IRS Boasts of Better Services Thanks to $80 Billion Funding in ‘Inflation Reduction Act’

The Internal Revenue Service (IRS) headquarters building is seen in the Federal Triangle section of Washington, D.C., on April 27, 2020. Chip Somodevilla/Getty Images

The Treasury Department has announced that it is rolling out new measures aimed at improving customer service for 2022’s tax season.

The Internal Revenue Service (IRS) is starting to accept federal income tax returns for 2022, and is toting its new and improved services after receiving $80 billion in funding for the next decade from last year’s Democrat-controlled Congress.

Treasury Department Deputy Secretary Wally Adeyemo said in a statement that the IRS will use the funds from the “Inflation Reduction Act” (IRA) to hire thousands more customer service staff to answer calls and modernize its aging technology.

Treasury Secretary Janet Yellen has stated that a top priority of the IRS is to clear problems with filing backlogs and that the new staff and filing computer systems would help alleviate them.

Customer Phone Service and Enforcement Staff Get Boost

“The IRS answered too small a share of the total number of calls they received last year,” Adeyemo said.

“These 5,000 new hires will ensure that changes and help address the continued elevation of call volumes we’ve experienced over the past two years.”

He noted that only 13 percent of 173 million calls to the IRS were answered by live agents last year, while 8 percent of calls were answered with automated assistance.

A Treasury Department official told ABC News that the new hires will allow the tax service to finally answer more calls this tax season, with the goal of reducing average wait times from 30 minutes to 15 minutes.

The new staff will also be tasked in the ramping up of auditing of tax returns to curb evasion, officials told Reuters.

The new phone center staff will be trained and in place by Presidents Day, Adeyemo told reporters at a press conference.

The IRS also beefed up staffing at taxpayer assistance centers, with 700 new hires at 361 locations across the country.

Meanwhile, more than 100 Taxpayer Assistance Centers nationwide will host monthly “Taxpayer Experience Days” to provide in-person assistance on Saturdays when most taxpayers are off from work.

Upgrades for IRS Filing System

The deputy secretary also said that “meaningful progress” was made in efforts to update the IRS’s antiquated technology.

One new feature will allow taxpayers to respond to notices for document verification and other issues electronically rather than via mail.

“The IRS’s technology relies on a programming language that was created in the 1960s. Fully rebuilding the IRS will take time,” Adeyomo said.

The tax agency said it is proceeding with its 10 year plan to gradually automate the annual tax filing process to replace the current system of manually inputting millions of individual paper returns at a time.

“These customer service improvements will have a positive impact on tax filers, ensure returns are processed more quickly and taxpayers are able to access credits and benefits they’re entitled to in a timely manner,” the official said.

The IRS began accepting federal returns on Jan. 23, with individuals having until April 18 to file.

Taxpayers who request an extension will have until Oct. 16 to submit.

“Our work to improve services will continue throughout policies and the resources provided by the [Inflation Reduction Act] will continue to support a years-long transformation with the agency long after this filing season concludes,” Adeyemo said.

New GOP House Majority Passes Bill to Remove New Funding

The agency’s new resources come as congressional Republicans try to reclaim the money approved for the IRS in the Inflation Reduction Act—which was opposed by every GOP lawmaker in the House and Senate.

Earlier this month, the new House Republican majority voted to remove funding for the IRA in its first piece of legislation brought to the floor.

“Do you make $75,000 or less?” tweeted then-House Minority Leader Kevin McCarthy after the passage of the bill last August.

“Democrats’ new army of 87,000 IRS agents will be coming for you—with 710,000 new audits for Americans who earn less than $75k.”

GOP lawmakers are concerned about the U.S. government hiring of 87,000 new agents to enforce tax laws, saying that they will eventuate in the targeting of middle and lower income families for collecting tax income.

​​IRS Commissioner Charles Rettig, denied the claim that that his agency would not increase audits of households making less than $400,000 per year, in a letter in August.

Rettig claims that only high-income Americans and corporations will be targeted and that the majority of hires would fill the positions of about 50,000 IRS employees on the verge of retirement.

The House legislation stands little chance of passing the Democratic held Senate.

The Office of Management and Budget said in a statement that President Joe Biden would veto the bill if it reached his desk.

Reuters contributed to this report.