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Hey, everyone. Thanks for joining us for this week's podcast, IRS Enforcement in 2021. We have a very special guest today. He's back. Joining us is going to be Small Business/Self-Employed Division Deputy Commissioner for Collections and Operations Support, Darren Guillot. As the SB/SE Deputy Commissioner for Collections and Operations Support, Darren provides executive leadership for over 10,000 employees. He directs the design, development, and delivery of collection programs, policy in support of comprehensive tax administration, and oversees civil investigations and enforcement affecting millions of taxpayers with delinquent accounts. In Operations Support, his responsibilities including expertise and direction for special projects, covering major segments of Small Business/Self-Employed's mission, and the division's 2.2 billion dollar budget.
He also has oversight of service-wide disaster assistance and the Fraud Enforcement Office in providing support and coordination for all IRS efforts in detecting and deterring tax fraud. You may remember we had, on an earlier podcast, Damon Rowe and Carolyn Schenck to talk about the Fraud Enforcement Office. Darren's prior positions include serving as director of the following, field collection operations, enterprise collection strategy, appeals field operations, ACA compliance strategy and policy, and Midwest-area collection. He began his IRS career as a revenue officer and holds a bachelor's degree from the University of Holy Cross. As a fellow of the Loyola University Institute of Politics, he was awarded the Certificate of Public Leadership by the Brookings Institute. Now, Darren is back at our request.
Now, in July, back in July when Darren was last here, the IRS was grappling with how to help tax payers and continue operations during what we thought was the height of the Coronavirus. Sadly, almost a year on, we're still grappling with this virus. So what are you going to do when you're still dealing with the Coronavirus? You got to get Darren Guillot back, all right? We got Darren back, and he is here, and he's going to give us the latest on the IRS perspective. So I hope you enjoy this, and I'm glad we have Darren here.
All right. So, listen, Darren, thank you for joining us again. This is, I think, your third time back on this, but there's a lot going on, obviously. The pandemic continues. Stimulus is going on. We're looking at the tax season. The last time you were here, which I think was in July, we discussed the SB/SE Focus Guide. By the way, for those of you listening, I will put a link out to that if you didn't get it from the July podcast. I'll give you a link to the SB/SE Focus Guide that the IRS put out. What I wanted to ask you is, given the fallout of the pandemic, which we had all hoped would come and then fade away, has it caused you guys to pivot away from that or adjust it? What is the current plan, or is the same plan continuing?
Eric, first, thanks for having me. Good to join you and your audience again. Just watching the news or living in your communities emphasizes the reality. COVID or the pandemic, it continues, and it continues to be a challenging time for people, for businesses, and organizations and agencies like ours. We're no exception. I don't think any of us were really expecting a pandemic when we planned for fiscal year 2020. What's been remarkable is how and how quickly we all adapted, and that's true whether we're looking at all of you in the tax community or even inside the IRS. We found ways to interact remotely, and we did it in record time. Instead of approaching all the obstacles, and there were a bunch of them, right, approaching those as a crisis, I think we gave it a stark, strategic, and a compassionate analysis, too, and we improvised. We worked the problem. I think all of us at the IRS and the tax professional community, too, I think we have a lot to be proud of.
As you're aware, with the onset of the pandemic, which was around March or April 2020, our fiscal year 2020 priorities immediately and rightfully, I think, they shifted to include the safety and the wellbeing of the public we serve as well our employees, right? But what didn't shift was our core mission and the guiding principles in that focus guide that you referred to. So I'll just address your question about the focus guide specifically for just a moment. In case some of your audience missed our podcast back in July, just a quick reminder what a focus guide is.
It's simply a plain English, two-page summary of who we are, what we plan to do, and why it's important, why it's important for the IRS, why it's important to the public, and it's all encapsulated in just two pages, no big words, no corporate speak. The design was meant to streamline the old program letters in a way that each employee in every occupation, they can see themselves and their work in what's in that document. It's a message that lays out our goals for our stakeholders, too, like all of you listening. They're firm anchors for us, for all the decisions that we make, and they allow us to keep our focus, hence the name, focus guide, even though we adjusted our day-to-day operations to meet the challenges of the Coronavirus.
So you're right, Eric, we did need to pivot, but each change remained consistent with that focus guide. Now, speaking of it, we're already in the second quarter of 2021. We just started the second quarter, right? We completed our 2021 focus guide in October, so if y'all don't have that, I'll make sure you have it to post with the podcast. It's also on irs.gov as Publication 5448. It looks remarkably similar to the 2020 guide, and it is. We laid out our important goals and our messages for our team in 2020, and we never expected that we were going to achieve all of them in just one year, whether or not there had been a pandemic. The passage of a year by itself is not a valid reason to formulate a series of new areas of focus and goals. This isn't a gimmick. We really intend to do everything you see in that focus guide, and we always expected them to take a year or two or maybe even three.
