By Eli M. Rosenberg —
NBC News
Inside the Internal Revenue Service (IRS), which is about to receive a major injection of funds that Democrats and agency workers say is badly needed to increase efficiency and revenue, employees describe that they carry their own office supplies and work long overtime in understaffed divisions.
But abroad, in Washington and online, an outcry is growing among those who see the IRS as a powerful government entity hostile to taxpayers.
Some of those critics are conservatives who oppose stepped-up law enforcement.
Others are far-right extremists who spread misinformation and call on citizens to prepare for violence.
The sweeping climate and spending bill that House Democrats passed on Friday, sending it to President Joe Biden's desk for his signature, includes
$80 billion for the IRS spread across of a decade
.
In interviews, agency employees say the money can help resolve bottlenecks, stemming in part from staffing problems, that can add complications for taxpayers and employees alike.
[The IRS amasses more than 21 million raw tax returns, report warns. This affects refunds]
Will Kohler, who works as a tax examiner at the IRS office in Cincinnati, said a shortage of supplies means he sometimes has to use his own pens and clips.
He has even brought paper for the photocopier throughout his 10 years there, which he says is part of working at the chronically paper-heavy and technologically outdated agency.
The reflection of a pedestrian passing in front of an Internal Revenue Service (IRS) office building in the East Harlem neighborhood of New York on Saturday, June 24, 2017. Timothy Fadek/Bloomberg via Getty Images
Some of the challenges Kohler and his colleagues recount are familiar to workers across the economy, who in recent years have been asked by employers, beset by labor shortages and scarce resources, to do more with less.
"It's a factory," Kohler said, "and when there hasn't been money and they haven't been able to hire good people, it's been bad."
The IRS, which is overseen by the Treasury Department, has cut about 13% of its staff since 2012. With some 79,000 current employees,
its workforce has fallen back to levels close to 1974,
the agency's director told The Associated Press. Congress earlier this year, despite rising revenues and 14% more taxpayers filing returns in the last 10 years.
In the same period, the
IRS budget has fallen from $14.3 billion to $13.7 billion
in fiscal year 2021, or about 15% if adjusted for inflation, according to the agency.
Trump invoked the Fifth Amendment more than 400 times in the interrogation before the New York District Attorney's Office
Aug. 11, 202202:28
Staffing in law enforcement has fallen further, by 30% since 2010, even as the tax code—and the maneuvers by businesses and individuals to circumvent it—have grown more complex.
Natasha Sarin, a tax policy adviser at the Treasury Department, acknowledged that the IRS has been "a difficult place to work in the last decade due to budget cuts and lack of funding," which, according to her, has affected the worker efficiency.
Echoing Kohler's experience, he said that "people have had to buy staplers, buy red pens, buy Band-Aids that come from having to deal with so much paper processing."
The proposed funding, which
would allow the IRS to hire about 87,000 people over the next decade,
should help, the employees said.
That figure includes the replacement of some 52,000 employees who are expected to leave or retire in the coming years as the workforce has aged amid budget cuts.
This could bring the total workforce to more than 110,000 people, a level not seen since the mid-1990s.
For their part, returns have grown, going from 118 million individuals in 1995 to 168 million last year.
The IRS will expand refunds for gas expenses to certain people due to high prices
June 16, 202200:55
The IRS says it will use the resources to focus more on high-net-worth individuals and businesses, and the director, Charles P. Rettig, appointed by former President Donald Trump, recently told Congress the app would heed a Treasury directive. not to increase audit fees for households earning less than $400,000 a year.
However, the proposal has drawn pushback from some skeptics who argue it will cause more headaches for everyday taxpayers.
Joe Bishop-Henchman, a policy analyst at the National Taxpayers Union Foundation, said the group, which advocates for tax cuts, was concerned that enforcement resources were directed at middle-class households and small businesses. due to the high costs and legal challenges of regulating wealthy households and corporations.
"We've seen this cycle of the IRS claiming poverty and how they just don't have enough staff and they don't have enough resources," he said.
“The rich have lawyers.
