In a bold move to overhaul its image and operations, IRS Commissioner Danny Werfel announced plans for the agency’s digital transformation, acknowledging its popularity among Americans. Speaking at American University, Werfel pulled no punches, even showcasing a clip from The Simpsons to drive home the point of the IRS’s less-than-stellar reputation.
Werfel’s speech highlighted the daunting challenges facing the IRS, including long wait times, inefficient return and refund processing, and a perception of being a bureaucratic behemoth. However, he expressed optimism that a digital-first approach could pave the way for significant improvements, thanks partly to funding allocated through the Inflation Reduction Act 2022.
The envisioned digital transformation aims to streamline taxpayer interactions, allowing individuals to fulfill their obligations to the IRS entirely online if they so choose. By reducing manual tasks through increased online interactions, IRS employees can focus more on providing in-person assistance to those who need it most, such as small business owners, self-employed individuals, and entrepreneurs.
Werfel emphasized the importance of leveraging digital tools to enhance enforcement efforts, particularly ensuring that wealthy taxpayers pay their fair share. This includes initiatives targeting non-filers, audits focused on high-income individuals, and efforts to combat identity theft, a pressing concern highlighted in the national taxpayer advocate’s recent report to Congress.
The commissioner underscored the IRS’s crucial role as a referee in the tax system, likening its function to that of sports referees. While acknowledging the agency’s lack of popularity, Werfel emphasized the necessity of its role in maintaining order and fairness in the tax arena.
Despite Werfel’s ambitious plans, he tempered expectations by acknowledging that the IRS is unlikely to win any popularity contests. Nevertheless, he remains steadfast in his belief that a fully digital IRS represents a significant step forward in unlocking the agency’s potential to serve taxpayers better.
In closing, Werfel emphasized embracing change and innovation to address the IRS’s longstanding challenges. He called on taxpayers to recognize the agency’s vital role in maintaining the tax system’s integrity, even if it means enduring some degree of unpopularity.
As the IRS sets its sights on a digital future, small business owners, self-employed individuals, and entrepreneurs can expect to see improvements in efficiency, accessibility, and enforcement, ultimately easing the burden of tax compliance in the coming years.
Source ( Journal of Accountancy News).
