Lorie McCann, an IRS program analyst and Chicago union leader, begins orientation classes for new tax agency employees with an observation about their co-workers.
It’s hired more than 5,000 workers and posted jobs for 5,300 more. It’s reopened walk-in tax clinics that shuttered as staffers quit over the years. Workers rejoiced in Cincinnati when the agency replaced almost two-dozen copy machines that had been down for almost three years. No longer must agents queue up in front of the machines to print and scan taxpayer notices.
For the first time in years, employees say, it’s not so bad to work for the tax man.
“We do see light at the end of the tunnel,” said Shannon Ellis, who answers taxpayer help phone lines in Kansas City, Mo., and is the president of the local National Treasury Employees Union chapter. “Many of these employees, they want to do the job. They’re there for a reason.”
The Inflation Reduction Act, one of President Biden’s chief legislative victories, gave the IRS $80 billion over 10 years to stiffen tax enforcement on high-income earners and major corporations, and improve the agency’s customer service and technology systems. The IRS has already spent nearly $850 million of that money in preparation for the 2023 tax season.
In the near-term, it’s made the tax agency a better place to work, employees and union officials told The Washington Post. The IRS’s performance has also improved so far this tax season. It processed 2 percent more returns by March 10 than it had at the same point in 2022, and issued 8.5 percent more refunds, two key indicators, experts say, of the agency’s improvement.
For taxpayers, that means better IRS phone service and timely refunds, tax pros say. The IRS has also mostly conquered its backlog of paper filings, and is opening its mail on time, a prospect that was unheard of during the 2022 tax season.
As of March 25, the IRS had opened all of its incoming taxpayer mail, according to agency data obtained through the Freedom of Information Act. At the same point in 2022, it had more than 314,000 unopened letters from taxpayers.
“The thing that is most encouraging about this moment, is that we’re now going to give this agency that has service in its name, the ability to serve the American people in the way that their employees have always wanted,” Deputy Treasury Secretary Wally Adeyemo said in a recent interview.
Staffers are excited to see new employees, Ellis said, but fresh faces need in-depth training on the tax code, a process that can take weeks, if not months for some roles. Federal watchdog groups have for years criticized the IRS’s paltry training programs.
“Although this is a historic investment, and there are a lot of things that could be changed right away, there are just some — I’m not going to say intractable problems, but longer-term things that just are going to take some time,” said Chad Hooper, executive director of the Professional Managers Association, which represents IRS supervisory staff.
The agency’s growth has addressed problems that IRS officials and labor leaders have identified for years. Understaffing and poor digital tax-filing tools led to a massive filing backlog during the worst of the pandemic, and new hiring has allowed the agency to manage the paperwork. Outdated technology forces legions of IRS workers to enter taxpayer data by hand into computer systems; the agency earlier in March obtained new programs that can scan paper tax returns and input data automatically.
“It’s horrible — and it’s the best its ever been,” Hooper said. “We’re seeing the agency work on things that are important but feel really minor, and, sad to say, like a ceiling that was leaking for a million years, or a carpet that’s disgusting.”
In Cincinnati, that meant finally replacing copy machines that had been out of service since before the pandemic, said Regina Parker, the local union president. The wait to use the machines grew so long, she said, that employees came into the office on their off days to scan and copy their paperwork.
The IRS in February updated its software to allow taxpayers to respond to mailed notices by uploading documents to its website. That immediately appeared to cut down on the amount of phone calls IRS customer service representatives received, said Beth Willwerth, who answers those calls and runs the local NTEU chapter in North Andover, Mass.
“Any time that employees see that there’s another method that taxpayers can contact us, or doing it through the website, that’s huge,” she said.
But most of the funding directed to the IRS won’t kick in for years, and is meant to address problems that have accumulated over decades. The tax service runs 60 separate case-management systems, many of which cannot communicate with one another. Its written notices to taxpayers, often decried as stilted and complicated, are hemmed in by the IRS’s generations-old coding protocols, the oldest of which dates to the 1960s. Even if the agency wanted to simplify the millions of letters it sends out each year, doing so would be a herculean technological undertaking.
The desktop computers are slow, workers frequently complain. Laptops fail. Many teleworking employees must be issued IRS printers to do their jobs at home because of strict laws on taxpayer data protection.
The IRS has gained a poor reputation in recent years among federal employers. It placed 271st out of 432 sub-agencies in the Partnership for Public Service’s 2021 employee satisfaction survey.
The agency’s marks in that survey since 2015 — after the IRS endured five consecutive years of Republican-led budget cuts that slashed 20 percent of its annual budget — improved, but the gap between the tax service’s scores and the rest of the federal government widened.
Then-IRS Commissioner John Koskinen traveled the country during that period to meet with employees and hear their concerns. Mostly, he said, workers wanted to know how they were supposed to keep the agency afloat with fewer resources and colleagues. The IRS’s workforce shrank by more than 8 percent from 2013, when Koskinen took office, to 2015, when workplace satisfaction scores bottomed out.
“I spent time kidding with people, saying, ‘Don’t retire, life is going to get better, we need you,'” he said.
At the end of the day, though, there wasn’t a whole lot Koskinen could offer, he admitted: “You get to a point where you do less with less.” He told employees that his meetings were important to gain feedback on how to triage vanishing resources.
The Biden administration and congressional Democrats included broad new funding for the IRS in the Inflation Reduction Act in hopes of raising more revenue to fund spending on climate change and health-care programs.
Republicans criticized the proposal, saying it would “supersize” the IRS, and some falsely claimed it would lead armed government agents to harass taxpayers, prompting threats against agency employees.
One of the first bills passed by the new GOP House majority would repeal the new IRS funding; the Democratic-controlled Senate is unlikely to take up the measure.
That status as a political punching bag has some IRS employees wary, said David Carrone, a revenue agent and president of the Louisiana-Arkansas NTEU chapter. Workers are “cautiously optimistic,” he said, about workplace improvements — such as new clerical staff and customer service reps at walk-in tax clinics, and resumptions of basic office maintenance that had been put off — but wonder whether those additions could get taken away.
But in Chicago, Lorie McCann said her union chapter planned fewer retirement send-offs than usual. Some colleagues who had said they were ready to leave the IRS after decades of service changed their minds.
“They told me they wanted to see what happens next,” McCann said, “and they want to be involved in it.”