Within the environment of COVID, our FY 2021 focus guide priorities, they continue to be ... They're identical. They are these six items. Strengthening compliance activities. Well, how does that work for COVID? We're doing it virtually, a lot of it, most of it, virtually. Improving operational efficiencies. We streamlined our OIC and our installment agreement policies to make it easier for people to get some relief, and we also managed during this time to get most of our employees on telework. The third item, leveraging technology and data analytics. Our location intelligence tool, incredible tool. One of your listeners, Joan [Mockle 00:10:32], my senior advisor, this was her brainchild, and most of the IRS uses it. It's this really cool tool that shows us data updated every two weeks about the incidences of COVID mapped against bankruptcy filings mapped against unemployment rates and a whole other socioeconomic factors that help us really see what the environment looks like and zip codes in places where we might actually be going to work cases.
We also have, oh my goodness, layers upon layers of data analytics we're using to detect fraud, not just for our run-of-the-mill tax fraud but catching fraud where people are trying to take advantage of the COVID relief that's out there. The fifth item's ensuring awareness and collective understanding. I think you could probably hear that in what I just described. The final item, or the sixth item, is developing our workforce. You can just imagine, I'll talk about it a little bit more later on, Eric, but we hired over 1000 people, and we did it virtually. We have to train them. There are all these changes in the law about employers and deferring their payments, et cetera. That's just-in-time training we need to do for our employees, and we're not pulling them into a room. We got to do it virtually.
So the 2021 focus guide for small business, it's a fresh look at this fiscal year, but it isn't everything. Again, the health and safety of you the public and our employees continues to be our highest priority, and we assess every area focus with that in mind. But, and this is a big but, right, there's another item that you're well aware of, and that's the Taxpayer First Act. The IRS delivered a comprehensive report to Congress just this month, in January, for their review. We're required to do that. We're standing ready to begin a whole new year in tax administration that's taxpayer-focused, that's employee-focused, and delivered with maximum efficiencies, right? That's what we were called upon to do there.
So, with regard to the taxpayer focus, I'll just briefly talk about some of the things that you'll see in that report that was made public, again, this month. We're planning to provide interactions that are efficient, that they're personalized, they're convenient for taxpayers, and they educate them, they're informative. We have to make sure that taxpayers have the information that they need to comply with the law, that they understand it. Some of the key elements are expanding digital services, whether it's getting a power of attorney in for your listeners, whether it's setting up an installment plan or getting a secure email, delivering a seamless experience. Are you getting bumped around? Are you going to the right employee or the right place at the IRS to get what you need?
Proactive outreach and education, always big, never more important than now. We're going to make sure we're building and developing a community of partners. Part of that effort is happening at this moment as I speak with all of you. Focus strategies for reaching underserved communities, we started getting into that in 2020. We have an event called Hearing All Voices. We do these around the country in communities where there's limited English proficiency, and we cover everything the IRS is doing to make sure that they have an opportunity to hear how they can understand the tax laws and how to comply. We have other things we're doing. You're well aware of the sweeps that we do. We're going to communities where there's no IRS brick and mortar to make sure we maintain our presence there. The last item there for being taxpayer-focused is enterprise data management and advanced analytics. We're using that in a big way to help taxpayers, but a good chunk of it also helps us detect bad actors. We do that out of respect for people that do the right thing, too.
With regard to our focus on employees, being employee-focused in the Taxpayer First Act, we have to make sure that our crew's well-trained, that they're adaptable, that they're highly motivated, that they're focused on customers. The name of the law is, in fact, after all, the Taxpayer First Act. We need to make sure that our employees get comprehensive and thorough training, not just on the law but on the mechanics and attitudinally, when we talk about serving customers. Some of the key elements of that program involve streamlining our current training processes, we're going to be creating an IRS University, you'll be hearing more about that later this year, and making sure that we get annual training, effective annual training, on taxpayer rights and focusing on how we can efficiently resolve a taxpayer's dispute.
That last item about making sure we deliver our programs efficiently, well, our last major change to our organizational structure was 20 years ago, and we're modernizing our organization to a structure that better aligns with our mission and increases collaboration. How many private operations go 20 years without a major reorganization? You can see that in the report that IRS shared with Congress this month. It realizes the structure to increase consistency across compliance functions and taxpayer services. There's going to be a standalone collection operations, and there's going to be a consolidated exam operations. That's what we're proposing, anyway, where all of the exam functions are consolidated in one larger exam operation, and there's going to be a customer experience office. So this is important, and between the focus guide and the Taxpayer First Act, we're looking forward to hear back from Congress and what they think of our proposed changes. We're looking forward to 2021 and getting this done.
