The entire IRS has seen a similar shift. As a result, training has become less effective, IRS employees told us, and the thoroughness of audits has diminished. It’s also made the IRS a worse place to work.
“The last time I was aware of hiring,” says Marie Allen, who retired in 2016 after a 32-year career at the IRS that included time auditing wealthy taxpayers, “I saw the young, angel, baby-faced agents coming in. They were told to sit down in a cubicle, given a computer, and told, ‘This is your training.’” A couple of trainees decided to quit rather than suffer through weeks more of this, she says. “So we lost young talent by basically boring them to death.”
Even established employees can feel themselves falling behind, making it harder to match up against sophisticated opponents. “We’re staying stagnant in what we know,” says an IRS employee who works on audits of corporations. Add to that the pressure to close audits as quickly as possible, and auditors often feel like they are rushing past signs of suspicious activity. “All I have time for is low-hanging fruit, basically,” the employee says. “It’s not only not fair to American taxpayers, it’s not very satisfying for me, either.”
As time went on, Reicks said, the IRS was able to undertake fewer and fewer audits of offshore accounts. Given a list of American accounts in a tax haven, the IRS would often be able to audit only 10 to 15 percent of them, she remembered. That meant the agency was not able to adequately pursue tens of thousands of people who had kept their bank accounts secret from the U.S. government.
In 2015, shortly after congressional Republicans forced the sudden $350 million cut that so upset Koskinen, Reicks began a new stage of her career. To prepare its managers for possible elevation to the executive level, the IRS puts them in temporary assignments. Over the course of a couple years, Reicks would get a different job every three to six months. But while the type of work changed at each assignment, the basic problem she faced did not: There weren’t enough people to do the work.
Her final assignment put her in charge of exam activities at two of the IRS’s “campuses” in the northeast. At the campuses, in row upon row of cubicles, thousands of tax examiners and customer-service representatives review correspondence and answer phone calls from taxpayers.
Employees, Reicks said, constantly asked whether the IRS was going to hire more workers. With no good news to report, the best Reicks could do was assure them that they were responsible only for the work assigned to them, not for the work the IRS should be doing. “I get that the four desks around you are all empty,” she remembered saying. “This is what we have. We will adjust the workload accordingly.”
Lacking staff, the IRS has shrunk programs—even those that brought in billions. One such casualty: pursuing taxpayers who do not bother to file tax returns. Tracking those people and businesses down, determining what they owe, and then reviewing what they submit in response is time-consuming. “Why generate new work when we don’t have the resources to do the work we have right now?” asks Shantelle Kitchen-Nelson, who managed a collections campus in Philadelphia in 2017 and recently retired.