Here's a rundown of the top workforce and IT priorities the IRS will need to address now, before embarking on more long-term planning.
The IRS is looking to use the $80 billion it’s getting over the next decade as part of the Inflation Reduction Act to rebuild its workforce and modernize its IT, after more than a decade of belt-tightening.
But in the weeks since President Joe Biden signed the legislation into law, the IRS has found itself in the spotlight over its more immediate challenges. Here’s a rundown of the top workforce and IT priorities the IRS will need to address now, before embarking on more long-term planning.
The IRS is getting these unprecedented resources to help staff up over the next decade, but members of Congress say its current hiring efforts are falling behind.
Sens. Bob Menendez (D-N.J.) and Bill Cassidy (R-La.) recently joined Reps Abigail Spanberger (D-Va.) and Brian Fitzpatrick (R-Pa.) in telling the IRS it’s not on track to hire 10,000 new customer service representatives by the end of next year.
The lawmakers led 89 of their congressional colleagues in a letter outlining their concerns to the IRS.
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The lawmakers, in their Aug. 12 letter to IRS Commissioner Chuck Rettig, also cited a June report from the National Taxpayer Advocate showing that the IRS has hired just over 3,400 of the 5,000 customer service representatives it planned to bring on board before the end of the calendar year.
“The IRS must improve its recruitment and retention efforts to adequately address the backlog and increase levels of taxpayer service,” the lawmakers wrote.
Meanwhile, the agency has more than a million more paper tax returns in its backlog than it did at the same point last year.
While the IRS is getting the funding it needs to rebuild its workforce and legacy IT over the next decade, the agency still struggles with pay and time-to-hire challenges that persist across the entire civilian federal workforce.
The agency, however, is looking at other ways to attract prospective employees.
Chad Hooper, president of the Professional Managers Association, which represents IRS managers, said the agency is looking at ways to make telework and workplace flexibility its competitive advantage in a tight labor market.
“The IRS is really trying to step out in front of everyone else on telework, and we’re really impressed with them. I’m hoping that they learn to talk about this as a benefit, because it is actually a tremendous one,” Hooper said in an interview last month.
Hooper said the IRS future of work team, to test out this theory, is considering launching a pilot in fiscal 2023 that will compare the productivity and efficiency of remote and hybrid IRS employees against peers who have already returned to the office.
The pilot, Hooper explained, will include a test group of about 1,000 employees who will remain 100% telework for the duration of the pilot.
Another group of hybrid workers will come into the office periodically, but only in cases where management can justify a full work day of office work.
“So it’s not to say, ‘You have to come in on Wednesdays, because we have a group meeting together.’ There needs to be a business reason why that person has to come in for the entire day,” Hooper said. “The idea is to try to help managers rethink the workload planning for like a month, and how can we rearrange our in-person activities, so that those in-person days feel productive, and that you’re not at your desk taking Zoom meetings all day, which is the experience of some folks right now.”
An IRS spokesperson said in a statement to Federal News Network on Wednesday that “the IRS continues to explore a number of ways to help our employees serve the nation’s taxpayers.”
“While several options are under discussion, none of them have been finalized so it’s premature to discuss any pilots or proposals at this time,” the spokesperson said.
Hooper said the IRS is taking a “really progressive posture” on telework, compared to similar federal agencies, in the hopes of allowing some employees to work remotely.
The IRS, meanwhile, is getting funding to modernize its legacy IT and wean the agency off its reliance on paper-based systems — a workplace culture that may, in some cases, limit the feasibility of remote work for some employees.
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“As we get this modernization money that may untie us from some of these paper shackles that we have, that could make the IRS a nationwide job,” Hooper said.
The IRS already has more than 500 posts of duty across the U.S., which give potentially hybrid or remote employees an opportunity to work in-person on days when necessary.
Hooper said he expects some prospective hires would consider a remote job a worthwhile tradeoff for a salary that’s quite on-par with what they could get from a largely in-person position in the private sector.
“Maybe their spouse’s career can have priority, if they need to go to another city, because the IRS is wherever you’re going to go. I think that’s really what will help the IRS in its recruiting message going forward,” he said.
The IRS, meanwhile, notified Congress last week about a “major incident” that led to the inadvertent disclosure of data on 120,000 individuals.
