One of the greatest weaknesses of the IRS is that it is understaffed. This persistent problem has led to lapses in tax collection and detecting fraudulent tax returns, which contributes heavily to the already increasing tax gap. In 2001, the IRS estimated the country’s tax gap to be $345 billion. According to a study, the tax gap was found to be ranging from $450 – $500 billion in 2008, and unreported income was estimated around $2 trillion.
In 2012, the IRS requested an audit by the Treasury Inspector General for Tax Administration (TIGTA) to assess actions taken by the IRS divisions to monitor and improve the efficiency of hiring new employees. The report found that “most improvements (in hiring new employees) resulted from automating time-consuming manual steps in the hiring process and monitoring in-process hiring.”
The IRS currently has around 100,000 employees. Every year, the IRS collects more than $2 trillion in taxes. Considering that around 234 million tax returns are filed each year, the number dwarfs the amount of IRS employees. Moreover, the IRS is competing against the private sector in attracting qualified employees. Speeding up the hiring process, therefore, needs to be its priority.
Due to the sudden jump in workload during the tax season, the IRS hires a large number of employees during the first quarter of the year. In 2011, the IRS hired 19,000 new employees to meet the workload of tax season, but its lengthy hiring system acts as a hurdle in hiring in time for them to be trained. The OPM (Office of Personnel Management) set a goal for new hires to be trained and ready to start in 80 days or less.
To reduce the tax gap and improve tax compliance, the IRS is not only focused on hiring new employees, but also speeding up the hiring process. The challenge before them is to detect millions of fraudulent tax returns each year with the help of automatic scanning while sending out tax refunds on time, and collecting taxes due.
According to the TIGTA report, the IRS is now hiring new employees quicker. “Filing season hiring continues, although at lower levels, and a limited number of other positions may be filled.”
Nevertheless, the IRS is on a hiring spree, getting ready to handle millions of tax returns. Tax Defense Network has also accelerated its hiring of employees to help provide tax debt resolution to taxpayers during a tax season that will surely have the IRS trying to prove its new methods in tax collection. The tax season is on, and Tax Defense Network is ready for it.