Yeah, no. What I hear and what's great is it seems that the IRS is becoming a little less siloed and much more broader. It kind of leads me to what I wanted to talk about next, which was the new Fraud Enforcement Office. But, Darren, to keep on this, and I think I had mentioned to you before, there's always been this sense on our side of the table that if the government could ever just get, this sounds bad, get its act together, meaning get all the information in front of it, it would get the fraudsters much more easily. Rather than exams saying one thing and they'll refer it and later we end up in collection and they maybe only see something else, that it would be great if you could literally see the entire, I don't mean to sound militaristic, the entire battlefield at once that's laid out. It sounds like more and more the government is doing that, not in a negative way, not like appeals is now going to be working in with exam, but that you're trying to get information moving across.
On that note, if you don't mind, we had Damon Rowe, who's the first Director but the new Director of the Fraud Enforcement Office, although it's not new. It's probably about a year and a half now, almost two years it's been there. And Carolyn Schenck has been on with Damon, who is National Coordinator and Chief Counsel for Criminal Cases. They talked about doing more cases, better cases, on your side, on the civil enforcement side. How has that been going? Are you finding the Fraud Enforcement Office is helping you identify more fraud cases? Because, from our perspective, CI has clearly not been asleep at the wheel while the pandemic is going on. At the end of October, I probably got five new criminal cases that came in the door. We got subpoenas on a whole host of other cases. So CI has been hard at work. From your perspective on the civil aside, to the extent you can share it, how is that working?
I cannot wait to exercise any opportunity I get, Eric, to brag about the Office of Fraud Enforcement and Fraud Counsel, Carolyn Schenck. I'm so glad you had them on the show. You're right. An office like that'sbeen around for a while. It's called the National Fraud Program. We brought Damon Rowe in to lead a standalone fraud office, that's part of my operation, but it does serve the entire IRS, back in March, in 2020. So I'm going to go through a bunch of things, not everything, in the interest of time, but just the things I'll cover that Damon and Carolyn have accomplished is phenomenal considering it's only been 10 months since they stood up the new Office of Fraud Enforcement. So that'll be a year old in March. But you're right, we've had the National Fraud Program for years.
The pandemic, obviously, that didn't come without some challenges in the fraud arena, but we began collaborating and addressing it early. We wanted to be proactive. Now, clearly, with all the assistance that was enacted to help the nation recover, the environment was absolutely right for fraudsters and bad actors to try and do their worst. But the really good thing? While we spent months providing administrative relief in the enforcement area to those who need it, we'll talk more about that stuff later, we stayed really committed to tracking down people who willfully refused to fulfill their tax obligations and those who commit tax fraud. One of the first things that the Office of Fraud Enforcement did was to incorporate ID theft and business legitimacy fraud filters into the review process, and they were trying to prevent fraud and abuse of the newly created advance credits that were designed to help employees during the pandemic.
From the second quarter of 2020 through the end of the fiscal year, right, September 30th, we protected 100 million dollars in revenue that could have gone out to bad actors. That is amazing, and that amount continues to grow. We get updates on that number every month, and we're continuing our vigilance. Beyond COVID-19, though, Office of Fraud Enforcement and Carolyn's office, the Office of Fraud Counsel, they've helped the IRS in several collection-related fraud deterrence efforts that I wanted to share with you now and that we're going to continue to prioritize in FY 21. So pyramiding employment taxes, you're right, Eric, what you've seen, this CI activity, well, we're continuing to refer to CI for fraud and DOJ for civil injunctions for relief from taxpayers to employers that are stealing payroll taxes. Something new that we came up with that Damon's helping work between collection and exam is where employers have been stealing employment taxes and benefiting personally, looking at their 1040 returns. Did they claim that income? If they didn't, we're looking at them, not just for fraud but the civil fraud penalty.
Office of Fraud Enforcement, they've been really busy the past few months also in turning the civil investigations from those high-income delinquent filer or high death sweeps into very, very well-documented potential fraud cases after they apply a really robust and comprehensive number of layers of data as part of what OFE calls Operation Surround Sound. It basically got that name because they throw everything and the kitchen sink into it. Office of Fraud Enforcement uses all of their analytical tools and data that they have to look at every possible layer about a taxpayer, not just the tax records but whether they have foreign accounts, whether they have virtual currencies, educational, lifestyle, et cetera. They war-game it also to look at whether or not the case is going to have a good appeal for the Department of Justice and conviction potential, and they do all of that before we even send those cases over to CI.
