IRS Commissioner Danny Werfel says the agency had lost the ability over the years to adequately assess “high-net-worth, high-income filers.”
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Joe Raedle/Getty Images
IRS Commissioner Danny Werfel says the agency had lost the ability over the years to adequately assess “high-net-worth, high-income filers.”
Joe Raedle/Getty Images
There are two competing trends: The US population has grown at the same time as the IRS workforce has shrunk. Meet the man in charge of a 10-year, $80 billion plan to address the agency’s woes.
Who is he? The recently appointed commissioner of the Internal Revenue Service, Danny Werfel.
- Werfel took the job in March, becoming the 50th commissioner in the agency’s history.
- Here are some some quick figures to get your head around what it’s dealing with: The IRS has about 85,000 employees, an annual budget of $12 billion, and collects about $4.1 trillion in taxes each year, which represents about 96% of total gross revenue of the United States.
Danny Werfel says building trust is essential for the IRS.
Al Drago/Bloomberg via Getty Images
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Al Drago/Bloomberg via Getty Images
Danny Werfel says building trust is essential for the IRS.
Al Drago/Bloomberg via Getty Images
What’s the big deal? To be clear, the IRS is struggling on a number of fronts — in ways that can affect you directly.
The IRS is at the beginning of a multi-year effort to strengthen its capacity.
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Chip Somodevilla/Getty Images
Want more financial journalism? listen to the Consider This episode on the rise and fall of a notorious financial investor.
What is Werfel’s plan?
On cracking down on tax evaders (and making sure it’s done fairly):
Where we have lost capacity over the years is in our ability to evaluate high wealth, high income filers.
There are roughly 390,000 of these wealthy and ultra-wealthy filers. And right now the IRS has about 2,600 people to assess. Also really important, these 390,000 filers, their files are very voluminous … and they are very complicated.
We need to increase our capacity to deal with this. And that involves hiring — and not just auditors, but economists and engineers and data scientists to really figure out and value for the American people what these wealthy filers have versus what they’re paying, and make sure we’re closing that the gap.
[And] I’m offering the strongest assurance I can that the audit rates that are in place for people earning under $400,000 a year in small businesses, those audit rates are not going up.
On strengthening the workforce and improving customer service:
We must meet taxes where they are.
Some want to come into a walk-in center and talk to us in person. And so we have the ability now to reopen walk-in centers that were closed due to lack of funding, and to fully staff them and offer Saturday hours … People want the IRS website to work with more effective way. And then we can make investments for that [the] a web platform is as modern and functional as your local bank or your favorite airline.
So, with the funds, we can begin to build a suite of world-class customer service solutions that taxpayers deserve.
So, what now?
- While Werfel and the IRS implement the plan, they face continued pushback from House Republicans, who claim the agency has targeted conservative groups in the past and will go after middle-class Americans. – assertions that the IRS and Treasury Secretary Janet Yellen deny.
- Werfel said building trust was essential for the IRS and it was on a “continuous journey” to improve its service. “We’re in a really good place right now, in terms of getting the funding we need to build our capacity and where our focus should be on serving the taxpayers.”
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