Internal Revenue Service Commissioner Charles Rettig testifies on Capitol Hill in October 2020. Toni L. Sandys/The Washington Post via AP, Pool
IRS Head Laments Growing Duties Amid Shrinking Workforce: 'We Do Get Outgunned'
The gap between what taxpayers owe and what they pay collectively each year has grown to nearly $1 trillion.
The head of the Internal Revenue Service conceded on Tuesday his agency is overwhelmed by its deluge of responsibilities and is struggling after a decade-long battle with dwindling resources.
The IRS is collecting nearly $1 trillion less than the federal government is owed in taxes every year, agency Commissioner Charles Rettig told the Senate Finance Committee, which he attributed in large part to insufficient personnel. He noted IRS has shed 17,000 enforcement workers over the last decade, which represents only about half of the total workforce reduction since 2010.
“The IRS absolutely needs more resources across all lanes,” Rettig said. “We do get outgunned. There’s no other way to say it.”
He added IRS has about 6,500 frontline agents who work exclusively on the “most complex and sophisticated” individual and corporate matters, a shrinking number that has led to far fewer enforcement actions. In 2018, the number of cases IRS launched against non-filing individuals and businesses declined by 77% and 91%, respectively, compared to 2010. He said that trend would quickly reverse if IRS was provided the budget it needed to quickly onboard more staff.
“We are using our resources to the best of our ability,” Rettig said. “It’s not a dedication or a people issue. It’s a numbers issue.”
In a recent preview of his fiscal 2022 budget request, President Biden proposed a $1.2 billion, or 10.4%, increase for IRS. The White House said the funds would go specifically toward enhancing oversight of high-income and corporate tax returns, boosting other parts of tax enforcement and improving customer service. Rettig faced pointed questioning from senators who faulted his agency for failing to go after the highest-income Americans who avoid paying taxes, and the commissioner acknowledged there was inequity in the current system.
“If people aren’t paying their fair share, it’s borne by the people who are paying their fair share,” Rettig said. “Certain elements of society take advantage of an agency like the IRS if they think we’re on our back.”
He also acknowledged the agency’s recent shortcomings in providing adequate customer service, noting again it has been overwhelmed with higher demand—as IRS has been flooded with questions surrounding stimulus payments, a child tax credit overhaul, the tax filing deadline delay and other changes—while maintaining insufficient staff. The agency has fielded as many as 1,500 calls per second on some recent days, marking a 300% increase, and has already garnered 1 billion hits to its website in 2021. He noted Congress last year funded 1,000 new hires to assist with those efforts, but those employees are still being onboarded and trained. IRS has tasked previously trained employees who now work in other jobs to help respond to taxpayer needs, directed employees to work multiple shifts and instituted mandatory overtime.
“It’s all hands on deck,” Rettig said.
The agency is dealing with “more challenges on more challenges on more challenges,” he said, while thanking the workforce being “extraordinary in rising to” meet them. The COVID-19 pandemic has exacerbated staffing issues, he said, and also made it harder for to hire. Meanwhile, IRS still has 1.7 million returns from tax year 2019 to process, though he vowed to clear that out this summer while still meeting a July deadline to deliver the new child tax credit payments. In the meantime, he thanked the American people for their patience.
“We get it that it’s far from perfect,” Rettig said of ongoing backlogs and the growing tax gap, while pleading for help from Congress. “We know we could do better. The desire of our employees is there to do better. We need the tools, we need the resources, we need the staffing, we need the training, we need modernization, we need information reporting. It’s a multifaceted approach.”
For its part, the committee appeared poised to deliver on Rettig’s wishlist.
“We’ve got a lot of heavy lifting to do on a lot of issues,” said Sen. Ron Wyden, D-Ore., the committee’s chairman. “But this has been a wakeup call.”