In the weeks ahead, you're going to see the next round of high death sweeps, so I can tell you that between February 1st and June, the plan is to do 10 more sweeps, high death sweeps, covering 16 states. That's even more than we did in 2020. So, as I said a year ago, a high death is not some temporary thing. It's here to stay. If you're a high-income individual and you don't file your tax return, we know who you are and it's just a matter of time. Office of Fraud Enforcement, Eric, they're also breaking some new ground. I don't know if Damon and Carolyn shared this with you when they spoke with you all, but one of the ideas that came out of field collection was to look at cases closed as currently not collectable. In addition, we're looking at offers and compromise that have already been accepted and are in solvency cases to see where taxpayers may not have been completely truthful about their income and their assets, especially looking at FATCA and virtual currency information and being pursued for either making false statements or civil fraud penalties.
Great idea, by the way. Terrific idea.
One you may not have heard of, Eric, or your audience either, something we call ghost employers. So large business international and RAAS, the Research, Applied Analytics and Statistics Office, as part of the IRS Innovation Lab, detected a significant number of businesses that they're flying under the radar by issuing W-2s to employees but they don't file 941s and they don't make federal tax deposits and they don't submit W-2s to the Social Security administration. So we found out about those cases back in February, and we've already sent a number of those cases to criminal investigation very well-developed in less than a year. Ghost employers is something that the Office of Fraud Enforcement working together with exam and collection has really been on the cutting edge, and-
So, Darren, I hate to cut you off, but I find that fascinating because ... So we do a lot of voluntary disclosure work, and I've had people come in to do voluntary disclosures who filed W-2s, gave W-2s out, 1099s, never filed them with the government, never filed 941s, and we always say, "How did the government not find this? Was the government not matching this?" You don't need to necessarily go into that, but I think it's terrific that you can because, again, it's always kind of blown me away that why didn't the IRS already know about you.
Well, Eric, you started by talking about some of the great things that you thought about the Office of Fraud Enforcement and taking a comprehensive look across the service. They're clearly doing that. I've just shared a few of the things that OFE is spearheading and coordinating together with collection, together with exam, but they don't stop. They're constantly thinking about what's next. I've never seen this much imagination and proliferation of new ideas on the civil side since I've worked here. What they're doing using data analytics has just been astounding. Everyone's getting active in this effort, too, field collection, the specialty offers and compromise, the solvency office. We're taking a fresh look at bankruptcy fraud to make sure we're not missing anything there, very involved.
They're also procuring the latest technology for us and making sure we have new tools. They just offered training on detection of virtual currency and how to value it. Carolyn Schenck and her attorneys, they've been war-gaming all of this, too, to make sure that we don't waste CI or Department of Justice time with cases that have limited potential for prosecution. Bottom line is it's every civil investigator's job here at the IRS, whether it's collection or exam, to be on the lookout for potential fraud, you just suggested that, and develop it every single time they see it. We are promoting a culture of fraud identification and mitigation throughout the IRS, not just SB/SE, TE/GE, LB&I, Wage and Investment, everywhere.
What the Office of Fraud Enforcement has given us is a very successful and a very fast laboratory, a fully-staffed one, I might add, that assists our employees develop cases, deploying and acquiring new tools to give us a cutting-edge analytics, and a factory of imagineers, as I like to think of them. They're constantly thinking like criminals to stop the next scheme. In the weeks and months ahead, I think you're going to see even more, so stay tuned.
No, I think it's very exciting. In fact, now that I'm thinking about this, I think we got to get Damon and Carolyn back on the program. Darren, to move onto a topic that is near and dear to my heart, and to give you a little background on this, I think it was November, December, around there, the IRS finally sent out CP504s. Now, for those of you listening who don't know what that is, it's a notice of intent to levy. In other words, the client has ignored the billing notice, they've not contacted the government to do anything or arrange to work out some arrangement on the back tax debt, and sometimes it's done just to refresh a case, saying, "Hey, you're no longer in uncollectable status. Call us."
Well, we got, I don't even know, 50, 60 of them. Darren, I took them, I stacked them up on the desk, and I took a photo of it and posted it on social media, saying, "Hey, if you've been hiding, the IRS isn't asleep here. The CP504s just arrived. Now would be a great time to come in and work out an arrangement, all right? The government's not on vacation here." Well, Paul Mamo saw that posting and sent me an email with that picture with one line, which said, "Eric, you're welcome." So I'm happy that we're going to see enforcement because, Darren, from our perspective, it's been a little frustrating. The accountants who listen to us say, "Hey, you've got these balances, you stopped paying way back, contact the government, do an offer, you're uncollectable, whatever," and we're getting kind of this, "Yeah, but they're not doing anything."
