The IRS Is Hiring 4,000 New Employees. Here's What It Could Mean for Taxpayers

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KEY POINTS

  • The IRS has been sorely understaffed for years.
  • Recent funding has made it so the agency can ramp up its staff and provide better service to taxpayers.


You might soon have an easier time reaching an IRS agent.

If you've tried to get a hold of the IRS by phone over the past number of months, there's a good chance you never actually managed to speak to a live person. The IRS has been grossly understaffed for years, especially in the customer service department. And so it's not uncommon for taxpayers who call the agency with questions to experience unreasonably long wait times.

But soon, that may be changing. The IRS recently hired 4,000 new customer service representatives ahead of the 2023 tax-filing season. In the coming months, those who attempt to contact the IRS might have an easier time doing so.

A much-needed boost in staffing

There's a reason calling the IRS has been such a frustrating experience for taxpayers. It's the same reason why the IRS has been so slow to process physical tax returns it's received over the past couple of years. The agency hasn't had enough workers, largely due to budgetary constraints.

But that's all changing. The recently passed Inflation Reduction Act included $80 billion in funding for the IRS. And a big chunk of that money is being allocated to ramping up hiring.

Meanwhile, the 4,000 new IRS employees who were hired over the past few months have been trained to assist taxpayers who call in with questions. The IRS also plans to hire an additional 1,000 customer service representatives by the end of the year.

All told, come Presidents Day 2023, the agency should have a lot more hands on deck to handle taxpayer calls and issues. And that's important, because February is when the tax-filing season tends to kick into gear, and it's also when call volume into the IRS tends to be the highest.

Will more IRS employees mean more audits?

The fact that the IRS is bringing more workers in to assist taxpayers is a good thing. Not only might that make the process of getting answers less painful, but it might allow for the faster processing of non-electronically filed returns.

In fact, as of Oct. 14, the IRS still had 5.1 million unprocessed tax returns it received in 2022. The sooner the agency is able to get through that batch, the sooner those awaiting a refund should see that money hit their bank accounts.

Of course, the fear is that an uptick in IRS staffing will lead to additional audit activity. And the $80 billion the IRS is getting under the Inflation Reduction Act does include money earmarked for enforcement. But the IRS has also pledged not to increase audit rates for average taxpayers, so anyone who reports an average income shouldn't have to worry about their return getting further scrutinized.

Should higher earners be worried? That's a different question. Audit rates have the potential to increase among those reporting an income that's well above average. But ultimately, there's no need to panic. Taxpayers who are honest on their returns don't stand to get into trouble, even if audit activity does pick up.

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