CHN’s Human Needs Watch: Tracking Hardship, May 3, 2024


May 3, 2024

May 3, 2024 

The IRS is improving edition. Back in 2022, as part of President Biden’s Inflation Reduction Act, the Internal Revenue Service received an additional $80 billion over a decade to modernize. $20 billion of that money was “clawed back” as a result of an agreement between Republicans and the White House to suspend the national debt limit and prevent the U.S. from defaulting on its financial obligations. Now some in Congress would like to see the agency’s budget shrink further, not grow. 

But the facts are in as to how the IRS is making use of its new funds – and the news is good, particularly for taxpayers with modest incomes.  

First, this year, the agency launched a pilot program known as Direct File, which allowed taxpayers to file easily and for free, instead, in some cases, of having to fork over their hard-earned dollars to companies such as H&R Block and TurboTax. 

Second, the IRS invested in modernizing its workforce – and greatly reduced a backlog in unprocessed paper tax returns. It also greatly reduced wait times for taxpayers trying to call the agency for help – although there is still progress to be made in this area. 

Third, the agency increasingly is pursuing tax cheats and making them pay their bills – earlier this year, the agency announced it already has collected hundreds of millions of dollars through this process. In previous years, lower-income people were audited disproportionately because such audits require less technical expertise and are thus easier to conduct. This meant that Black and Latino taxpayers, more likely to have low incomes, were also more likely to get audited. 

We fully expect that some in Congress this year will again go after the IRS budget – the attacks are likely to continue next Tuesday, when IRS Commissioner Danny Werfel testifies before a House subcommittee. 

We’ll be watching, well aware of the good work the new and improved IRS has accomplished.   



More than 140,000 taxpayers in 12 states this year used IRS’ Direct File to file their taxes. Tweet this.

$90 million $35 million

Overall, participants in the pilot program claimed $90 million in tax refunds and faced $35 million in tax balances due. Tweet this.

$5.6 million

The amount that participants in Direct File saved in tax preparation fees for their federal taxes. Tweet this.

13 million
2 million 

The IRS reduced its backlog of unprocessed paper tax returns from 13.1 million at the end of the 2022 filing season to 2.6 million returns at the end of the 2023 filing season. Tweet this.



In 2022, only 11% of calls to the IRS were answered; by 2023, that improved to 35%. Tweet this.


$520 million


In the past year, the IRS has collected over a half-billion dollars in taxes owed by fewer than 1,000 millionaires and billionaires, according to IRS Commissioner Werfel’s April 16 testimony to the Senate Finance Committee.





In February, the IRS began sending out compliance letters on more than 125,000 cases involving high-income taxpayers who had failed to file federal tax returns – some dating back to 2017, when former President Trump’s tax package was approved. This includes more than 25,000 mailings to those with more than $1 million in income, and over 100,000 mailings to people with incomes $400,000 and $11 million between tax years 2017 and 2021.


$100 million


President Biden’s FY 2025 proposed budget for the IRS would extend from 3 years to 6 years the statute of limitations for certain tax assessments – namely, in cases where a taxpayer omits from gross income more than $100 million on a return. This would enhance the agency’s ability to pursue tax cheats.


7 million
3 minutes


During the 2023 filing season, the IRS answered 7.7 million calls – a 65% increase compared to 2022. During that period, the average time to answer a call dropped from 28 to 3 minutes.



76/$10 billion


IRS has launched audits of 76 of the largest partnerships, with average assets of $10 billion that represent a cross section of industries including hedge funds, real estate investment partnerships, publicly traded partnerships, large law firms and other industries. The IRS is also launching audits of the 60 largest corporate taxpayers, with average assets of $24 billion. 





Inflation Reduction Act
IRS Direct File