Darren, in a way, it's almost like when the original offshore program started back in '09 for the offshore voluntary disclosure for the foreign bank accounts. I was on a panel with ... Actually, it was Frank Agostino. What was interesting is both Frank and I were getting from clients, "Yeah, but they're not enforcing this. No one's going to jail for this. Why come forward? Why do anything?" It's not quite the same, but it's almost like that. It's like because you guys, which I think was the right thing to do, stepped back during the height of the pandemic back in the spring, that you're not going to bring the hammer down and make it worse for people that are already struggling, that there's now become this sort of an attitude of, "Well, the government's not doing anything. So let's just sit here, let the statute keep running, and see what happens."
Again, I don't know where you are in this planning, if you have a date certain or if you can discuss it, but do you have a sense on when we might see IRS enforcement globally? You talked about this in July, if there are specific incidences, if the CSET is going to run or you become aware of what looked like fraudulent conveyances of assets out, that revenue officers will still do what they need to do. But for the most part, you've kind of laid off on the worst of ... Basically, let's cut to the chase. You're not really levying globally. When do you think that you guys will ... At some point, you're going to have to go back to enforcement. At what point do you think that we might start seeing that?
So that's something we're actively looking at right now, Eric. One thing I think all your listeners have to ... I'm sure you understand. I mean, we all live in our communities. You see businesses that are closed. They're either not operating, they're partially operating, people are unemployed or they're partially employed, and there's stimulus payments that are going out that are designed to help people keep a roof over their head, right, help them keep their head above water and meet their payments. At the very beginning, right, we talked about the focus guide, being externally aware and taxpayer-focused. That's not just a gimmick. Those aren't just words. We really mean that stuff. So what you've seen from us since March, since April, is a cognizance that we have a duty as public servants. We're public servants first, right, and we're essentially a law enforcement agency, too. We also serve the public by making sure people who don't comply with the law have consequences or we get them into compliance in the interest of the 84% who always do the right thing.
I would say we don't want to turn on enforcement to a level where we might grab somebody's stimulus payment or we cause people to live under a bridge. We're never going to do that, not purposely anyway, and hopefully not even accidentally. We want to know if we're causing a hardship. We care about that. Clearly, [inaudible 00:33:18] cares about it, and we'll do the right thing if we find out there's been something we didn't expect to happen because we took enforcement. Because we don't cause people, I hate to use that analogy, but to sleep under a bridge. That's not going to happen. I realize I'm preaching to the choir when I say enforcement is critical to ensure fairness in the tax system. But like I said, for taxpayers who exercise the best efforts to file and pay, enter into agreements, et cetera, they deserve to know the IRS is aggressively pursuing those that failed to satisfy their filing and payment obligations.
We've been extremely active in the enforcement area. It's true across our agency. In addition to the wide variety of relief efforts I may mention in just a moment that affected our field contacts and our enforcement actions, we did have to temporarily reduce our operations. Notice I said temporary, though. We didn't completely stop. We continued, although limited, as you mentioned earlier. We took enforcement actions when it was appropriate while complying with all the CDC guidelines, things like seizures, jeopardy seizures, for instance. Suits, we continue to pursue those. Criminal referrals for FY 2020 for collection were almost the same as they were for FY 19. Sales of seized property, summonses when they had to be issued, that stuff continued and never stopped, but they were reviewed to ensure they were truly necessary.
But to go directly to your comments and the concern of your audience here about when is enforcement going to start, let's just talk about the field. After July the 16th, field collection resumed all enforcement, with the exception of having to get special approval for filing a notice of federal tax lien. But since your July podcast, we resumed normal lien filing procedures on October the 1st. Field enforcement and collection actions are authorized now with regular approval. Of course, we're going to consider the taxpayer's circumstances on a case by case basis. We're taking in accounts. Some may be significantly affected by economic factors from the pandemic. However, make no mistake, if the behaviors are egregious, we're working those cases. If you're pyramiding employment taxes, we are coming. Anyone who is a high-income non-filer or even a high-income balance due taxpayer, we've got your information, and you can expect to hear from us.
