As typical, the politicians are lacking the purpose: Success or failure of the IRS’s formidable plan to spend $80 billion in new cash received’t be measured by what number of new workers it hires. Relatively it’ll rely largely on the company’s capability to rent the precise individuals, improve and modernize its expertise, and alter its hidebound tradition, administration, and enterprise practices.

At TPC ‘s annual Donald C. Lubick Symposium this week, a broad vary of consultants, together with Deputy Treasury Secretary Wally Adeyemo, former IRS Commissioner Charles Rossotti, former IRS Taxpayer Advocate Nina Olson, former senior Treasury official Natasha Sarin, and others broadly agreed: It can take far more than simply growing the IRS headcount to enhance taxpayer expertise and scale back non-compliance.

That’s to not say the IRS doesn’t want extra workers. It does. Desperately. However the company by no means will remedy its many issues simply by hiring extra people.

Workers, However Extra

Its want for up to date expertise is well-documented. Rossotti, who began and ran a enterprise methods firm earlier than main the IRS, believes the company could make progress by putting in new methods even earlier than it fully replaces its decades-old core taxpayer database.

The company additionally wants a cultural makeover. A lot of its center administration is very resistant to alter, its rank-and-file workers morale is low, and its union/administration relations are poor.

Olson stated the IRS wants to think about itself primarily as an company that helps taxpayers slightly than principally an enforcer of the legislation. Nowadays, the IRS talks about “customer support.” Taxpayers, after all, will not be prospects. However extra importantly, a lot of what the company does sends very completely different alerts, from its incomprehensible notices to taxpayers to its continued self-harm by successfully forcing many filers to speak by paper.

How Tech Can Assist

In any profitable group, applicable expertise is a key to creating staff extra productive.

Right here’s one easy instance: The IRS closed examinations of about 540,000 returns from 2018. In about 70,000 of them, or roughly one out of each eight, the IRS discovered no errors. Think about if the company might successfully use machine studying to higher determine downside returns earlier than it wastes workers on these “no change” audits.

Higher computer-assisted triage might make it potential for people to give attention to true errors or fraud in a less expensive method. Tech additionally can assist confused taxpayers keep away from easy errors once they file and permit the IRS to speak electronically, which might scale back company assets now devoted to reviewing tons of paper.

The IRS nonetheless will want extra individuals to meet its promise of accelerating audit charges for high-income households and firms. And it’ll want extra knowledge scientists and laptop geeks to construct and preserve these new methods. However it could want fewer workers wielding purple pens flyspecking paper returns by hand.

Pols Arguing Head Counts

To its credit score, the company’s spending plan barely mentions head counts. Relatively it rightly focuses on the dual targets of bettering service and lowering fraud. And it lays out scores of course of modifications to get there.

However you’d by no means understand it from listening to the political debate, which seems to be occurring in some parallel universe.

This began when the Biden Treasury projected the company might rent 87,000 new workers if Congress gave it the cash it wished. That quantity was virtually actually inflated. And, worse, it turned a political present to Republicans.

They, predictably, turned the quantity right into a caricature. First, 87,000 new workers turned 87,000 income brokers (however that the overwhelming majority of recent workers will probably be answering the telephone and processing returns).

In his first speech to the Home, newly elected Speaker Kevin McCarthy (R-CA) vowed “our very first invoice will repeal the funding for 87,000 new IRS brokers.” Although most of these 87,000 new brokers have been non-existent, Home Republicans voted to repeal their funding anyway.

However the hyperbole didn’t finish there. Some within the GOP turned these 87,000 phantom new income brokers right into a spectral military of armed officers battering down the doorways of harmless, unsuspecting taxpayers.

Democrats rose to the bait and responded that extra workers was good as a result of it could goal fats cat tax cheats.

If the company is to fulfill its formidable modernization targets, it’ll want new sorts of staff. However principally it must change the best way it thinks about all of the methods it interacts with taxpayers. With out that profound change in tradition, all the brand new workers on the planet received’t assist the IRS obtain its very formidable targets.

The authors of the strategic plan appear to know that. If solely the politicians might catch up.