The Internal Revenue Service (IRS) is working to hire more employees in areas ranging from tax enforcement to customer service amid struggles stemming from staffing shortages.
In August 2022, the Inflation Reduction Act allocated about $80 billion in funding to the agency. The White House has said that number was reduced to about $60 billion as part of the 2023 agreement to suspend the nation’s debt limit.
Since the Inflation Reduction Act was passed, the IRS has repeatedly said it will not use the added funding to hire tens of thousands of new agents tasked with increasing middle-class audits.
But recent posts circulating on social media claim the head of the agency has now admitted that audits will increase for Americans earning less than $400,000 per year.
THE QUESTION
Did IRS Commissioner Werfel admit that audits will increase for Americans earning less than $400,000 a year?
THE SOURCES
THE ANSWER
No, IRS Commissioner Werfel did not admit that audits will increase for Americans earning less than $400,000 a year.
WHAT WE FOUND
The online claims stem from IRS Commissioner Danny Werfel’s testimony during a hearing before two House subcommittees on Oct. 24. C-SPAN posted a video of the hearing on its website.
But Werfel didn’t say during the hearing that the IRS would increase audits for Americans making under $400,000 per year.
Instead, he reaffirmed the agency’s commitment to not increase audit rates for people in this income group.
During the hearing, Rep. Virginia Foxx (R-N.C.) asked Werfel if he would guarantee the IRS won’t increase audits of people earning less than $400,000 per year.
In response, Werfel said, “That is my marching order to the IRS and, if we fall short of that, I will be held accountable for it.”
Werfel also told Foxx the agency is planning to hire customer service representatives and accountants – not just tax enforcement agents – over the next several years.
A spokesperson for the IRS told VERIFY that claims “suggesting audit rates will increase on those earning less than $400,000 are absolutely inaccurate.”
“IRS Commissioner Danny Werfel has repeatedly made this commitment, including at last week’s hearing,” the spokesperson said.
Here’s a full transcript of the exchange between Foxx and Werfel that begins at about 1 hour and 16 minutes into the video on C-SPAN’s website.
Rep. Foxx: “The so-called Inflation Reduction Act gave the IRS an additional $80 billion in funding and you’ve been talking about that. I think we can all agree that that’s an incredible amount of money, right? That’s a lot of money, isn’t it?
Commissioner Werfel: "It is.”
Rep. Foxx: Even after Congress trimmed this amount down to nearly $60 billion in the Fiscal Responsibility Act, how many new agents does the IRS plan to hire?”
Commissioner Werfel: “We’re hiring not just agents. We’re hiring customer service reps, accountants, agents. We have published our 3-year view of staffing, which I’m very confident on because I can make key assumptions about needs and market trends. We are at 90,000 today, and I think over the next three years we should be over 100,000 but not much over 100,000.”
Rep. Foxx: “How many tax enforcement agents out of the ones that you’ve planned to hire would there be in that 3-year plan?”
Commissioner Werfel: “We should be hiring about 8,000 total, if I’m reading my charts correctly, by the end of 2025.”
Rep. Foxx: “You’ve previously stated the IRS would not target taxpayers earning below $400,000 per year. How can we be sure that the new IRS agents and tax enforcement resources will not go to targeting middle-class taxpayers and small businesses?”
Commissioner Werfel: “I appreciate the question. We publish our audit rates each year and you can assess those audit rates by income level, so it’s a very transparent way of being held accountable that the audit rate for people earning less than $400,000 will not increase.”
Rep. Foxx: “So you are guaranteeing that you will not increase the number of audits of people making less than $400,000 a year?”
Commissioner Werfel: “That is my marching order to the IRS. And, if we fall short of that, I will be held accountable for it. But we will publish those rates.”
Werfel also committed to not increasing audit rates for people making less than $400,000 in his written testimony for the House subcommittees on Oct. 24.
“Along with improving the taxpayer experience, another component of our Strategic Operating Plan involves enhancing enforcement to ensure fairness in tax administration and address the tax gap. We are making broad efforts to overhaul compliance activities in a manner that robustly advances our commitment to fair, equitable and effective tax administration,” the written testimony reads. “In conducting these enforcement activities, we are committed to following the Treasury Department's directive not to increase audit rates relative to historical levels for small businesses and households earning $400,000 per year or less.”