We've continued to refer cases to our counsel and DOJ for suits to reduce liens to a judgment and suits to foreclose on the lien. Like I said earlier, we're also referring cases to criminal investigation and examination. In fiscal year 2021, we're ensuring all of our civil enforcement personnel get additional training to be skillful in detecting and developing cases like these, whether it's suits to set aside fraudulent transfers, whether it's seizures, we're developing fraud. We're taking serious enforcement when it's appropriate, Eric, but it's important to note that we're approaching all of our available work with an abundance of prior research, I mentioned the location intelligence tool, and compassion and reserving those activities only for appropriate cases and where the behavior warrants it.
The Office of Chief Counsel, they're continuing to resolve cases in litigation. Even though they're not meeting with taxpayers and their representatives face-to-face or taking in-person depositions, your audience needs to know that our attorneys are available to discuss their cases by telephone and meet by video conference. But their work's continuing to move. We've got [crosstalk 00:37:18]-
Darren, no, I actually ... I have a follow-up question. So, Darren, I apologize. Finish your thought because one of the things I want to ask you about and you hit on was payroll tax. But we'll get there. So I apologize.
No, no, no, not at all. I do want to go back to what you mentioned about your conversation with Paul and notices. With the automatic relief period from the People First Initiative that ended in July, we resumed payment and collection processes, many of them, but keeping in mind that people still needed help. So even after July 15th, we continued to have that cause on the series 500 notices. In October, we determined that the backlog was caught up enough to account for timely mailed payments, and we made the decision to start issuing those 500 series notices again. This is super important. You don't want to get a notice from us that says, "Give us a call," if we can't answer that phone call because we're working through a backlog of notices. So before we started issuing additional notices, we wanted to make sure that we were caught up with the backlog. That's a really important thing I want to say.
We want to answer your phone calls. We're already not fully staffed enough to answer every call that comes in, so we're not going to make it on purpose even worse by issuing even more notices saying, "Call us," when we're struggling to answer the calls that we're already getting. The decision to start reissuing those 500 series notices was an additional step to return to normal operations. So in late October and the first weeks of November, you may have seen those notices. Taxpayers started to get the 500 series. Those notices, in case any of your audience isn't very steeped in this, those are sent to taxpayers that don't respond or pay to the initial notice and demand for payment, the CP14 notice.
The 501, I'll just briefly mention each one, it alerts individuals that they have a balance due. The 503 is a follow-up notice that says we still haven't heard from them and we may be filing a lien. The 504 mention is, "Hey, if we don't hear from you, we may levy your state income tax refund." Taxpayers, they may qualify for a leave from penalties due to reasonable cause, if they made an effort to comply with the requirements of law but if they were unable to meet them for things beyond their control. So they should call that toll-free number when they get this notice, and if they think they have reasonable cause, they can ask for relief from penalties.
Speaking of enforcement, Eric, the private debt collection program, we began sending new cases to the PCAs, the private collection agencies, back in August on the 16th. Passport certifications do remain paused until March of 2021, so a couple more months. Effective November the 16th, this was after our last podcast, Department of State did begin accepting requests for expedited de-certifications from us. So for certifications that were made previously, if taxpayers are seeking to get an expedited de-certification, we are working those now. The resumption of the new certifications, if you want some specifics, that's scheduled to begin on March the 7th, 2021, and it should generate a notice of those certifications to the State Department on March the 21st. There's about 57,000 taxpayers we expect to certify, so it's going to be in a staggered process. Between March the 21st and April 4th, we think we'll get all of those over to State Department.
Okay. Wow. 57,000. So, Darren, to go into the next step, when you were Director of Field Collections and Caroline Ciraolo was the DOJ, you guys made it a real focus to start looking at payroll taxes and employers who were not paying and paying over and began using a lot more tools. DOJ, we suddenly started getting injunction cases. You may remember I called you about this when we started getting disqualified employment tax levies, which I had never seen before, but you got the field to actually begin using some of the tools that they had.
Along the lines of what you had discussed with, between Taxpayer First as well as the pandemic, can you give us a sense of what is going on with payroll taxes? Because, on the one hand, there are employers who did defer, and in 2021, they're supposed to start repaying that under the CARES Act, and the pandemic doesn't show any sign of abatement, although it's leveling off and hopefully maybe we'll all get vaccinated over the course of the summer into the fall. Can you give us a sense on just where payroll enforcement is right now and what your approach is, at least at the current time?
Yeah. The quick answer to that is it continues to be a very high priority, but we have to keep in mind the impact of Coronavirus. So I'd start with this, Eric, and for your audience. Historically, roughly half of Americans work for a small business. The last thing that we want to do is anything that makes it rougher to open a business or be successful in business. We're primarily here to help, and that initial contact with a revenue officer is your opportunity to ask for that help and work with us to get compliant. Beyond that, though, the reality is that withheld trust fund taxes, those continue to be the majority of the revenue that funds the United States. It's our single largest source of revenue. As of the end of fiscal year 2020, I just got this information, the amount that was past due by employers who withheld trust fund taxes on behalf of the United States from their employees' paychecks that still owe us, that it wasn't paid, 62.2 billion dollars that's owed to the Treasury. During the-
I'm sorry, Darren. For what timeframe?
