IRS Commissioner Says Agency Needs to Go Digital

( – IRS Commissioner Danny Werfel outlined plans for a digital revolution at the agency, envisioning a future where taxpayers can manage all interactions online. He emphasized the benefits of automation, such as faster refunds and improved accuracy, but stressed that funding from Congress is essential for this transformation to succeed.

Werfel’s vision includes a $60 billion budget allocation under the 2022 budget-climate law, which aims to revamp the IRS’s technology and expertise. He believes this investment will not only enhance taxpayer experience but also boost tax compliance efforts, yielding significant returns.

Speaking at American University’s Kogod School of Business, Werfel encouraged students to explore career opportunities at the IRS and promoted the agency’s new Direct File tool for tax returns. He recognized that the IRS has faced challenges with public perception lately. As a visual aid, he showed a video clip of Homer Simpson expressing disapproval of the IRS to emphasize this point. Despite acknowledging the IRS’s unpopular image, he expressed optimism about its future, likening public sentiment to that of a NFL referee being booed by both team’s fans.

The IRS’s digital overhaul, fueled by historic funding from the Inflation Reduction Act, is viewed as a “generational imperative” by Werfel who’s just into his first year as commissioner. With an emphasis on digitization, the agency aims to streamline taxpayer interactions and modernize its outdated technology infrastructure. However, significant challenges remain, including data cleanup and IT modernization efforts.

A recent report by the Treasury Inspector General for Tax Administration highlighted the IRS’s dependence on tech improvements to achieve its strategic objectives. While progress has been made, the agency’s modernization journey faces hurdles, such as outdated IT systems like the Individual Master File.

Werfel remains optimistic about the IRS’s modernization efforts, citing new leadership and agile approaches as catalysts for change. By prioritizing concrete taxpayer outcomes, the agency aims to deliver tangible improvements in online services, marking a shift from traditional tech-focused goals.

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