United States Treasury Secretary Janet Yellen has recently given a six-month timeline to the IRS to assemble a detailed plan on how they will deploy the $80 billion in funding they will be receiving over the next 10 years. In the letter written by Yellen, the treasury secretary said that “The work will require an all-hands-on-deck approach from the dedicated employees of the IRS.” This memo addressed to Rettig came just one day after President Biden signed the legislation that included the $80 billion in funding to the IRS.
Most Money IRS has Seen In Decades
The money the IRS will be receiving is the most funding the agency has gotten in several decades. Yellen hopes that a plan made by the IRS will provide additional guidance on how this new funding will be allocated throughout the Internal Revenue Service.
Putting the People at Ease
There are also hopes that this plan will keep the IRS immune from political disagreements. Politicians on both sides of the aisle are currently confused as to what the IRS will use this money for. After the recent hirings of roughly 87,000 new IRS auditing agents, some on capitol hill are in fear that these new agents will cause a lot more audits to be directed toward middle-class taxpayers.
IRS Modernization
A big chunk of Yellen’s letter to Rettig was calling for the IRS to begin “modernizing.” This requires a total overhaul of their information technology system which is “decades out of date” according to Yellen. Employee training will also play a key role in the modernization of the IRS. Yellen has called for intensive training of IRS employees so that they will be able to identify even the most complex tax schemes.
Addressing the Backlog
Yellen also didn’t fail to address the IRS’ humongous backlog. She called for the backlog of returns to be cleared and the boosting of IRS services to the taxpayers, making them more readily available for assistance when the taxpayer needs it. This would be a great win for the taxpayers as many people’s returns have been backlogged for several years, and the phone lines of IRS offices were out of control during the last few tax seasons. The inability of the IRS to answer key questions for the taxpayer caused a lot of frustrations to be had by accountants and taxpayers alike.
Period of Transition
It is projected that the next several months will be a transition period for the Internal Revenue Service. Commissioner Rettig’s term is coming to an end in November, and he was previously appointed by the Trump administration on September 12th, 2018. The current presidential administration has yet to announce who the next commissioner will be, making it likely that the IRS will be led by an interim commissioner for at least a few months.
Wrap Up
Yellen’s address to the IRS can be seen as good news as Americans will gain a better understanding of how the additional funding will be utilized. This being said, it is likely that a lot of time will pass before these changes are put into place. With notorious disorganization along with a lack of customer service recently seen from the IRS, there are high hopes that things may finally be looking up for the next tax season.