Nov. 7, 2023 I'm honored to be here today with Secretary Yellen, to join her in thanking IRS employees for all the hard work being done to improve service to taxpayers and the nation. IRS employees have a strong commitment and dedication to taxpayers. Their efforts have been the driving force behind our successes during the past year and the ongoing transformation work so critical to our future. I want to thank Secretary Yellen for laying out our goals for the upcoming 2024 tax filing season. These are ambitious goals. But I'm confident we are up to the challenge. You only need to look at what we've accomplished so far with IRA funding to see what's possible in the upcoming filing season and the years ahead. This transformation work has already started at the IRS, and taxpayers are already seeing what a difference a properly funded tax agency can do for them, their families and the nation. Thanks to Inflation Reduction Act funding, taxpayers saw a much better filing season last year than in 2022. And IRS employees are working hard to continue this momentum as the January tax season approaches. The new funding is driving change across the IRS, and we are seeing a wave of improvements that the agency hasn't seen in a generation. Each new filing season – the time of year when most Americans interact with the IRS – presents an opportunity to show how we are investing new funds to make long overdue improvements to customer service. This coming filing season, taxpayers will, like last year, see and feel a notice-able difference in IRS performance in being accessible, responsive, and effective in helping navigate this nation's complex array of tax laws: We are improving to allow taxpayers to easily contact the IRS—whether in person, on the phone or on the web. In the area of audits and exam, we are using new funding exclusively to address compliance issues among wealthy taxpayers who aren't following the rules or doing the basics of paying the taxes they owe. This enforcement effort, which continues to accelerate, includes not just millionaires but large corporations and complex partnerships as well. When hard-working taxpayers file their taxes in early 2024, we want them to know the IRS is taking steps to make sure everyone is paying what the law says they owe – including those who can afford to hire an army of accountants and lawyers. And we are looking out for taxpayers in other ways. Everyone should know that the IRS is on the side of taxpayers. And there is a clear example of that when it comes to tax scams and schemes. IRS employees are working to protect honest taxpayers from scam artists, and root out the nefarious actors that perpetrate them. Let me be as clear as possible. The IRS agenda in using Inflation Reduction Act funds is as follows – if you are middle or low income, better service; if you are wealthy, more scrutiny. To achieve this agenda, we must rebuild areas in the IRS that have suffered from more than a decade of underfunding that preceded the Inflation Reduction Act. A critical change we are making involves providing the IRS workforce with the right tools – including training, technology and smarter processes – so we are ready now and, in the future, to meet our core mission of supporting taxpayers and the nation. And that includes tapping into new technology like AI, to help both with our compliance efforts and new taxpayer service tools. Project teams across the IRS have been working diligently to deliver several new tools and service options for taxpayers that get us closer to meeting our objectives. I'd like to highlight a few examples of this great work. One example is phone service. At this point last year, we had an average level of service on the phones of about 14 percent, and we answered fewer than 9 million calls. After hiring more than 5,000 additional phone assistors, our level of service is averaging 75 percent on our main phone line, and we have answered more than 15 million calls. But our improvement here is not just about taking more calls. This past filing season, 84% of taxpayers who interacted with our phone assistors stated that this interaction increased their trust in the IRS. That's up from 70% two years ago. In the upcoming filing season, we want to continue to exceed OMB's trust goal of 75%. Using IRA funds, we are investing significantly in making interactions with us easier through technology. To cite one example, our main toll-free line will have a conversational voice bot this coming filing season to direct calls to the right agent. And perhaps the most exciting change of all – a call back option that triggers in 95% of all cases where the expected wait time exceeds 15 minutes for that topic. This means that for virtually all citizens calling into the IRS, the era of long waits of listening to "elevator music" while waiting for an IRS customer service rep to pick up is over. We plan to make it rare that a wait time will ever exceed 15 minutes on the primary 1040 line and other key customer service lines. But if it ever does, you can hang up and we will call you back later. We also improved in-person service at our Taxpayer Assistance Centers. Since the infusion of IRA funding, we have hired more than 700 