is this how the irs dies?

irs, losing staff it can’t replace, slides further into chaos and oblivion.

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internal revenue service employees are resigning and retiring in droves, leaving the agency increasingly powerless to fulfill its mandate as the nation’s tax collector.

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like every other problem the irs has, inadequate staffing is fundamentally caused by inadequate funding. as the irs budget declined by 20 percent between 2010 and 2021, staffing declined by about the same percentage, dropping from 94,711 full-time positions to just 75,773. meanwhile, of course, the number of taxpayers increased.

and now retirees are lining up at the exit door. some 16,928 employees are eligible to retire this year, and 5,590 are expected to do so. next year the number of eligibles will increase to almost 20,000.

with all the problems generated by the staffing gap, the tax gap—the difference between what is owed and what is paid—totaled a good $580 billion in 2019, up from $440 billion in 2013. if that trend continues, the treasury dept. says, the tax gap will reach $7 trillion by 2029.

yes, $7 trillion.

the internal revenue service is “severely understaffed and unable to adequately recruit, hire, and train much-needed new employees,” according to national tax advocate erin m. collins’s annual report to congress.

understaffing, sluggish recruitment and inadequate training send self-perpetuating problems reverberating through the federal agency that allows america to keep going.

• inadequate staff results in inadequate training.
• inadequate staff and inadequate training result in poor service and more errors.
• poor service and more errors result in problems growing into compound problems.
• problems erode confidence in the tax system.
• lack of confidence leads to frustration and ill will.
• frustration and ill will lead to non-compliance.
• noncompliance leads to a wider tax gap.

it isn’t [just] the money

congress is reluctantly acknowledging that the irs needs better funding, though there is disagreement over whether it needs enough funding or just half of enough.

but in either case, the process, as opposed to the funding, of recruiting, hiring, onboarding and training irs agents is observably sluggish and bureaucratic.

irs hiring is centralized under the human capital office, which itself is underfunded and understaffed. at its current capacity, the report says, hco cannot possibly handle the expected hiring and training requests of the next ten years.

actually, the irs has streamlined the hiring process quite a bit. in 2019, the time-to-hire averaged about 120 days. in 2021, it was down to 88 days, pretty close to the goal of 80 days. still, that’s 80 days when the individual may just decide to take a job somewhere else.

irs university

once new employees are on board, the long process of training begins. overall, the irs delivers between 3.6 and 4.6 million hours of training each year. that’s more than some universities.

a clerical tax examiner needs only 64 hours of training, but most professional staff need several hundred hours to learn their jobs. a wage & investment customer service representative needs 1,500 hours. that’s almost nine months at 40 hours a week.

a revenue agent for employee plans needs 1,648 hours of training. a new hire for large business and international taxpayers needs 2,098. an excise tax agent needs 2,740. a special agent in criminal investigation needs 3,904.

in other words, even if the irs were to hire 5,000 new agents today, they wouldn’t be on the job until the busy season next year, and some wouldn’t be online until 2024.

the nta has made several recommendations for the irs to improve its training strategy and for the hco to clean up its bureaucracy and eliminate some redundancies.

says the irs:

“our vision in this area…is a corporate university model, which we call the “irs university” (irsu). the irsu will empower our workforce by equipping employees with the skills and tools needed to advance their careers, provide high-quality service to taxpayers, and ultimately enhance the taxpayer experience. the irsu will be a modern and innovative learning organization focused on leveraging technology, promoting continuous learning, and providing developmental opportunities supporting our employees’ career goals. we will use an industry-leading model to obtain relevant feedback from employees, taxpayers, and key stakeholders and drive continuous improvement in irs training and development activities.”

posted on january 27, 2022