IRS Commissioner Daniel Werfel and National Taxpayer Advocate Erin Collins updated tax professionals on the enhancements the IRS has been making as a result of the billions of dollars allocated to it by the Inflation Reduction Act during the AICPA & CIMA National Tax and Sophisticated Tax Conference in Washington, Accounting Today reported.

"Going back to what an underfunded IRS versus a funded IRS means, an underfunded IRS is on its heels," Werfel told the IRS Update session of the conference. "The best we can do is potentially tweet out a warning. A funded IRS can be proactive, step in, lean in and disrupt scams, give taxpayers new tools, so that they can have visibility into when they're being scammed or not."

He added, "I think more people need to hear this basic choice that we have: the choice between an accessible IRS, the choice between an IRS that can figure out the balance due on our complicated returns, the choice for an IRS that can lean in and be proactive in disrupting scams and protecting victims. These don't seem to me to be overly political objectives. This does not in any way seem to be, in my opinion, a nefarious agenda. It's a good agenda, and it is our agenda."

Werfel pointed to recent improvements at the agency in its phone lines, but acknowledged that the IRS has more work to do on certain parts of them. But he said that he is encouraged by the hiring of 5,000 customer service representatives last year.

He also told the conference that the IRS has been investing in technology in its call centers and is using the extra funding to leverage that technology.

He also spoke about improvements in the IRS's online accounts for tax professionals and individual taxpayers, saying, "We're making improvements to the tax pro online accounts so that you can view payment activity and taxpayer balance due,. We have an individual online account. We're trying to make advances there. Each filing season, you and others should come back to the IRS and say, it's different. It's better, it's improving."

Collins noted the improvements in phone service. Approximately 282 million calls came in about two years ago, then dropped down to 172 million calls. This year, it was at a more normal level of around 90 million calls but, because many of the customer service representatives were also assigned to process returns to reduce the backlog, that led to longer wait times in some areas.

Werfel also noted that the IRS has also been making improvements in its online accounts for tax professionals as well as online accounts for individual taxpayers.

"We've all struggled in the last three years—your clients, taxpayers, practitioners, IRS employees, and even my TAS employees," Collins told the attendees. "It has been a tough three years. I don't think we have to tell anybody how difficult all your struggles have been. But I do appreciate what you have done.”

Collins said she believed that the paper backlog was one of the main challenges for the IRS, but that she saw a decrease in the backlog of returns this year to a more typical time frame, with paper-filed returns being processed in about six weeks and the backlog down to about 200,000 paper returns.

To learn about what types of returns are selected for examination and ways to help clients survive an IRS audit, attend the Foundation for Accounting Education’s IRS Tax Examinations and Hot Issues Webinar on Nov. 20.