Page 699

Doubling the IRS? The Inflation Reduction Act contains a radical $80 billion expansion of the IRS—enough to double the size of its workforce.** Unless Congress reverses this policy, the IRS will become much more intrusive and impose still greater costs on the American people.

The Biden Administration has also sought to make the tax system’s administrative burden much worse in other ways. For example, it has proposed creating a comprehensive financial account information reporting regime that would apply to all business and personal accounts with more than $600. Banks would be required to collect the taxpayer identification numbers of and file a revised Form 1099-K for all affected payees, as well as provide additional information.** This massive increase in the scope and breadth of information reporting should be unequivocally opposed.

Management. The IRS has approximately 81,000 employees.*° Of those, only two are presidential appointments—the Commissioner and the Chief Counsel.*” As a practical matter, it is impossible for these two officials to overcome bureaucratic inertia and to implement policy changes that the IRS bureaucracy wants to impede. That is why, notwithstanding decades of sound and fury, almost nothing has changed at the IRS.

For the IRS to change and become more accountable, more transparent, and better managed, there is a need to increase the number of Presidential appointments subject to Senate confirmation, and not subject to Senate confirmation, at the IRS. At the very least, Congress should ensure that the Deputy Commissioner for Services and Enforcement, the Deputy Commissioner for Operations Support, the National Taxpayer Advocate, the Commissioner of the Wage and Investment Division, the Commissioner of the Large Business and International Division, the Commissioner of the Small Business Self-Employed Division, and the Commissioner of the Tax Exempt and Government Entities Division are presidential appointees.*®

Information Technology. Despite the investment of billions of dollars for at least two decades, IRS information technology (IT) systems remain deficient.*° The IRS inadequately protects taxpayer information, its IT systems do not adequately support operations or taxpayer services, and its matching and detection algorithms are antiquated.

These problems are not primarily about resources. The IRS has spent approximately $27 billion on IT during the past decade, with $7 billion of that designated as “development, modernization and enhancement.“*° The problem is one of management. The bureaucracy is not up to the task, and neither Congress nor a long line of IRS commissioners has forced changes.

A Deputy Commissioner for Operations Support with strong IT management skills should be appointed by the IRS Commissioner or the President (once the position is made a presidential appointment). The various subordinates to the