According to Law360, the Internal Revenue Service's Large Business & International division will likely hire fewer employees and suffer from a declining workforce this year as a result of delayed funding and attrition, an official said on June 2, 2022.
The IRS division won't be able to hire as many new agents as a result of agency funding being delayed in a fiscal 2022 omnibus spending package that was enacted in March, said John Hinding, director of the cross-border activities practice area for LB&I. Hinding spoke in Washington, D.C., during a conference hosted by the U.S. branch of the International Fiscal Association.
The IRS typically hires on a fiscal year basis that ends in September, which leaves little time for the agency to complete its hiring processes, Hinding said.
The failure of Senate Democrats to pass the Build Back Better Act, which passed the House of Representatives and included a bigger increase in funding for the IRS, also put a damper on hiring expectations, Hinding said.
IRS and Treasury officials, including IRS Commissioner Chuck Rettig, have urged Congress to increase funding for the tax collection agency as it grapples with a significant backlog of unprocessed tax returns and delays in agency actions.
Lawmakers have recently been enacting slight increases in the agency's budget, from $11.5 billion for fiscal 2020 to $11.9 billion for fiscal 2021. Congress also recently provided the IRS with a $12.6 billion budget for fiscal year 2022 in an omnibus spending legislation that Biden signed. That amount is an increase of $675 million over the prior year.
Rettig Has Said A Substantial Portion Of The $675 Million Funding Increase Would Go Toward Cost-Of-Living Adjustments & That The IRS Needed Multiyear Funding.
Rettig also said in April that Congress hasn't provided the IRS with the multiyear investment it needs to modernize its technology, which has been a major contributor to the significant delays that taxpayers are experiencing.
In terms of technology, Hinding said during an earlier panel Thursday that the agency and the cross-border activities practice area in particular have emphasized improving its ability to share data and analytics across divisions, and are in the early stages of learning how to best approach that issue. "We've been trying to do that, I think in earnest since we reorganized in 2016.
In Terms Of What We Can Do With Data At This Point
In Time," Hinding Said.
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