Published: Sep 08, 2022 4 min read
Advertising Disclosure
This article was made possible through advertising relationships with one or more of the advertisers listed on this page whose products and services we think our readers will find valuable. This article was written by our Ads team and doesn't necessarily reflect the views of Money's editorial team. Learn more about how we make money.
IRS building
Getty Images/iStockphoto

The IRS has been understaffed and short on resources according to Deputy Treasury Department Secretary, Wally Adeyemo. In an interview conducted earlier this year, he pointed out that the IRS may miss out on about $600 billion in uncollected taxes due to a lack of resources, including outdated technology.

But things are about to change.

In August, Congress passed a bill with new funding for the IRS to the tune of $80 billion over the next decade, which was signed into law. More than half of those funds have been earmarked for enforcement. This has opened up new possibilities for those who want to work for the IRS and has ordinary taxpayers wondering what’s next.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer

The following is a recap of what we may expect from the IRS and how it could potentially affect everyday taxpayers like you:

What changes may be coming to the IRS

The IRS has been struggling with budget cuts for years, and now they are getting a boost in funding.

Given that the new funds are meant for enforcement, there’s a lot of chatter about new potential audits. However, a letter written by Treasury Department Secretary, Janet Yellen, and sent to the IRS commissioner, clearly states that “households earning $400,000 per year or less will not see an increase in the chances that they are audited.”

With the influx of work coming in, the IRS is expected to hire additional employees while also investing in new IT systems to make processes more efficient.

How this could affect taxpayers

The first big change for everyday taxpayers is that the IRS may begin optimizing its customer service, particularly over the phone. According to reports, more than 2 million calls are placed to the IRS every day during tax season. During the 2022 season, only 1 out of 10 calls were actually answered.

The new funding will also address other issues that stem from being understaffed, such as processing delays. What kind of effect will this have on taxpayers remains to be seen. With that said, if there ever was a time to make sure your tax affairs are in order, that time is now.

With this new law, many taxpayers may be looking to settle overdue taxes. If you're interested in tax debt resolution services, set up a free consultation with our featured partner, Anthem Tax Services. Their experience reducing owed taxes has made them a leader in their industry.

What happens now

The short answer is no one knows. As with any new development inside a government bureau, time will tell.

According to Secretary Yellen, the IRS should modernize its computer systems and ensure it has an adequately-staffed workforce by investing in and training employees. This gradual influx in personnel may have an impact on the 2023 tax season.

While it’s best not to speculate in regard to long-term implications, the IRS is likely to start going after a larger portion of the estimated $600 billion in uncollected taxes.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Need help settling unpaid taxes? Set up a free consultation today.
Click on your state to get started!
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Get Quote