Treasury Secretary Janet L. Yellen hails significant strides in IRS modernization and inflation reduction under the Inflation Reduction Act, while voicing disagreement with Fitch's recent U.S. credit rating downgrade during a speech on August 2.
"Over the past few years, the American economy has seen a historic recovery from the depths of the pandemic downturn," Yellen said. "Over 13 million new jobs have been created since January 2021. Our unemployment rate stands at 3.6 percent – near historic lows."
Treasury Secretary Janet L. Yellen addressed the government highlighting the remarkable progress made in modernizing the Internal Revenue Service (IRS) and reducing inflation rates under the Inflation Reduction Act (IRA). Despite Fitch's recent decision to downgrade the U.S. credit rating, Secretary Yellen expressed her strong disagreement, citing the nation's robust economic recovery.
Turning to the IRS, Secretary Yellen praised its exceptional performance during the 2023 filing season. Thanks to the Inflation Reduction Act, the IRS achieved an 87 percent level of service with live assistance, significantly surpassing the previous year's 10-15 percent level. This success was bolstered by the hiring of over 5,000 new employees, substantially reducing wait times and improving service quality. In addition to enhanced phone assistance, the IRS expanded in-person support.
"We advanced our commitment to expand in-person assistance and meet taxpayers in the communities where they live," Yellen said. "In total, we served 140,000 more taxpayers in person through the end of this filing season than last year’s. We’ve opened or reopened 35 Taxpayer Assistance Centers since the passage of the law."
Yellen's most significant announcement was the "Paperless Processing" initiative. By the next filing season, taxpayers will be able to submit all correspondence, non-tax forms, and notice responses digitally, streamlining IRS operations and saving time and resources. By 2025, the IRS aims to digitally process 100 percent of tax and information returns submitted on paper, as well as half of all paper correspondence and notice responses. This transformational move towards digitalization is expected to provide a more seamless and efficient customer service experience.
Addressing the tax gap, Secretary Yellen emphasized the IRS's commitment to enforcing tax laws fairly and effectively. The IRA's investment has enabled the agency to focus on auditing wealthy individuals and large corporations, ensuring they pay their fair share of taxes. Data analytics and the hiring of top talent have enhanced enforcement capabilities and revealed significant tax evasion cases.
In conclusion, Secretary Yellen praised the IRS for its dedication to public service and acknowledged the early results of the IRA's investment in modernizing the agency. She emphasized, "Today’s announcement – and the other milestones that we’ve already reached – are a testament to what dedicated federal employees can do when they are provided the tools and resources to succeed. I am grateful to everyone at the IRS for their extraordinary dedication to public service – and their hard work in building an IRS that works for the American people."