Treasury Secretary Outlines Plan for IRS Upgrades

September 15, 2022

At a recent visit to a new IRS facility, U.S. Treasury Secretary Janet Yellen spoke on the Biden administration's plans for improving IRS services.

In her remarks, Yellen said that the $80 billion in new IRS funding allocated by the recently passed Inflation Reduction Act will allow the agency to upgrade its technology, taxpayer services and enforcement, which will focus on top earners and corporations.

Yellen stated the IRS will increase audits of top earners with the goal of reducing the amount of unpaid taxes. Citing a May 2021 Treasury report, she shared that in 2019, the top 1% of earners were estimated to owe over a fifth of unpaid taxes. The tax gap has grown in large part due to an increasing share of income falling under the classification of "complicated partnerships," from less than 5% of total income in 1990 to over a third today, Yellen said.

Regarding the upcoming filing season, Yellen summarized the following goals for the IRS:

  • Fully staff every IRS Tax Assistance Center and raise the number of taxpayers served in person to 2.7 million
  • Hire 5,000 customer service representatives and raise the proportion of callers reaching an employee to 85% from 10-15%, while reducing average wait times to less than 15 minutes
  • Automate the scanning of millions of individual paper returns
  • Allow taxpayers to receive and respond to notices online

Additionally, Yellen said the IRS will be consulting with customer service experts from the private sector for guidance in the further development of the agency’s modernization efforts.