IRS Commissioner Highlights Enforcement Gains Following IRA Funding

The additional funding provided to the Internal Revenue Service under the Inflation Reduction Act is already paying dividends when it comes to increased enforcement, agency Commissioner Daniel Werfel said.

“We are now taking swift and aggressive action to close the gap” after years of underfunding prevented the IRS from adequately auditing and enforcing the tax laws on the wealthiest taxpayers, Commissioner Werfel said during a July 13, 2023, teleconference with reporters.

“In just the last few months, we closed about 175 delinquent tax cases for millionaires, generating $38 million in recovery,” he said. “This is just the start. We’re going to continue to go after the delinquent millionaires as we ramp up enforcement capabilities through the Inflation Reduction Act.”

He also highlighted that Criminal Investigations also closed cases with an assist from the additional funding.

“These evaders spent money owed to the government on gambling and casinos, vacations, and purchases of luxury goods,” Werfel noted. “For example, in one case alone, the person was ordered to pay more than $6 million in restitution.”

The agency commissioner added that efforts are ongoing in terms of the IRS meeting its hiring goals to help improve its enforcement capabilities against the top earners and there is “progress,” although he expects this to be a years-long campaign to boost the agency’s employment levels to adequately handle the special needs of enforcing the tax code on the wealthiest taxpayers.

Werfel also highlighted how the IRA funds are being used to help taxpayers, pointing out that 35 Taxpayer Assistance Centers have reopened since the agency started receiving the supplemental funding provided by the Inflation Reduction Act. He also said that the funding has allowed temporary assistance centers to be utilized as another path for taxpayers to get in-person help from the agency.

The program is called “Community Assistance Visits,” and the first event was held in June in Paris, Texas, in partnership with the United Way

“Currently, seven additional locations have been determined for these special visits,” he said. The locations are:

• Alpena, Mich.
• Hastings, Neb.
• Twin Falls, Idaho
• Juneau, Alaska
• Lihue, Hawaii
• Baker City, Ore.
• Gallup, N.M

The agency in a separate statement issued July 14, 2023, also highlighted some other examples of where progress is being made on the Strategic Operating Plan that was issued earlier this year to detail how the IRA funds would be spent.

For example, the statement noted that the agency is deploying “enhanced capabilities for the Tax Professional Online Account, including account authorization management and payment viewing by the end of September, and live chat and secure two-way messaging in FY 2024.”

It also updated the agency’s progress on modernizing technology, including progress on replacing mail sorting machines and scanners. The IRS “is currently testing a mobile application prototype, Inform Me, built with the capability to scan a paper IRS form, notice, or document,” according to the statement. “The app will recognize the document and pull up related information and guidance on IRS.gov to help taxpayers get their questions answered and get it right. The app is currently undergoing user testing with IRS’ industry partners and at this summer’s Nationwide Tax Forums.”

Deployment decisions will be made following the user tests, IRS said.

By Gregory Twachtman, Washington News Editor