That's as of September 30th, 2020.
So for basically January through September of 2020?
That's the amount. That's the total amount that was due on our books that hadn't been paid as of September 30th, 2020, 62.2 billion with a B. Despite the pandemic, many trust fund violators, believe it or not, continue egregious behavior, and cases have been referred to CID for fraud and the Department of Justice for suits. But, look, we know that resources are limited. They can't pursue every single case. But if you looked at the number of cases that collections sent to criminal investigation in 2019 compared to 2020, it's fairly similar, which is remarkable given that we have fewer employees and the office evacuations and everything that happened.
The question that we're addressing is will the changes in the law allow deferral of some of the deposits to have an impact on future cases? I think it absolutely will. So we're ensuring that our employees and our managers are going to receive just-in-time training that they need. They need to know when a business is taking advantage of the flexibilities in the law. That's going to be an important consideration in how a case is worked and accurately gauging the employer's true compliance, the trust fund penalty, were they really willful and whether enforcement is appropriate. The most important message, I'd say, is this to businesses. If you owe, we're going to work with you. We're going to work with you in every way we can to help you with payment arrangements, but do not pyramid. Employers have to remain in current compliance.
On the trust fund penalty assessments and statutes themselves, Eric, due to COVID-19, we increased oversight to ensure that we were protecting those statutes as the pandemic began. We protected every single assessment statute for the trust fund penalty. We did that with four clerical employees who were going into the office periodically. They covered the whole United States. We didn't lose a single trust fund statute. We're going to continue to work cases where the statute of limitations is pending, and in some situations, we're going to ask for you, the representatives of the taxpayer, to extend that statute. They had been suspended, new trust fund assessments, until July 15th, but we've since resumed making those.
Yeah, no. Darren, just because I know our time is short, you mentioned the 1000 people that you got hired despite the pandemic. You're doing it remotely in Zoom and the rest. Where do you guys stand as far as hiring right now? Because I know you also have attrition, right? You have the people that are retiring and whatnot. Where does hiring stand, and do you see getting more hiring done through the rest of 2021?
We do plan to do quite a bit of hiring in 2021. We're just waiting on some budget exercises and some decisions to be finalized, and we'll have some refined numbers for you and your audience, Eric. I expect to see significant hiring in both the campus and collection and field collection as well, and, yes, we have plans to, Eric, hire some people in Connecticut, too.
Nice. Very nice.
I'd regret it if I didn't update you guys, though, that since we did the last podcast about hiring, we finished 2020, the fiscal year, with a notable amount of permanent and seasonal hiring of staff and ACS. We increased our staff from about 1900 to ... I think there are just about 2625 right now, and we got the majority of them on telework. Why does this matter to the people listening to me? If your client is in the ACS work stream, you don't want to be on hold for a very long time. Level of service means a lot to you when you call, when you answer your phone. That hiring enabled us to improve our level of service in fiscal year 2020 by 16%. We're going to do even more hiring to try to improve that level of service even more, and we're already seeing that in the first quarter of 2021.
And, Darren, I want to tell you, it's been crazy times, right? It was very funny because you said you never did the 2020 focus guide with the assumption that there'd be a pandemic. The IRS and IRS employees are just like everybody else. They're dealing with the same stuff, spouses whose businesses are faltered or have lost jobs, are now teaching kids from home. Yet, honestly, they've still been doing the job. We've had our appeals hearings. We're still getting things done. The mail's been a little bit slower, admittedly. Can you just comment on what your feeling is as far as the morale at the IRS? How are employees doing?
I think the morale is good. I think it's high. When you think about what motivates people at the IRS and in any government, whether it's state or federal, you want to feel like you're making a difference. When you look at all of the relief that the federal government is providing to help Americans get beyond the pandemic, a great deal of it is handled by the Internal Revenue Service, whether we're talking about stimulus payments or credits for businesses to keep them in business, keep them able to help keep people employed. Our employees see themselves in that, and making sure that our employees make a difference ... This is a terrible time that none of us probably anticipated happening in our lifetime as Americans or as an IRS employee, but to be a part of the help, of the solution, I think makes our employees feel good.
