The IRS faces a tight Job Market and Competition for Talent as it Recruits thousands

The IRS faces a tight Job Market and Competition for Talent as it Recruits thousands

WASHINGTON – The Internal Revenue Service now has plenty of money. The next challenge is: finding people.

The tax agency received $80 billion from Congress this summer to overhaul aging computer systems and strengthen enforcement so the US collects more unpaid taxes. The Biden administration wants the IRS to provide better, more modern service and take a tougher approach to high-income families and large corporations.

To achieve the objectives, it will be necessary to fundamentally change and expand the agency from top to bottom, a transfer to be achieved and a glut of employment for years by thousands of workers after a long period of agency conviction.

Most of the employment will be specialized accountants and technical professionals, although the agency is adding lower-paid customer service workers in the short term. The IRS will need to sustain employment over several years while at the same time offsetting retirements from its aging workforce.

Treasury Secretary Janet Yellen said Thursday that taxpayers will be able to see improved service from the agency during the next filing season.


Photo:

Elizabeth Frantz for the Wall Street Journal

It will be difficult to complete the hiring, outside observers said. IRS human resources offices are understaffed, government pay scales may be limited and the tax agency is entering a historically tight labor market. The unemployment rate in the financial sector was 1.3% in August, below the overall unemployment rate of 3.7%, itself just over half a century low. The IRS’s own increased activity to increase audits will create more demand for the same skills by firms and private accounting firms.

Laurie Chamberlin, head of recruiting services at staffing firm LHH, said the IRS’s lengthy hiring process and difficulty telling its own story could cause the agency to struggle. “It’s going to be hard for the IRS to hire that many people,” she said.

Although the Biden administration has not set a specific goal for the size of the IRS over the past decade, the agency is expected to have significantly more workers. A Treasury Department proposal last year called for hiring 87,000 people by 2031. That’s more than the current IRS workforce of nearly 79,000, but some new hires will replace retirees. The final amount also depends on where Congress sets the IRS’s annual budget.

The first hires will come quickly as the IRS staffs customer service phone lines and taxpayer assistance centers for the 2023 tax filing season. Treasury Secretary Janet Yellen said Thursday that the agency aims to hire 5,000 customer service representatives, as part of an effort to use the new money to show quick results for bereaved taxpayers. Such positions are relatively easy to fill: The pool of potential call center workers is large, and the government offers competitive salaries at that level.

“While not all the improvements will be made overnight, taxpayers can expect real differences during the next filing season,” Ms. Yellen told IRS employees at a federal building in suburban Maryland.

Hiring then becomes more difficult, as most of the $80 billion is dedicated to enforcement and information technology. In those fields, top private sector performers can earn salaries several times what the government pays. This creates stiff competition for frontline tax enforcement workers, the revenue agents who carry out audits and the revenue officers who collect unpaid taxes.

The IRS staff is about to grow in offices including this facility in suburban Maryland.


Photo:

Elizabeth Frantz for the Wall Street Journal

“What can the IRS offer other than maybe a different lifestyle?” said Todd Simmens, head of the tax policy and legislative technical practice at accounting firm BDO. “It’s not very easy to find good tax people.”

For their part, government recruiters emphasize stability, reliable work hours, benefits and connections to policy issues that workers may care about such as climate change and health care.

“I’m very hopeful that they’re going to be able to identify that kind of talent and get that talent in the door,” Natasha Sarin, the Treasury Department official who oversaw the new funding, said on a radio show with recently. “Because this will be an IRS that for the first time in its history has the tools it needs to fight this David and Goliath tax battle against wealthy tax evaders and big corporations.”

Politics will continue to shape the future of the IRS, especially if Congress changes hands and Republicans try to eliminate enforcement funding or change the base budget so that the IRS must use some of the $80 billion to maintain operations instead. to expand. All Republicans voted against the new law, and Sen. Rick Scott (R., Fla.) has encouraged Americans not to take a job at the IRS.

Former IRS Commissioner Charles Rossotti, who helped build the case for more funding, said the government will struggle to attract mid-career workers rising in their fields or people focused on maximizing earnings.

To meet their employment needs, the IRS could target young workers and those approaching retirement.

The IRS might try to revive campus recruiting efforts that had been dormant while the agency was not hiring much. For young workers, the IRS could use two pitches that focus on the agency’s public service mission and its ability to offer hands-on experience that could be attractive to future employers.

The Big Four accounting firms market themselves to students at the best accounting schools in the country. Jeff Brown, dean of the business school at the University of Illinois at Urbana-Champaign, said businesses have their names on classrooms and regularly send representatives to job fairs and recruiting events on campus. The IRS is essentially invisible, he said.

“You don’t hear students talking about that as a way to start their career or as a career aspiration,” Mr Brown said.

At the end of careers, the IRS could take advantage of mandatory retirement ages at some accounting firms and hire senior experts in areas such as partnership law to finish their government careers with more regular hours.

SHARE YOUR THOUGHTS

What steps should the IRS take to attract new talent? Join the conversation below.

But even the most knowledgeable tax specialists can’t handle audits. They must be trained in government procedures, a process that takes the best IRS workers from audits to perform the training.

Because of Senate procedural constraints, the new law lacks some salary flexibility and hiring rules that IRS executives and Democrats wanted. Those changes were designed to close the gaps in the speed of hiring and compensation between the government and the private sector.

And, because the IRS hasn’t done a mass hire in a long time, it will likely have to move first to rebuild its human resources department. Staff shortages in the IRS Office of Human Capital are “one of the biggest obstacles” to agency hiring, according to Erin Collins, the national taxpayer advocate, the IRS’s internal auditor.

“The bad news is that these things have become obsolete,” said Ron Sanders, who ran the IRS under Mr. Rossotti before helping intelligence and defense agencies expand rapidly after the Sept. 11 terrorist attacks. , 2001. “They’re not things you can stand up overnight.”

Write to Richard Rubin at richard.rubin@wsj.com

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Leave a Reply

Your email address will not be published.