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IRS Commissioner Chuck Rettig has urged members of a House Appropriations subcommittee to give the agency the authority to hire short-term cyber and IT talent more quickly and pay them at a rate beyond the pay scale for career employees.
Rettig said critical pay authority, which he previously advocated for during his confirmation hearing last summer, would enable him to hire promising new recruits at a rate closer to what he was able to achieve during his 36-year career as a tax attorney.
“I could talk to them on Friday and they could start on Monday,” Rettig told members of the subcommittee on financial services and general government on Tuesday.
By comparison, hiring new talent at the IRS can take about six-to-eight months, a process so drawn out that applicants drop out before they ever reach the end.
“We lose people who we try to bring on board who would be significant for us going forward,” Rettig said.
President Donald Trump’s fiscal 2020 budget request would reinstate critical pay authority for the IRS through the end of 2023. Congress introduced the critical pay authorization in 1998 as part of the IRS Restructuring and Reform Act, but the agency’s authority expired in September 2013.
With this critical pay authority reinstated, the IRS could hire up to 40 new hires in a six-to-eight week timeframe.
“We need things like streamlined critical pay to get our people on board. It’s critical for the operation of the agency,” Rettig said.
Former acting IRS commissioner David Kautter also supported bringing back critical pay authority. Following a February 2018 Senate Finance Committee hearing, Kautter told reporters the IRS has only hired about 130 people under the critical pay authorization.
Beyond short-term employees, Rettig said the IRS is in the process of hiring about 4,300 compliance personnel, and currently has about 14,000 customer service representatives handling calls from taxpayers.
However, the agency continues to struggle with aging IT systems. The FY 2020 budget request would allow the IRS to reduce aging legacy hardware systems from a target of more than 43 percent in FY 2019 to 39 percent by the end of FY 2020.
Treasury Secretary Steven Mnuchin told members of the subcommittee in a separate hearing Tuesday the IRS has faced underfunded technology “for years and years,” across multiple administrations.
“It’s somewhat embarrassing that we are operating at the size and scale we are, the IRS is under attack all the time for cyber issues and that we are on dated technology,” he said.
The president’s budget request includes $290 million for the first installment in IRS’s Business Systems Modernization Account. That funding, Mnuchin said, would reduce the long-term of maintaining legacy systems and “dramatically improve” the taxpayer experience. However, the full IT modernization plan will take about five or six years to implement.
“This has to be multi-year funding for this to be effective. This can’t be turned on and off,” Mnuchin said.
By modernizing its legacy IT, Mnuchin said the IRS should be able to leverage its data to conduct more tax enforcement electronically.
Rettig added that the IRS has a “best-in-class data warehouse” and has looked at using data analytics to increase its enforcement capability.
“I believe we that we need not only personnel, we need to better use the data and the analytics that are available to us,” Rettig said.
While the President’s budget request funds the IRS at a higher rate than enacted levels, Rep. Sanford Bishop (D-Ga.) said the budget request “continues to de-prioritize” enforcement and taxpayer services.
In addition, the IRS since 2010 has seen its budget decrease by nearly $1 billion, resulting in a more than 20 percent decrease in its workforce.
“How can you better address that data without having the personnel to do it?” Bishop asked.
Rettig told Bishop that in addition to workforce cuts, the IRS has seen its training budget “significantly cut” since 2010.
“We need a trained workforce,” he said. “When we have a trained workforce in place, we’ll be better able to quantify the actual number of people we need to bring on board.”