When you look at the results we've gotten in 2020, despite having to evacuate offices, convert people to telework who never worked telework before, dealing with mail backlogs and making sure stimulus payments go out and trying to make sure that we're only taking enforcement where it's necessary, I think it's a very proud moment for us. I'll just give you one soundbite that I just learned about yesterday, Eric. I saw the data on something you and I spoke about back in January last year, and that was why did we default installment agreements because a taxpayer files a new return and they owe money? Why not just add it to the agreement? We implemented that policy to help people and cut down on phone calls.
Through the first quarter of 2021, over 258,000 installment agreements were systemically reinstated that would've otherwise defaulted because the return was filed, there was an additional balance due, but by adding it to the installment agreement, it would still pay within the life of the statute so that taxpayers weren't calling us over a defaulted IA. Clearly, they needed our help. I mean, just think about that. We get about three million agreements a year. A quarter of a million taxpayers didn't get a defaulted agreement, were allowed to keep in an agreement, continue paying the IRS, and were not subjected to enforcement. So think of all the employees involved with coming up with that policy, with making sure that happens. Things like that make our employees feel good. They know they're making a difference. I think morale is high.
Yeah, no. Also, think about the lack of stress on the taxpayers, the lack of phone calls, 258,000 phone calls coming in. No, wonderful. So, Darren, before I ask my last question, if tax practitioners who are listening to this want to get in touch with you or get a message to you, how best can they do that?
Well, I really mean it when I say I wish I could give everyone who's listening to your podcast right now, Eric, my direct phone number. I really do. I believe you told [inaudible 00:52:55] viewed by several thousand tax professionals. Well, I hope you can all imagine, I'd never have the capacity to answer that many phone calls or even close to it. At least, I wouldn't be able to answer them timely. But there are some options, especially for you, as practitioners. You can call the practitioner priority service line for ACS, which is option four, option four when you call ACS. If the tax practitioner has a case-related issue that's assigned to a revenue officer in the field, they should ask the assigned RO for the group manager's name and contact or phone number and speak to the manager.
I'd also encourage the practitioners to work through their local tax practitioner organizations and reach out directly to the stakeholder liaison for IRS. They establish relationships with practitioner and industry organizations, and they can provide more information about our policies, our practices, and our procedures. So if they want to establish a relationship with the Stakeholder Liaison Office, Eric, I've sent a link that you can share with your listeners so they can find a contact in their state. Please note, though, those contacts are intended for tax pros and industry stakeholders, and it's not to respond to tax law questions or account inquiries. Again, I would speak with the employee's manager.
All right. All right, very good. So, Darren, just before you go, right now, from my perspective, and I've done this a long time, the IRS and you as an executive are dealing with unprecedented stuff, COVID-19, the stimulus packages, continuing enforcement, the teleworking environment, a body of employees that have their own issues and are still trying to do the job. It's a monumental task. What's the message you'd like taxpayers and practitioners to know as we continue to roll into 2021?
I just have maybe, at the most, three brief messages I want to share. The first one is we care. We really do. I hope that's demonstrated in some of the extraordinary efforts we've taken throughout the pandemic to help. Some involve legislation, and we're certainly thankful to, aren't we, our elected leaders for that. But most of the things we've done were dreamed up by IRS employees and leaders from a good place in their hearts because they're part of your communities, too. They've got family and friends who've been ill. Unfortunately, some have passed away or lost their job or seen their business suspended or limited severely. So we understand the environment from which we're serving you. Public service has never meant more to us than it has the past year.
All that said, my second message is don't underestimate us. Please don't underestimate us. If you think this is the perfect time to defeat tax administration, I'm confident you could never have picked a worse time. I've never seen so many resources and tools that have been available for us to address schemes and fraud. Finally, and my favorite message, if I say it too often, too bad, this is just an easy one to understand and take advantage of, file on time and save money. Almost every non-filer I've ever met delayed because they couldn't pay, and, unfortunately, when they don't pay the proper amount, they're subject to penalties, and it's cheaper to file and pay when you can. We're here to help, and we'll be more accommodating now than ever in helping your clients get on a livable payment plan.
Beyond that, Eric, just thank you so much for helping us. You've always been great at helping us get our messages out. Most of the money that funds the United States comes from what we do, and when I say we, I don't mean the IRS alone, I mean all of you as tax professionals. We could never deal one-on-one with the hundreds of millions of taxpayers that we're talking about, so you all are a big part of making that happen, so thank you.
No, Darren, listen, thank you for doing this. Thank you for joining us again. Truthfully, we appreciate everything you're doing. Again, I know you're busy. Thank you for taking the time out today to do this.
Oh, thank you, Eric.
All right. Thank you, and, everyone, thank you for listening. Darren, I'm sure we'll have you back. So until next time.