Yellen orders IRS to plan for distribution of new funding
Treasury Secretary Janet Yellen told the Internal Revenue Service on Wednesday to create an operational plan for distributing the coming influx of new funding to the agency allocated to it under Democrats' new tax, climate and health care bill, according to a memo obtained by Axios.
Why it matters: Yellen's directive comes just a day after the President Biden signed the landmark bill into law.
- The legislation adds about $80 billion to the IRS' budget over 10 years and will allow the agency to hire additional staff members and strengthen tax collection and enforcement on corporations and high-income earners, Axios' Jacob Knutson writes.
The big picture: In the memo, addressed to IRS Commissioner Charles Rettig, Yellen said that the new funding allows for a "monumental opportunity" to revamp the agency.
- "The work will require an all-hands-on-deck approach from the dedicated employees of the IRS," Yellen said.
- The funding should go to clearing a backlog of unprocessed tax returns, improving taxpayer services, replacing outdated technology and hiring thousands of new staffers, Yellen outlined.
- The operational plan should include details as to how funding will be spent over 10 years and metrics by which to judge progress.
- The plan, which Yellen requested be delivered to her in six months, will be crucial to "ensuring the public and Congress are able to hold the agency accountable as it pursues needed improvements," she said.
What they're saying: "The Inflation Reduction Act provides the IRS what it has needed for years — a stable stream of mandatory funding that will allow the agency to serve American taxpayers the way they deserve and to enforce the tax laws against high net-worth individuals, large corporations, and complex partnerships who today pay far less than they owe," Yellen wrote.
- The new investments will "allow the IRS to work to end the two-tiered tax system, where most Americans pay what they owe, but those at the top of the distribution often do not," she added.