IRS to hire 3,700 new employees to audit the wealthy

The IRS said Friday it has launched a nationwide search to recruit 3,700 new employees that the tax agency said it wants to use to expand audits on the country’s wealthiest taxpayers.

Commissioner Danny Werfel said the agency is looking for high-grade revenue agents, making about $125,000 a year, who can handle the kinds of complex audits required for high-income returns.

“These new employees will be focused on higher-income and complex tax areas like partnerships, not average taxpayers making less than $400,000,” Mr. Werfel said.

The IRS is on a hiring spree after Congress last year approved tens of billions of dollars of new money for the agency over the next decade. The goal is to collect enough from taxpayers to pay for some of President Biden’s plans to address climate change.

The IRS previously hired new customer service employees, trying to fix an agency that in recent years failed to answer most taxpayer phone calls and, when it did pick up the phone, often left people on hold for up to half an hour.

After some progress this last tax season on those yardsticks, the agency is turning to the enforcement side of the ledger.

The IRS said the new hires, in addition to averaging $125,000 in salary, can get an additional $50,000 in other benefits such as student loan repayment plans, $5,000 for child care and $3,600 for mass transit expenses. The agency also said employees can telecommute.

Audits have dropped across the board, though the largest drop has been for high-income filers.

Those making $10 million or more per year were audited at a rate of just 39 per 1,000 returns in 2019, down from 212 per 1,000 returns in 2010.

The Biden administration believes the federal coffers are missing out on hundreds of billions of dollars in unpaid taxes each year, and hopes increased enforcement will collect some of that cash and spur others to pay what they owe on their own.

Mr. Werfel earlier this week announced a new “equity” approach to tax enforcement, with a new emphasis on the wealthy even as the IRS tries to reduce audit rates of low-income filers who claim the earned income tax credit.