Anna Canfield Roth, the Treasury Department’s acting assistant secretary for management said the IRS discovered some machine-readable Form 990-T data was made available for bulk download on its Tax Exempt Organization Search that “should not have been made public.”
Roth said the IRS will contact all filers impacted by the inadvertent disclosure in the coming weeks.
Treasury disclosed the incident in an Aug. 26 letter to House Homeland Security Committee Chairman Bennie Thompson (D-Miss.), as part of its reporting obligations under the Federal Information Security Modernization Act.
FISMA requires agencies to report a “major incident” involving more than 100,000 individuals no later than seven days after its discovery.
Roth said Treasury has instructed the IRS to conduct a prompt review of its practices to ensure protections are in place to prevent “unauthorized data disclosures.”
Roth said the inadvertent disclosure did not include the release of Social Security numbers, individual income information, detailed financial account data, “or other sensitive information that could impact a taxpayer’s credit.”
In some instances, the data included individual names or business contact information, Roth said.
“The IRS took immediate steps to address this issue. The agency removed the errant files from IRS.gov, and the IRS will replace them with updated files in the next few weeks,” she wrote.
Roth said the IRS will also work with groups that routinely use the files to update and remove the erroneous files and “replace them with the correct versions as they become available.”
The Form 990-T is the business tax return used by tax-exempt entities, including tax-exempt organizations, government entities and retirement accounts, to report and pay income tax on income that is generated from certain investments or income unrelated to their exempt purpose.
The IRS is required to publicly disclose this information for 501(c)(3) organizations. However, Roth said similar information was inadvertently published for a subset of non-501(c)(3)s, which are not subject to public disclosure.
An IRS statement on Sept. 2 on its website said the agency is “continuing to review this situation.”
IRS, meanwhile, recently told employees that it will conduct a “comprehensive review” of its existing safety and security measures.
“In recent days, there has been an abundance of misinformation and false social media postings, some of them with threats directed at the IRS and its employees,” Rettig wrote in an Aug. 23 all-staff email to employees.
Rettig said the security review will include perimeter security, designations of restricted areas, exterior lighting and security around entrances to its facilities and other various protections.
Rettig said the IRS has increased engagement with its law enforcement partners at the Treasury Inspector General for Tax Administration, Department of Homeland Security and local law enforcement officials.
The all-staff email directs employees to report suspicious activity, and directs the IRS employees “feeling additional anxiety or concern” to the agency’s Employee Assistance Program.
Rettig said local Facilities Management and Security Services personnel will send additional guidance in the near future and provide updates on the safety and security of IRS employees.
Rettig told the workforce that he is “extremely proud of the work you all do across our agency in service of the American people,” and said he would ensure that their work environment is safe and secure.
“For me this is personal. I’ll continue to make every effort to dispel any lingering misperceptions about our work,” he said. “And I will continue to advocate for your safety in every venue where I have an audience. You go above and beyond every single day, and I am honored to work with each of you.”
The IRS has come under intense scrutiny since President Joe Biden signed the Inflation Reduction Act. Critics warn the IRS will hire an “army” of 87,000 new personnel to beef up its enforcement operations.
The Professional Managers Association said many of these new hires will help offset the IRS’s rate of attrition. PMA said the IRS expects to lose 52,000 employees over the next six years. In addition, the IRS saw a 20,000-employee drop in its overall headcount between 2012 and 2019.
“Most of these will not be enforcement agents. They will be customer service agents,” the PMA wrote. “Given the IRS was only able to respond to 9% of calls last year due to staffing shortages, the additional customer service agents should be a welcome reform.”
Some congressional Republicans, however, remain unconvinced by the IRS’s plans to rebuild its workforce.
Sen. Rick Scott (R-Fla.), in an open letter to “America’s job seekers,” warned prospective hires not to seek jobs at the IRS, warning that congressional Republicans would seek to reverse the agency’s $80 billion rebuilding efforts.
”These new positions at the IRS will not offer you the long-term job stability you may expect from a position with the federal government,” Scott wrote on Aug. 16. “Put another way: this will be a short-term gig. Republicans will take over the House and Senate in January, and I can promise you that we will immediately do everything in our power to defund this insane and unwarranted expansion of government into the lives of the American people.”
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