to restore employee training and replace aging IT systems. With approximately $60 billion from the Inflation Reduction Act at its disposal, the IRS is concentrating on improving its services to taxpayers through workforce rebuilding and IT modernization.
In a keynote speech at the Association for Federal Enterprise Risk Management’s (AFERM) annual summit, IRS Commissioner Danny Werfel stated that the Inflation Reduction Act funds are generating a promising return on investment. He emphasized the importance of smart rebuilding and improving taxpayer services in the short term.
By the end of fiscal 2024, the IRS plans to hire about 20,000 employees. Besides increasing the total workforce, the IRS is also focusing on strengthening enforcement ranks.
In September, the IRS announced plans to expedite the hiring of more than 3,700 internal revenue agents who will help ensure tax compliance.
Although the IRS is close to reaching 90,000 full-time employees for the first time in over a decade, the agency faces challenges in recruitment, partly due to negative perceptions of federal employment.
Werfel also mentioned that the IRS is using Inflation Reduction Act funds to upgrade technology and reset its training program. He believes an “employee-centric view of the IRS” will further strengthen the organization.
Despite budget cuts from the Inflation Reduction Act, the IRS is determined to deliver unassailable results, such as making tax services more accessible, addressing tax evasion by wealthy individuals and large corporations, and countering tax scams.
Werfel disclosed the agency’s plan to test a long-awaited update to the Individual Master File (IMF) in 2024. The modernized IMF aims to give taxpayers a “fully digital experience” and provide a safe web environment for individual tax account data, akin to online banking.
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