A day after President Biden signed sweeping climate, health and tax legislation that included $80 billion in funding for the Internal Revenue Service, Treasury Secretary Janet L. Yellen laid out an operational plan to deploy the funds to the Treasury Department. Directed to formulate and overhaul the imprisoned tax collectors.
In a memo to IRS Commissioner Charles P. Rettig, Yellen called for closing the backlog of tax returns, improving taxpayer services, and modernizing outdated technology. , made clear its top priorities, including hiring thousands of new employees.
The new law, known as the Inflation Reduction Act, provides “what the IRS has needed for years: to serve American taxpayers in a way that the IRS deserves and to enforce tax laws on high incomes. It will provide a steady stream of mandatory funding that will allow it to do so, Yellen wrote in a memo seen by The New York Times.
The funds will be used to hire new tax enforcement officers, expand our depleted taxpayer services team (which leaves most customer service calls unanswered), and upgrade outdated technical systems. In 2021 he had a budget of $13.7 billion, and in 10 years he’ll be a good deal at $80 billion.
Yellen has instructed agencies to draft plans within six months and asked her deputy, Wally Adiemo, to work with Retig to develop new initiatives and timelines. The plan needs indicators for various areas of improvement so that Congress can hold government agencies accountable.
Contents of the Inflation Control Law
Contents of the Inflation Control Law
substantive law. The $370 billion climate, tax and healthcare package signed by President Biden on August 16 could have far-reaching environmental and economic impacts. Here are some of the key provisions:
Additional funding for the IRS sparked heated political debate, with Republicans saying the Biden administration plans to hire thousands of law enforcement officers to audit small businesses and the middle class. suggesting. The Treasury Department projects that the agency will hire about 87,000 new employees over the next decade to make up for her expected wave of 50,000 retirements over the next few years. Most of these hires are expected to work in technology and customer service roles.
In her memo, Yellen reiterated that a strengthened IRS would focus on cracking down on wealthy tax evaders and big corporations who have long avoided paying their debts to the federal government. It also promised that middle-class households would not face any more nasty scrutiny and that audit rates would not rise.
“These investments won’t take household incomes below $400,000 a year, or make small businesses more likely to be audited than they were at historical levels,” Yellen wrote. “Instead, they will allow the IRS to work to end the two-tier tax system in which most Americans pay what they owe, but those at the top of the distribution often don’t. “
The IRS has struggled for years amid budget cuts planned by Republicans who have accused the IRS of targeting conservative groups. Since Mr. Biden’s election, Republicans have warned that the agency could be weaponized by Democrats and tried to block it from getting additional funding.
Whether or not Congress will pass additional funding remained unclear until recently, but the Treasury Department spent nearly a year developing plans to upgrade the IRS. Hold a day-long planning meeting and event if the money is approved, and a contingency plan if it is not.
In the memo, Yellen said she stands ready to approve the use of the funds expeditiously so the IRS can improve its services for the filing season that begins next year.
As the Biden administration enacts changes to modernize the IRS, another key priority will be selecting a new commissioner to carry them out.