Memo – IRS Hiring 82,000 New Agents! A CPA’s Perspective

Any Questions or Concerns about being audited right now? Stop reading and call me on (732) 673-0510.

To listen to the podcast version of memo click here —> Podcast Version

NO! The IRS is not hiring 87,000 gun carrying agents!

Some IRS Agents, in the criminal division, have always carried weapons as they should. I have worked with them. The IRS is not looking to hire 87k new officers who will carry guns. Here are some important facts. Please help stop the hysteria caused by the MSM. IRS Criminal Investigation (CI) is comprised of nearly 3,500 employees worldwide, approximately 2,500 of whom are special agents whose investigative jurisdiction includes tax, money laundering and Bank Secrecy Act laws. While other federal agencies also have investigative jurisdiction for money laundering and some bank secrecy act violations, IRS is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code.

I want to start out by saying that I want more adequately trained IRS Agents and more customer service personnel. It is a nightmare for my team to rectify even the simplest issues with the current state of the IRS. The IRS employees are great, but their systems are inadequate.

There has been much talk lately about the IRS getting funding to hire 82,000 more employees. Remember, that is employees, not the dreaded IRS agents we all have nightmares about knocking on our doors in the middle of the night.  (Some reports say 80,000 and some say 87,000). I am going with 82,000 for this memo.

Nothing has stricken fear in people’s hearts more than this possibility. “The Virus of Unknown Origin” was a sniffle compared to the reactions people are having about this possible IRS hiring spree.

But, what does it really mean? How many IRS employees are there today? How many of those are involved in the IRS Audit everyone fears?

The mainstream media as usual has reported just enough information to bring on hysteria. I wish people would finally realize what the mainstream media actually is. But that is a podcast for another day.

Below you will see, or on your screen you will see, if you are listening to this, the current breakdown of some of the IRS employees by job title or department.

I highlighted in green the job titles that are actively involved in auditing and they total 17,079. Revenue Agents (8,321) actually go into the field to audit taxpayers, and Tax Examiners (8,758) stay in their offices and review requested information received in the mail or via fax.

The grand total IRS employee count is 78,661, so the % of them working on audits is 21.7% (17,079 / 78,661).

How many returns are actually audited each year. What % are audited?

Less than ½ of 1% of returns are audited each year. 0.41% to be exact. This is a relatively low %.

Ok, so we have 17,079 IRS Employees running the audits of .41% of all the tax returns filed.

I wanted to give this preliminary information as they give vital context to this discussion.

The plan is that the IRS is going to hire 82,000 new employees. More than doubling their current staff. Let’s discuss that strategy.

Within the companies you work, how long would it take to train the new staff if it suddenly doubled? Did I hear a few of you whisper “not possible?” Those that did are correct!.

Let’s be more specific. We have 17,079 audit related agents who are going to train 82,000 more?

It would not be possible for any organization to double in size rapidly, and have all the new employees trained in highly specialized tasks.

So let’s think practically about how many new IRS Audit related staff could be hired and trained and in what amount of time.

We have the 17,079 audit related agents previously discussed.

How many of them could be available and have the skill to train new ones?

My best guess is 2,000. This eliminates many senior managers and lower level workers who wouldn’t, or couldn’t, train anyone new.

So how many new auditors could 2,000 people train? I estimate that it would take 2 years to train a new candidate and each of the 2,000 agents charged with training them could take on and mentor 3 people over those two years.

That equates to 6,000 new agents ready to audit in two years. So that would be a 35% (6,000/ 17,079) increase in audit activity, or .5535 (still less than 1%) of returns being audited.

But this calculation assumes that many things go right. It is probably overstated for the following reasons, the main one being people interested in working at all, and especially interested in working at the IRS. 

1. The Great Resignation. Unemployment is at an all time low. Companies paying top dollar with a great work environment and fulfilling jobs can’t find workers. Raise your hand if you believe the IRS will pay enough and provide enough job satisfaction to take employees away from the large corporate competition. I don’t see any hands raised and I agree with you.
   1. A job at the IRS cannot compete with a comfy couch, XBox Live, and unlimited Door Dash.
2. Today’s young people are looking for open and free work environments that match their lifestyle and mindsets and provide flexibility. Today’s graduates want safe spaces, no criticism of their work and nights and weekends off.  The IRS will provide none of these. 
3. The number of college graduates with technical degrees has been declining. The IRS wants to hire people who can evaluate numbers and deep scenarios and connections.
   1. A GS-7, is an IRS employee designation. In order to be an IRS field agent who can perform audits or examinations, you need to be a GS-7. (I am summarizing here directly from the IRS website.) GS-7’s must meet the GS-5s requirements first.
      1. GS-5 and Above
         1. A bachelor’s degree or higher in accounting from an accredited college or university that included at least 30 semester hours in accounting, OR
         2. You are a licensed CPA in the USA.
      2. Additional Requirements for Grade GS-7
         1. You must meet the GS-5 qualifications and one of the following requirements:
            1.  A bachelor’s degree with either a 3.0 (“B”) GPA overall or 3.5 (“B+”) on a 4.0 scale in all accounting courses. 

The number of candidates who meet the above criteria is incredibly low.

My fear is that the IRS will lower the bar at some point, and use social justice hiring standards instead of merit, to meet hiring quotas. They will not offer competitive salaries and benefits that other companies do, and so the best talent will work elsewhere.

This might lead to the hiring of dead weight just to meet hiring goals. So imagine 82,000 newly hired, not adequately educated, IRS agents, with no one to train them, and who are almost impossible to fire. These candidates will not have the ability to perform these important jobs. Most likely this will cause a reduction in IRS audits and overall customer service. Many of these new hires could come from the fringe of the social justice crowd, and we know how they love to follow rules and make any place they occupy pleasant, calm and productive.

If the IRS gets a blank check with no oversight, it actually could be doomed, which might be the silent plan. It doesn’t take long for excess ballast to sink a ship.

We haven’t even touched on the other 78.3%, or 64,000 remaining new IRS hires in other departments,  

Remember, all of these government employees work directly for us and we must demand excellence. 

Please call all of your federal elected officials and demand a comprehensive plan be presented to the American people prior to the IRS getting a dollar of this money.

Questions? Concerns? Call me on (732) 673-0510.