IRS Commissioner Chuck Rettig said Thursday that his agency doesn’t have the budget or the personnel to deal with the increasingly complicated tax strategies deployed by large corporations.
“We do not have the resources to go after the bigs or the superbigs, as we refer to them, and we get outgunned routinely in that space,” Rettig told House Ways and Means Committee.
The commissioner also warned about further cuts to the IRS budget, which he said has been reduced by roughly 15% over the last decade. Rettig said that if the IRS budget were cut by 50%, as Sen. Rick Scott (R-FL) has proposed, “you might be better off and save more money by just shutting it down completely.”
Congress last week approved a $675 million, or 6%, increase in the agency’s funding, the largest in years. President Joe Biden has proposed boosting the IRS budget by $80 billion over 10 years to empower it to take on tax cheats, but that funding is part of the Build Back Better bill that has been more or less abandoned by Congress.
Taking aim at a massive backlog: Rettig said that he expects the IRS to be able to clear out its backlog from last year, which totals roughly 23 million items that need attention, from tax returns to responses to taxpayer inquiries. “If the world stays as it is as of today, we will be what we call healthy by the end of calendar year '22, and enter the '23 filing season with normal inventories — healthy through the eyes of the taxpayer,” Rettig said.
The IRS announced last week that it is hiring 10,000 workers to help address the backlog. The agency also plans to create a 700-member surge team, in addition to an existing team of 800, to work through old returns and correspondence.
A good start in 2022: Rettig told lawmakers that the current tax filing season is going well, with no major disruptions. “Through March 11, the IRS received more than 63 million individual federal tax returns and issued more than 45 million refunds totaling more than $151 billion,” he said. “Refund returns continue to be processed on a priority basis ahead of returns with a balance due or full payment of the underlying liabilities.”
