The Internal Revenue Service (IRS) is looking to boost its workforce to more than 100,000 employees over the coming years, according to IRS Commissioner Danny Werfel.
Back in 2013, the IRS had nearly 87,000 full-time equivalent positions. The workforce then shrunk to just over 73,500 by 2019 following several years of budget cuts. From 2020, the numbers picked up, with the workforce totaling 79,070 by 2022.
A potential partial shutdown of the U.S. government is looming on Friday. If lawmakers fail to pass the $1.2 trillion bill—the bill passed in the House and is now with the Senate—it will trigger a partial shutdown by federal agencies, furloughing several workers in the process. Mr. Werfel said that the IRS will “work within the law to keep as much open as we can, but we can’t keep everything open.”
Last year, the tax agency projected to have more than 105,000 employees in the workforce by 2025. A significant portion of employee additions will be made in the agency’s enforcement section, adding over 12,600 new workers, according to Bloomberg.
While admitting that some additional enforcement may be necessary at the agency, Senator Thune noted that the heavy focus on ramping up hiring in the section seemed disproportionate.
Meanwhile, Melanie Krause, the IRS’s chief data and analytics officer, told the Government Executive news outlet in October that the agency was aiming to hire tax professionals who have knowledge of complex matters. She noted that adding such employees would boost tax collection outcomes.
IRS Funding
Even though IRA funding has been cut by $20 billion, the agency intends to continue with its technology investments, the IRS commissioner said.Mr. Werfel pointed out that there won’t be enough funding in IRS annual operating budget to add in more employees, update technology, and go after complicated audits. Without adding more funds, “then at some point, we’re going to hit a cliff and we’re going to have to lose some of that capacity,” he said.
“For every $100 million taken from the IRS, the deficit grows by $600 million over 10 years,” he said.
A report from the Government Accountability Office (GAO) published last month said that IRA funding for the IRS would generate “substantial revenues” for the government. The Treasury estimates revenues to grow by $561 billion by 2034 due to the IRA funding.
Ways and Means Committee Chair Jason Smith (R-Mo.) dismissed such projections, terming them “fantasyland claims.” He asked the IRS to focus its time and resources on “improving its customer service for its existing duties.”
In his 2025 budget proposal, President Joe Biden has sought an additional $104 billion in funding for the IRS.
Last year, Rep. Earl L. Carter (R-Ga.) introduced the Fair Tax Act, seeking to replace the existing tax code of the country with a national consumption tax.
“This bill will eliminate the need for the department [IRS] entirely by simplifying the tax code with provisions that work for the American people and encourage growth and innovation. Armed, unelected bureaucrats should not have more power over your paycheck than you do,” he said at the time.
