Taxpayer Assistance, Compliance, and the Internal Revenue Service

Taxes are complicated. Compliance often poses challenges. The dual pressure of insufficient funding and increased demands for its services have undermined the basic customer service and revenue-raising functions of the Internal Revenue Service (IRS). Older adults sometimes need assistance to understand complicated tax laws. Through the Tax Counseling for the Elderly program, the IRS provides grants to nonprofit organizations to offer free tax services. 

The administrative burden on taxpayers can be substantial. Some people need to file tax returns even though they do not owe taxes and simply need to recover the amount of taxes that had been withheld from their paycheck over the course of a year. 

Federal policymakers authorized an additional $80 billion investment in the IRS in 2022 to address concerns with declining customer service and enforcement capacities. This major 10-year infusion of funding should improve customer service, increase audits of high-income taxpayers and businesses, and modernize the agency's technology and facilities, including a possible IRS-run electronic tax filing system. IRS' improved functioning is estimated to raise over $200 billion, resulting in approximately $120 billion net revenue gain while saving millions for taxpayers in lower monetary and nonmonetary compliance costs.