Faced with budget cuts, a reduced workforce and aging computer systems, IRS Commissioner Charles Rettig has outlined his strategy for leading the agency in an all-hands email to employees.
On Monday, following a swearing-in ceremony with Treasury Secretary Steve Mnuchin, Rettig told agency employees that the IRS needs to step up its efforts to implement the tax reform law President Donald Trump signed last year.
“I know the service has many challenges; I’ve seen them firsthand through the years and I know those are sources of frustration for taxpayers and for you as IRS employees,” Rettig wrote in the email obtained by Federal News Radio. “I also know we must continue rebuilding trust with taxpayers while implementing the once-in-a-generation tax reform bill passed by Congress in December.”
Rettig also stressed the need for IRS to modernize its IT infrastructure.
Honored to swear in Chuck Rettig as the 49th Commissioner of the IRS. Chuck’s commitment to fairness and taxpayer service will make a tremendous impact in the lives of millions of Americans. @IRSnewspic.twitter.com/bM9eNh7hDU
Steven Miller, a former acting IRS commissioner under the Obama administration, told Federal News Radio that legacy IT stands out as the agency’s number-one risk. Years of budget cuts, he added, have only exacerbated the problem.
“Some of it is visible to people, and some of it isn’t. If you look at the IRS, you know that they are doing fewer examinations. What you don’t know is what the cuts have done to the information systems. That’s going to be a fascinating sort of challenge, in terms of getting themselves up and running for the coming filing season,” Miller said. “You don’t know just how cut to the bone they are.”
Due to the change in law, the IRS expects it will have to update 140 computer systems and more than 450 tax forms by next year’s filing season.
“Because of the level of change from last year’s tax bill, there’s got to be an amazing amount of work to be done,” Miller said. “It’s impossible to succeed as a commissioner if you fail at a filing season, it’s as simple as that.”
Tony Reardon, president of the National Treasury Employees Union, agreed that diminished resources have increased the difficulty of implementing the new tax law.
“Due to the lack of funding and insufficient staffing levels — and really, a crushing workload — there was already a tremendous strain on front-line employees,” Reardon said. “Add to that the outdated technology, the tax law changes and the need to deliver a successful filing season, and I really believe you have a serious set of challenges confronting the agency.”
Since 2010, Congress has cut the IRS budget by nearly $1 billion, and more than 17,000 employees.
While Republican members of Congress approve of giving the IRS support it needs to carry out the new tax law, Miller said Rettig will need to make inroads with lawmakers to ensure the agency continues to get the funding it needs.
“There’s no surprise that with the congressional climate in the last couple of years that the morale at the Internal Revenue Service and the budget of the service has suffered,” Miller said. “He’s going to have to work on those. Part of that is going to have to be rebuilding some relationships with the Congress as well.”
Rettig will also help the IRS oversee its five-year strategy to broaden the range of services it offers online and enhance the IRS.gov interface to make it more user-friendly.
“The IRS must continue to balance service to the taxpayer community with an appropriate degree of enforcement of our nation’s tax laws,” Rettig wrote. “Overall, the integrity of the nation’s tax system will be strengthened through enhanced taxpayer services as well as enhanced enforcement activities — to be successful, we need both.”
However, NTEU reports a sharp decline in IRS employees tasked with meeting both of those missions.
Reardon said that in 2010, the agency had more than 21,000 customer service representatives, but in 2017, that number shrank to about 9,200 employees.
“Clearly, the impact, then, is there aren’t enough customer service representatives to go around and effectively respond to caller’s questions,” he said.
In 2007, the agency had more than 20,000 revenue officers and agents, which brought in nearly $57 billion. However, Reardon said that enforcement revenue decreased by more than $2 billion in 2017, when it had an enforcement staff of less than 13,000.
Rettig also urged employees to provide “high-quality, personalized service” to taxpayers, but Reardon said the closure of 30 Taxpayer Assistance Centers (TACs) in the last seven years has limited the public’s ability to get face-to-face tax help.
“That makes it that much more difficult to help provide service to the taxpaying public,” Reardon said.
TIGTA reports that visits to TACs have decreased since the IRS required visitors to schedule appointments in 2016 — from 1.3 million visits in 2017 to 1 million visits in 2018.