In a recent blog post, we discussed the IRS’s recent windfall of $80 billion via the Inflation Reduction Act to increase staff, upgrade technology, and increase enforcement efforts. Now Republicans on the Senate Finance Committee are calling for details about exactly how that money will be spent.
In a 10-page letter to Charles P. Rettig, Commissioner of the IRS, 14 Republican senators insisted on transparency and accountability around exactly how the IRS will spend the money.
They listed five demands in particular:
Prioritize taxpayer services
The letter points out that in the most recent tax filing season, the IRS answered only 10% of calls from members of the public, that those who were able to get through waited on average 29 minutes, that there was a backlog of 21.3 million unprocessed paper tax returns at the end of May 2022, and that it took the IRS an average of 251 days to process taxpayer responses to proposed adjustments.
The Committee demanded that the IRS reduce telephone waiting time to five minutes, prioritize clearing the backlog of returns and correspondence, and issue refunds within four to six weeks of receiving a qualifying paper tax return.
Guard against partisan targeting
The Committee referenced several incidents in which the IRS was accused of exhibiting bias or partisanship toward political or religious groups and demanded that the IRS take steps to eliminate any bias.
They also demanded that the IRS ensure that it does not target taxpayers based solely on their financial status, and responded to Janet Yellen’s directive to increase audits of taxpayers with annual incomes of over $400,000 by asking the IRS to detail exactly how it intends to determine which taxpayers will be targeted for audits.
Protect taxpayer privacy
In 2021, news outlet ProPublica publicly disclosed leaked information from the IRS to demonstrate how the wealthiest Americans exploit the tax code. The committee criticized the Treasury Department’s inadequate response to the incident, demanded to know what the IRS is doing to prevent other leaks in the future, and called on the IRS to tighten up its internal security.
The committee also referenced a recent report by the Treasury Inspector General critical of the IRS’s cybersecurity program and demanded that the IRS implement comprehensive security controls to protect confidential information from hackers and other external threats.
Stating that, “Modernizing the IRS’s technology infrastructure must be a top priority,” the committee referenced previous technological deficiencies, failures due to outdated equipment, and overspending. The letter points to “a need for vigilance and multiple avenues of oversight,” and requests “refinement and clear articulation of metrics and milestones that independent overseers can objectively use for monitoring any IRS IT.”
Transparency and accountability
The letter expresses concern that the IRS will not voluntarily comply with accountability and transparency standards, and the committee members insist that the IRS provide the government and the public with clear metrics for monitoring improvements and regularly report on its progress.
The letter goes on to as the IRS to supply the Committee with a specific plan to avoid bias and partisanship; an accounting of how resources will be used with estimated ROIs; and what its estimated ROIs are for increased auditing in 12 specific areas.
The committee requested responses to its concerns by October 28, 2022.
The full ramifications of the new IRS funding won’t be known for years, of course, but it seems likely that the Service will be making changes, some of which could directly affect taxpayers. If you have concerns, we urge you to talk to one of our qualified tax specialists.
If you’re interested in working with Tonneson + Co, please reach out to us. We look forward to hearing from you!
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