IRA is effective now. New funding will allow for tech modernization and hiring that overcome historical inefficiencies.

The Inflation Reduction Act would provide nearly $80 billion to the IRS over 10 years, in addition to the money the agency normally receives from Congress on an annual basis. The IRS received nearly $12.6 billion for fiscal year 2022. The new funding would result in a more than 50% increase in IRS funding adjusted for inflation, Holtzblatt said. The $80 billion would be spread across four different areas of the IRS over the next decade. More than half, about $45.6 billion, would go toward strengthening enforcement activities – including collecting taxes owed, providing legal support, conducting criminal investigations and providing digital asset monitoring, according to the bill text. More than $25 billion would be allocated to support IRS operations, including expenses like rent payments, printing, postage and telecommunications. Nearly $4.8 billion would be used for modernizing the agency’s customer service technology, like developing a callback service. Roughly $3 billion would be allocated for taxpayer assistance, filing and account services. How many new auditors could be hired? The Republican National Committee and several Republican lawmakers have criticized the new IRS funding, claiming that it will provide the agency with an “army of 87,000 new IRS agents.” But that number is misleading. The Treasury Department did estimate in 2021 that a nearly $80 billion investment in the IRS could allow the agency to hire 86,852 full-time employees over the course of a decade. But that figure accounts for all workers, not solely enforcement agents. Still, hiring more than 86,000 workers over 10 years could be a huge increase for the IRS, which currently has nearly 80,000 employees. But the number of IRS staff has declined over the past decade, currently standing at 1970s levels, and the agency is expected to keep losing people. Earlier this year, Rettig told lawmakers that the IRS would need to hire 52,000 people over the next six years just to maintain current staffing levels to replace those who retire or otherwise leave. The Inflation Reduction Act does not instruct the IRS to hire a certain number of enforcement agents, and the agency would need to decide on staffing plans. “The resources to modernize the IRS will be used for sorely needed improvements to taxpayer services – from answering the phones to improving 1960s-era IT systems – and to crack down on wealthy and corporate tax evaders who cost the American people hundreds of billions of dollars each year,” Natasha Sarin, Treasury Department counselor for tax policy and implementation, said in a statement sent to CNN.