Danny Werfel understands that the IRS has a perception problem. The IRS commissioner said in a speech Monday at American University that the Service is "iconically unpopular," even playing a clip from The Simpsons to illustrate the point.

But Werfel, whose speech included video of Homer Simpson booing the IRS, believes that a more digital IRS can improve its track record of long wait times, inefficient processing of returns and refunds, and other issues that Werfel admits are "a large mountain to climb."

Werfel said that a digital transformation — courtesy of funding from the Inflation Reduction Act of 2022, P.L. 117-169 — can better serve those who need in-person help and better enforce the laws so that the wealthy pay what they owe.

"We're building an IRS where all taxpayers can meet all their responsibilities, including all interactions with the IRS from questions to payments to resolutions in a completely digital manner if they choose," Werfel said. "We're catalyzing this transformation because a digital-first IRS is a generational imperative. It's how most taxpayers want to interact with us in the 21st century."

More online interactions release IRS employees from manual duties and let them concentrate on taxpayers who need in-person help at Taxpayer Assistance Centers or at pop-up offices that the IRS sets up in rural areas, he said. It also lets the IRS concentrate on the big issues, such as working with taxpayers whose identities have been stolen, which the national taxpayer advocate listed as a major problem in her annual report to Congress earlier this year, he said.

"We have to make it that if you are unfortunately a victim of identity theft that you can get a fast resolution from the IRS and get everything sorted quickly," he said. "That's when I say that a fully digital IRS unlocks our full potential."

He outlined how the IRS has focused enforcement on high-income groups by serving notices to 125,000 people who have not filed a federal income tax return since 2017, including 25,000 with incomes over $1 million; conducting audits focused on the use of corporate jets; and collecting $520 million since mid-2023 in taxes owed by millionaires.

Still, he does not expect cheers from American taxpayers.

"I showed the video of Homer booing us because … I recognize that we are iconically unpopular across America," Werfel said, also comparing the IRS to sports referees.

"But without the referee, there's no game. It's chaos," he said. "At the end of the Super Bowl, no one's planning a parade for the referees. And that's OK."

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.