The IRS faces challenges in recruitment, training and retention of employees to replace the increasing number of employees who are eligible to retire, according to a new report by the Treasury Inspector General for Tax Administration.

Today, the IRS has approximately 106,000 employees, including 9,100 managers, but more than half of the employees and managers have reached age 50, and 39 percent of IRS executives are already eligible for retirement, said the report. To fill the projected shortage in leadership, the IRS has stated that it must recruit one manager a day for the next 10 years. The pending loss of institutional knowledge and expertise at all levels and the challenge of retaining a highly skilled workforce increase the risk that the IRS may not be able to achieve its mission.

While the IRS has recently given increased attention to human capital issues, TIGTA believes the agency needs to move toward an agency-wide approach to human capital, balance its long-term human capital needs with daily workforce issues, evaluate the success of human capital initiatives, make adjustments as necessary, and build upon the momentum gained through the IRS’s recent emphasis on human capital issues.

“The loss of executives and other employees at the IRS as a result of retirement could threaten the IRS's ability to accomplish its mission and provide American taxpayers with the level of service they require," said TIGTA Inspector General J. Russell George in a statement. “While the IRS has recently increased its focus on workforce issues, there is a risk that it may not have the right people, in the right place, at the right time, in order to meet the challenges of its changing workforce.” 

Key IRS management officials reviewed the report prior to its issuance, according to TIGTA, and agreed with the facts and conclusions presented.

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