The Internal Revenue Service said Monday it will curb the practice of sending agents to make surprise visits to homes and businesses, curbing a policy that has for decades been central to its efforts to collect unpaid taxes amid a political backlash and mounting threats to its employees.
The change comes as the IRS embarks on a multibillion-dollar modernization project aimed at upgrading technology, ramping up tax law enforcement and improving customer service. It also coincides with increased scrutiny of the tax collection agency, which has faced criticism from Republicans over perceptions of political bias and from taxpayers who claim its tactics are overly aggressive.
“We are taking a fresh look at how the IRS can better serve taxpayers and the nation, and making this change is a logical step,” IRS Commissioner Daniel Werfel said in a statement. “Changing this longstanding procedure will increase confidence in the work of our tax administration and improve public safety for taxpayers and IRS employees.”
The agency was trying to showcase a more customer-centric approach to taxpayers while Republicans were raising concerns that the tax collector was hiring an army of 87,000 new agents to destabilize small businesses and the middle class. Hatred of the IRS has made its agents’ work even more dangerous. Last year, the agency began a comprehensive security review after misinformation and false posts on social media led to threats to employees.
The IRS said Monday that unannounced visits will only continue in a few “unique” circumstances and that they will generally be replaced by mailings to schedule meetings.
The agency typically conducts tens of thousands of unannounced visits to homes and businesses each year and will continue to do so only in cases involving subpoenas and subpoenas or forfeiture of assets. The IRS said these types of situations usually happen less than a few hundred times a year.
It employs about 2,000 Unarmed revenue officers who usually make unannounced visits to discuss taxes owed or lost revenue. Sometimes they visit without warning if they think the company may be behind on business taxes withheld or to collect debts.
Republicans have made it a priority to block the Biden administration’s plans to boost the IRS with $80 billion awarded as part of the Inflation Reduction Act last year. They succeeded in cutting $1.4 billion in the agency’s funding in debt-limit legislation that Congress passed in June and reached an agreement to recover another $20 billion as part of the final budget agreement that lawmakers are expected to pass this year.
In recent months, lawmakers and anti-tax groups like Americans for Tax Reform have raised questions about unannounced visits by IRS agents. As examples of transgression, they cite a June raid on a gun store in Montana— The agents seized the personal information of gun owners and buyers —and the agents’ April visit to investor Jeffrey Gundlach’s Florida offices, which were apparently result of a typing error.
Mr. Werfel indicated that ending unannounced visits was a response to the proliferation of scammers posing as customers. He said this created additional anxiety for taxpayers and more pressure on revenue officials.
“We have the tools we need to successfully raise revenue without adding pressure with unannounced traffic,” Mr. Werfel said, adding that improved analytics will allow the agency to reach its compliance targets. The only losers with this policy change are crooks posing as the IRS.
Tony Reardon, national president of the National Treasury Employees Union, said the decision to stop unannounced field visits is a welcome one.
“The safety of IRS employees is of the utmost importance, and this decision will help protect those whose jobs have only become more dangerous in recent years because of false and inflammatory rhetoric about the agency and its work force,” he said.