New IRS chief takes the reins, promising an overhaul of the tax agency
Daniel Werfel, President Joe Biden's nominee to head the Internal Revenue Service, was ceremonially sworn in Tuesday during a tax season that has gone smoother for the agency than in past years.
“This is our moment in history,” he told the IRS employees assembled in the lobby of the agency’s Washington, D.C. headquarters on Tuesday afternoon.
He takes over as the 50th IRS commissioner and as the agency continues to be transformed by an $80 billion infusion from the Inflation Reduction Act over the coming decade. Werfel and Treasury Secretary Janet Yellen, who oversees the IRS and swore him in Tuesday, both promised to maximize that new money.
“As everyone in this room knows, Danny will lead the IRS through an important transition,” Yellen said Tuesday in her remarks, vowing that the boost in funds will make "the IRS into a modern, 21st century agency.”
She added that her twin goals for the years ahead are improving customer service and launching new efforts to close the tax gap so that large corporations and the wealthy pay the taxes they owe.
Catching up on a backlog
Tuesday’s event marked the beginning of Werfel’s second stint atop the IRS. He led the IRS for seven months in 2013 on an interim basis before getting the full Senate-confirmed role this time around.
So far, this year’s tax season has gone better than years past, with the agency resolving confusion around state tax rebates relatively quickly. Agency officials also regularly note this year's current response rate of 80-90% to taxpayer inquiries, well above the 15% seen during the previous filing season.
A tracker on IRS.gov offers a running tally of the returns processed and how the agency is doing so far in 2023 compared with 2022, marking a reversal from years of backlogs and frustration. The data has shown positive signs throughout the tax season, a welcome relief for taxpayers.
“As of January, the IRS had worked through more inventory in the previous 12 months than during any one-year period in history,” Yellen said Tuesday, noting the new money signed into law by President Biden helped to hire 5,000 new customer service staff.
A new ‘strategic operating plan’
During the event, Yellen and Werfel announced that the IRS will soon release its Strategic Operating Plan.
The 10-year plan includes improvements such as allowing taxpayers to securely file all documents online and new tools to download account histories, among other changes.
Werfel promised Tuesday that much more detail would be forthcoming and the overall goal was to “make a very complex tax system much easier for people.”
Yellen also touted strides the IRS has already made since the act's passage, noting the agency had been so underfunded that, until recently, it was primarily a “paper-based agency.”
But the new law has led to deep GOP suspicion of the Biden administration, with fears that the increased muscle for the IRS would lead to more burden on taxpayers and small businesses.
During his speech Tuesday — in a reference to unsubstantiated claims from some on the right that many new IRS hires would carry weapons — Werfel got a laugh from the assembled IRS employees when we said the new agents would be “armed only with calculators.”
Ben Werschkul is Washington correspondent for Yahoo Finance.
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