The Internal Revenue Service will launch a full-court press this month to tackle its massive backlog of tax returns, aiming in the next 30 days to extend the first of 5,000 job offers and add high-tech customer support tools throughout its operations, officials said Thursday.
The tax collector will deploy a second “surge team” to sort through its accumulation of 24 million returns and correspondence, reassigning 700 employees at its processing centers in Utah, Missouri and Texas. It will hire more contractors to staff phone lines and complete clerical work. In recent days, it expanded customer callback functions to 70 percent of its phone lines, a move that has already saved taxpayers 1 million hours of hold time.
The moves, disclosed by a senior Treasury official who spoke on the condition of anonymity because they were not authorized to speak about it publicly, represent the agency’s most aggressive plan to dig out from the massive backlog, the result of lagging operations due to the coronavirus pandemic.
The IRS briefly sent employees home in March 2020, the peak of tax-filing season, creating a cliff of returns and correspondence from which it still has not recovered. The consequences have been severe for taxpayers who rely on tax credits or refunds for basic living expenses, and underscored weaknesses in the agency’s staffing and 60 year-old IT infrastructure.
Congress is set to boost the agency’s funding in its pending $1.5 trillion spending bill. The IRS will receive $12.6 billion, a 6 percent increase and the agency’s largest budgetary gain since 2001. It includes $5.4 billion for tax enforcement, with some funding positioned to carry out sanctions against Russian oligarchs related to the invasion of Ukraine, and $2.8 billion for consumer services such as taxpayer assistance centers and low-income tax clinics.
“IRS employees have been working tirelessly to process backlogged returns and taxpayer correspondence. To ensure inventory is back to a healthy level for next filing season, we are leaving no stone unturned — taking an all-hands-on-deck approach to ensure as many employees as possible are dedicating time to return processing,” IRS Commissioner Charles Rettig said in a statement. “This includes bringing on new employees and reassigning current IRS employees to process inventory.”
But some experts remain concerned that the steps could come too late to spare taxpayers pain associated with IRS delays. The target for resolving the backlog is by year’s end, say officials, who note that it will take 30 to 45 days to hire and train new employees. All told, the IRS expects to hire 10,000 employees by the end of 2023.
The IRS has secured permission from federal workforce officials to expedite the hiring process, eliminating some selection requirements. The “direct hiring” authority, approved by the Office of Personnel Management this month, will allow managers to extend offers to candidates on the spot at job fairs in Kansas City, Mo., on March 18 and 19, Austin on March 24 and 25, and Ogden, Utah, on March 31 and April 1.
Officials say they are working to drum up interest in the positions, emphasizing the non-salary benefits the IRS provides and the agency’s mission. Candidates will still need to satisfy standard screening protocols for federal workers.
Without the authority, it takes the IRS 88 days on average to hire a worker, according to the National Taxpayer Advocate Service, then months of training. For instance, tax examiners in the wage and investment division, the agency’s largest taxpayer services section, need eight to 18 weeks of training before they can begin work. Contact service representatives, the workers who answer phones, respond to mail and log data from paper returns, need more than 37 weeks of training.
But the IRS may struggle to attract qualified candidates, experts say. The agency has lost nearly 20,000 employees since 2010 and staffing has long been one of its most pressing obstacles. The division responsible for opening paper returns and manually transcribing them into computer files lost about 20 percent of its staff last year to retirements and departures, two agency officials familiar with the situation said.
The agency also pays well below the private sector for comparable positions. Employees who answer taxpayer questions on the phone and handle correspondence make between $24,000 and $41,000 annually, depending on seniority.
The Treasury official said the agency was searching for ways to attract candidates to the hiring events and retain workers who were looking for new jobs. Proposals being considered include signing and retention bonuses, the official said.
Provisions in the spending bill, which could pass the Senate and head for President Biden’s signature as soon as Thursday evening, also allow the IRS to bypass some hiring steps to bring aboard more senior staff to handle the underlying causes of the backlog.
A decade’s worth of underfunding has left the tax agency unable to update its core programs and the tax code — including tax increases passed by Trump-era Republicans and pandemic stimulus payments pushed by the Biden administration — and have prevented the IRS from modernizing.
The agency’s effort announced Thursday involves recently cultivated technology tools to help prevent tax returns from adding to the backlog. The IRS began using a newly developed automated tool that corrects simple math errors on filings, keeping them from being added to the backlog of paperwork that needs manual processing.
The agency also activated new online automated support programs, including chat bots in English and Spanish and live digital assistance. The tools have allowed the IRS to reposition employees who previously answered the phones to working through backlogged returns.