new employees, allowing us to serve more than 1.6 million people at TACs this year. That's 18 percent above last year. We've opened or reopened more than 50 in-person locations to help taxpayers across the nation. And where we don't have services, we opened temporary locations to serve taxpayers who don't live near an in-person center. None of these taxpayer-friendly options would have happened without the Inflation Reduction Act resources. But there's more to transforming the IRS. Modernizing our operations is the key to meeting many of our goals. We are using IRA funding to upgrade our information technology infrastructure and to improve the taxpayer experience for those who choose to interact with us online. To cite a few recent examples, we have: Continued moving toward the goal of a "paperless IRS" by 2025. Launched the first phase of an Online Account for business taxpayers. Expanded our Document Upload Tool. Enabled the first digital mobile-friendly and adaptive forms. Our efforts to provide online options to interact with us will help reduce paper correspondence, and in turn reduce taxpayers' need to call to check on the status of a letter they sent to us. The transformational changes we're making extend to enforcement as well. Before the Inflation Reduction Act, the IRS -- for too long -- was unable to do what we needed to enforce the tax law in complex areas involving high-dollar groups, especially wealthy individuals, large corporations and complex partnerships. But with IRA funding, we are turning that around. As part of these efforts, we recently announced major new initiatives to step up audits of the largest corporations and partnerships. At the same time, we have been reevaluating our enforcement activities in other areas, and we will be working to add more fairness on compliance work involving the Earned Income Tax Credit and other refundable credits. In conducting this work, I want to continue to emphasize an important point. Our new Inflation Reduction Act resources are not being used to raise audit rates for small businesses and households earning $400,000 per year or less. I've said it before, and I will say it again. There should be no hair-splitting on the fact that we're increasing our compliance attention on wealthy taxpayers, partnerships and corporations. So, when it comes to IRS compliance, think millionaires and billionaires, not average taxpayers. The audit rates for average, hard-working taxpayers making less than $400,000 will not be increasing, and these rates right now are at historical lows. There is no secret plan to raise audit rates on hard-working people who earn less than $400,000 a year. My marching order to the IRS is that the audit rate for those earning less than $400,000 must not increase. Any other outcome will not be tolerated. That includes those who get W-2 forms or receive most of their income from Social Security or have a small business. Again, these groups should not be worrying about some new wave of IRS audits. But those people earning less than $400,000 will see something else from the IRS in 2024. And that's better taxpayer service. For middle and lower-income groups, Inflation Reduction Act funding means they will have better service and better tools for the IRS. But for those higher-income groups that are cutting corners by not paying their taxes or not following the tax laws, this funding means they are the ones who will see increased compliance attention to combat tax evasion. The changes I've described -- and many others -- are possible because of the ongoing hard work and dedication of employees across the agency. Our continued progress is something we should all be proud of. These improvements show that a well-funded IRS is good for taxpayers and the nation. Building on the success of this past filing season, we will work to meet our ambitious goals. We will continue to put in place improvements to help taxpayers, ensure fairness in tax compliance and upgrade our technology. There is one caveat: For these improvements to continue and accelerate, a consistent, reliable funding stream remains critical for the agency – both in our annual appropriations process as well as maintaining IRA funding. So, the debate over IRS funding comes down to a fundamental choice: The choice between an IRS that is easy to reach to resolve issues or one that is difficult to reach. The choice between an IRS that is ill-equipped to assess and collect what is owed by our wealthiest taxpayers or one that is ready to assess and collect no matter how complex and sophisticated the efforts to shield income. The choice between an IRS that is on its heels as tax scams continue to emerge and exploit vulnerable populations or one that can disrupt these scams, assist people who are victimized, and hold perpetrators accountable. As we really begin to intensify our preparations for the upcoming filing season, I'm excited about what's ahead for the IRS. We have many improvements for taxpayers in the months ahead and beyond. This is an exciting time to be at the IRS, and taxpayers and the nation will see the benefits – both during the upcoming tax season and beyond. Thank you for joining us today. This concludes our event.
