”We have experienced shutdowns before. We have not experienced shutdown in the middle of filing season, so there’s some uncertainty there,” he said.
Werfel said IRS preparations for the filing season are exempt from a lapse in funding, and that the agency will “carve out elements that will allow us to maintain operations.”
“Of course, we will do everything in our power to minimize the disruptions that a shutdown would have on filing season,” he said. “But as many of us have experienced who’ve been through government shutdowns before, if you’re outside the government looking, it can be very disruptive and very chaotic.”
The National Treasury Employees Union, in a letter sent Wednesday, urged congressional leaders to avoid a government shutdown.
“A government shutdown would be disastrous for the country,” NTEU National President Doreen Greenwald wrote.
Greenwald said a 35-day shutdown in 2019 led to more than 800,000 federal employees not getting two of their paychecks on time, “and denied critical government services to the American people.
Congressional leaders, as part of a tentative spending deal earlier this week, agreed to speed up the timeline for a $20 billion cut to IRS funding in the Inflation Reduction Act.
Congress already agreed to roll back the IRS funding as part of debt ceiling negotiations last year. Under that deal, however, lawmakers planned on eliminating $10 billion in IRS funding this year, and another $10 billion next year.
Werfel said the cuts to Inflation Reduction Act funding will have no immediate impact on IRS modernization plans.
“The concern about the budget would be in the later years. My hope is that as we demonstrate the positive impact that IRA funding is having for all taxpayers, that there will be a need and a desire amongst policymakers at that time to restore IRS funding, so that we can continue the momentum that’s having a very positive impact,” Werfel said.
The IRS, by tapping into Inflation Reduction Act funds, answered more calls and provided help to taxpayers at levels not seen since the start of the COVID-19 pandemic.
The IRS this year is looking to offer 8,000 more hours of in-person tax help through its Taxpayer Assistance Centers across the country.
The agency used Inflation Reduction Act funds to open or reopen 54 Taxpayer Assistance Centers across the country. As of last December, it also brought on more than 850 new TAC employees.
“It’s clear Inflation Reduction Act funding is making a difference for taxpayers. And we will build on these improvements in the months ahead,” Werfel said.
The agency is also using those funds to rebuild its depleted workforce, modernize its legacy systems and ramp up its enforcement of high-income earners.
Since last fall, the IRS has collected about $520 million in taxes owed. Most of the money stems from 900 cases of millionaires failing to pay their full tax obligation.
The IRS has identified 1,600 total cases where millionaires haven’t paid what they owe, and has assigned the cases to its revenue offices for collection.
“We’re taking swift and aggressive action to ensure high-income taxpayers pay the taxes they owe,” Werfel said.