More broadly, the plan describes how the IRS will spend nearly $80 billion in the Inflation Reduction Act, which is meant for the agency to rebuild its workforce and modernize its legacy IT over the next decade.
The IRS plans to hire more than 10,000 employees before the end of this fiscal year, and nearly an additional 10,000 employees in fiscal 2024. Most of the hiring is focused on taxpayer services and enforcement.
Newly confirmed IRS Commissioner Danny Werfel said the spending plan “is only the beginning of our work,” as the agency also looks at long-term ways to modernize its IT and shrink a growing tax gap between what taxpayers owe, and what the agency is able to collect.
“For years, the agency has not had the resources to provide the service people deserve. Across all of our operations we’ve seen the impact. We’ve lost employees and seen our resources stretched thin with new mandates and an increasingly complex economy,” Werfel said. “The IRS looks forward to demonstrating how the actions under this plan will translate into real improvements for taxpayers.”
The IRS hired 5,000 customer service representatives to process correspondence and answer phones last year, and expects to hire an additional 5,000 this year.
The IRS also plans to hire 650 additional employees to staff up Taxpayer Assistance Centers and provide in-person tax help across the country.
The agency is also planning to hire more than 8,700 enforcement personnel between now and the end of fiscal 2024.
This major hiring initiative is meant to rebuild the IRS’s capability to respond to taxpayers and collect unpaid taxes. Many of these hires, however, are also meant to bring a new generation into an aging workforce.
“As the IRS seeks to grow, much of today’s talent is on the precipice of leaving,” the report states.
Nearly two-thirds of the IRS workforce will be eligible for retirement in the next six years, and the IRS said a “growing number of newer employees are voluntarily resigning.”
“Despite what some might think or say, these public servants within the IRS are armed only with calculators and their skills to help us address complex issues,” Werfel said during his confirmation hearing on Wednesday.
The IRS is also looking at long-term fixes to make its hiring and onboarding process to get new hires on the job more quickly.
The report said unpredictable funding from Congress in recent years has led to “operational inefficiencies and limited strategic and long-range planning, forecasting, and hiring.”
The IRS said limited investments in its hiring and HR functions over time have prolonged the vetting and selection process. The report states the agency’s average time to hire for most of its hires is 145 days.
“We will modernize how we attract, retain, develop, and empower our people. Employees will have the modern tools and upgraded facilities they need to perform at their best, collaborate effectively and build meaningful connections within and across teams,” the report states.
The report also acknowledges that the current onboarding processes can be “unwelcoming and slow,” and that some new hires wait for months to receive the tools and training they need to become productive.
“Expanding the workforce amidst these challenging circumstances will require more efficient operational foundations,” the report states.
Among its proposed solutions, the IRS is looking to streamline its hiring process by reducing unnecessary requirements for candidates and prioritizing the “applicant experience.”
The IRS said it will also automate some parts of the application process, while taking steps to avoid “any bias in the process.”
“Confusing, multi-step application and qualification processes can cause qualified candidates to disqualify themselves accidentally, or to opt for other opportunities with organizations that have faster, simpler, more transparent hiring,” the report states.
The IRS is also looking at posting rolling announcements of frequently hired roles, as well as grouping job announcements by skills so that applicants can apply for multiple positions that match their skills.
The IRS is also looking at “geographic flexibility” in its hiring decisions, and ensuring its workforce represents underserved communities.
“As we continue to evolve into a digital agency, we will expand our footprint into additional locations, underrepresented and underserved communities, and Tribal lands while still meeting IRS operational needs,” the report states.
The IRS is also looking at ways to implement skills-based hiring and better flag “intrinsic predictors of success,” in order for candidates to more effectively seek out roles that would meet their skills.
The IRS is also looking for new skills from its next-generation workforce. The agency is specifically looking to hire more data scientists, as well as experienced personnel who can respond to increasingly complex tax filings.
“We will need curious problem-solvers who are technology- and data-savvy to power new ways of operating,” the report states. “Through training, the workforce will transform from one where thousands of people process paper in cumbersome, manual processes to a greater share of employees who provide high-quality services to taxpayers.”