Taxpayer Service Expected to Improve in 2023, IRS Says

The Inflation Reduction Act (IRA) provided the IRS with funding of nearly $80 billion over the next 10 years to supplement its annual appropriations.

“While the funding earmarked for tax law enforcement has been controversial, the legislation included supplemental funding of $3.2 billion for taxpayer services, including pre-filing assistance and education, filing and account services, and taxpayer advocacy services,” Collins’ report states.

The report continues that $4.8 billion would “enable the IRS to continue modernizing its information technology (IT) systems, including advancement of customer callback and other technology to provide a more personalized customer experience; and $25.3 billion to support taxpayer services and other operations.”

“If spent wisely, this funding will give IRS management the tools it needs to bring U.S. tax administration into the 21st century by enabling it to hire and train the workforce of the future, replace antiquated IT systems, and generally revamp the taxpayer experience based on principles of fair and equitable tax administration,” Collins wrote.

As its stands now, “the IRS will have to perform a difficult balancing act with its current resources and will need to ensure it does not create a new paper backlog in 2023 by reassigning too many Accounts Management employees from processing case inventories to answering the phones,” Collins wrote. “The IRS needs to end the vicious cycle of paper backlogs. As employees are trained and report for duty, I expect we will start to see improvements in service, probably by the middle of 2023.”