Treasury Secretary Janet Yellen said Thursday that the IRS will use an $80 billion boost to answer more taxpayers’ phone calls and “make sure that everyone pays their fair share.”
Touring an IRS facility with 7,500 employees in New Carrollton, Maryland, Ms. Yellen said ramping up hiring at the tax-collection agency will help to correct years of “unacceptable” tax avoidance by wealthier taxpayers and corporations.
“High earners are paying far less than they owe,” Ms. Yellen said. “This means that working families are
shouldering a disproportionate burden of investing in our roads, schools, military and more. This inequity is unacceptable.”
She said enforcing tax laws better for taxpayers who earn more than $400,000 annually is “a matter of fundamental fairness.”
“It is important for honest taxpayers to know that, when they file their taxes accurately with the IRS, other people are doing the same,” she said.
The so-called Inflation Reduction Act signed recently by President Biden includes the new funding for the IRS, which administration officials say will boost revenues to the Treasury by as much as $400 billion over the next decade.
But conservatives such as Sen. Ted Cruz, Texas Republican, say the agency will hire 87,000 new auditors to “descend like locusts” on taxpayers.
Ms. Yellen said honest taxpayers won’t be affected by the changes.
“I’ve directed that enforcement resources will not be used to raise audit rates for households making under $400,000 a year relative to historical levels,” she said. “In fact, we expect audit rates for honest taxpayers to decline, once the IRS has the right technological infrastructure in place.”
Ms. Yellen said the agency will use some of the new funding to deliver better customer service after years of taxpayers being unable to reach a human being on the phone. Due to “chronic understaffing and high call volume,” she said, the IRS has been answering fewer than two out of 10 phone calls.
She said the IRS will hire 5,000 new customer service representatives by next tax filing season to answer five times as many calls.
“In this coming filing season, we are committing the IRS to an 85% level of service,” she said. “We will also cut phone wait times in half — from an average wait of nearly 30 minutes during the 2022 filing season to less than 15 minutes.”
Millions of taxpayers are still waiting for last year’s tax returns to be processed and to receive refunds. Ms. Yellen said taxpayers “can expect to feel real differences during the next filing season.”