The Internal Revenue Service said Monday it would immediately stop the practice of sending agents to make surprise visits to homes and businesses, curtailing a policy that for decades has been central to its efforts to collect unpaid taxes amid political backlash and growing threats to its employees.
The change comes as the IRS embarks on a multi-million dollar modernization project that aims to update technology, increase tax code enforcement and improve 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 say its tactics are too aggressive.
“We are reviewing how the IRS operates to better serve taxpayers and the nation, and making this change is a common sense step,” IRS Commissioner Daniel Werfel said in a statement. “Changing this long-standing procedure will increase confidence in our tax administration work and improve overall security for taxpayers and IRS employees.”
Mr. Werfel, speaking to reporters, described the new approach as part of the agency’s transformation, which aims to use IRS resources more efficiently and work more constructively with taxpayers. Mr. Werfel, who has been in office for four months, said he wanted to end the public perception that IRS employees go door-to-door to collect taxes.
The agency has been trying to cast a more customer-centric approach to taxpayers, while Republicans have been stoking fears that the tax collector is hiring an army of 87,000 new agents to shake up small businesses and the middle class. Antipathy toward the IRS has made the job of its agents more dangerous; last year, the agency launched a comprehensive security review after misinformation and false posts on social media led to targeted threats at employees.
The IRS said Monday that unannounced visits would continue only in a few “unique” circumstances and would generally be replaced with letters sent through the mail to schedule meetings. Mr. Werfel said the in-person visits were typically used to collect tax debts of more than $100,000 and were used to show that the agency was closely following taxpayer cases. Under the new system, taxpayers who ignore written correspondence from the IRS could eventually face penalties or liens on their property.
The agency typically makes tens of thousands of unannounced visits to homes and businesses each year and will continue to do so only in cases involving subpoenas and summonses or the seizure of property. Those kinds of cases typically happen less than a few hundred times a year, the IRS said.
It employs about 2,000 unarmed revenue officers who usually make unannounced visits to discuss taxes owed or missing returns. Sometimes they make unannounced visits if they think a business might be falling behind on payroll tax withholding or collecting a debt.
The IRS criminal investigation unit, which employs armed agents who visit homes and businesses, will not be affected by the policy change for revenue officers.
Republicans have made it a priority to impede the Biden administration’s plans to bolster the IRS with $80 billion awarded to it as part of the Cut Inflation Act last year. They successfully cut $1.4 billion from agency funding in debt limit legislation Congress passed in June and reached an agreement to recoup another $20 billion as part of the final budget deal lawmakers are expected to pass this year.
In recent months, lawmakers and anti-tax groups like Americans for Tax Reform have been raising questions about unannounced visits by IRS agents. As examples of overreach, they have pointed to a June raid on a gun store in Montana: where agents seized personal information from gun owners and buyers — and an April visit by agents to the Florida offices of investor Jeffrey Gundlach, who was apparently the result of a clerical error.
Mr Werfel suggested that ending unannounced visits was a response to the prevalence of scammers posing as agents. He said this had created additional anxiety for taxpayers and more stress for revenue officials.
“We have the tools we need to successfully raise revenue without adding stress with unannounced visits,” Mr. Werfel said, adding that improved analytics would enable the agency to meet its compliance goals. “The only losers from this policy change are scammers posing as the IRS”
The IRS commissioner said he hoped the new policy would assuage concerns about unannounced visits that have been raised by members of Congress.
The new policy is also expected to be welcomed within the IRS, where revenue officials have expressed growing concern for their safety when making visits. In some cases, agents have confronted hostile taxpayers with guns drawn.
Tony Reardon, national president of the National Union of Treasury Employees, said the decision to stop unannounced field visits was welcome.
“The safety of IRS employees is of the utmost importance,” he said, “and this decision will help protect those whose jobs have become more dangerous in recent years due to false and inflammatory rhetoric about the agency and its workforce.”