The rich fight back, so they go after people who don't fight back," he said, adding that the middle class and small businesses "have a lot of the money" that the IRS wants to collect, so the agency "becomes crazy".
Some conservative officials and commentators have sought to cast funding fears in more extreme terms, particularly in the days following the FBI's search of Trump's Mar-a-Lago residence this week, with some falsely claiming it could lead to widespread state violence.
Teens making more than $400 a year must report their income and pay taxes
June 15, 202201:54
Fox News personality Brian Kilmeade described a beefed-up IRS as "Joe Biden's new army" and told viewers that armed agents could "hunt down and kill middle-class taxpayers who don't pay enough."
Speaking against the bill in Congress on Friday, Rep. Lauren Boebert, R-Colorado, said IRS officers with guns would be "committing armed robbery to Americans."
In recent days, far-right figures and militant groups on social media like TikTok have cited anticipated IRS funding in doomsday warnings about civil war and federal plans to seize citizens' guns.
Some of the protests have focused on job openings for the IRS criminal division, which performs investigative work that is not part of routine tax processing or auditing.
Individual audit rates fell steadily between 2010 and 2019 across all income brackets, with the median rate at the end of that period — 0.25% of all filers — less than a third of the level at the beginning of it, according to a recent report from the Government Accountability Office.
However, audit fees have fallen more steeply for people earning more than $200,000 a year, a change the IRS attributes to a lack of resources.
If you request an extension to file your taxes you still "have to pay" to avoid penalties
April 18, 202201:36
Audits of wealthy filers and large companies are labor intensive, but can pay for themselves many times over.
An employee of the division focused on large and international companies said he opened eight audits in the last two years, closing three of them.
In two of them there were no changes in taxes, while in the third the Government recovered about a million dollars.
On average, every dollar spent on the IRS application has returned between $5 and $9 in revenue in recent years, according to the nonpartisan Congressional Budget Office.
Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, which supports efforts to recapture more tax revenue from big businesses and high-income individuals, expressed optimism about the planned funding.
“My hope is that this begins to restore Americans' confidence that our tax system is fairer than it was — that businesses are not allowed to not pay taxes,” she said.
Meanwhile, IRS staffing shortages may make it difficult for existing employees to work.
Lorie Y. McCann, a program analyst in Chicago and president of the local chapter of the Treasury Employees National Union, said that more than 90% of the complaints she hears from her colleagues are related to understaffing.
Have you already filed your 2021 taxes?
An expert solves frequently asked questions by taxpayers
April 18, 202202:49
“There isn't a single division in the agency that isn't understaffing right now
,” said McCann, who has been with the IRS for 31 years.
"When your colleagues have retired or resigned, the work does not disappear."
Steven Eldridge, 30, a technician in Austin who has worked at the IRS for two years, said his supervisors have been offering workers up to 76 hours of overtime every two weeks to help with arrears.
In fact, he has two jobs: His main responsibility is to help resolve errors on tax returns, an often cumbersome process of reconciling paper forms with the agency's antiquated computer system.
But he also works as an “OJI” (on-the-job instructor), training and helping new hires get up to speed with the agency's programs.
Training needs now occupy the majority of their time as the agency works to fill gaps in layoffs with new hires.
So Eldridge has been working many weeks—65 hours last week, 70 hours this week—to keep up.
Experts are "greatly concerned" about more violence due to Republican rhetoric after the search of Trump
Aug. 12, 202202:34
Like many employers facing a tight job market, the IRS has been struggling to attract and retain new hires.
The average agent earns about $62,000 a year, according to job site ZipRecruiter, but the most popular role — phone representatives the IRS says it's hungry to hire as call service has suffered — earns less than that on average.
Pay for phone representatives ranges from $40,000 to $55,000 a year, with some variation, in expensive cities like New York, Oakland, Washington and Denver, according to federal data.
A Kansas City human resources specialist who has been recruiting for phone lines said turnover remains a major problem, largely because pay has lagged behind rising salaries in the private sector.
"It's not so much hiring that's the problem," he said, "but retaining the people we have."
