IRS Hiring Spree Creates Headaches for State Tax Agencies

State tax agencies face another challenge in their ongoing efforts to fill a growing number of job openings for auditors: The IRS keeps poaching their talent.

A post-pandemic surge in retirements and dwindling pipeline of accounting graduates has created serious staffing headaches for state tax departments, which must already compete with the higher salaries offered by major accounting firms. Now agency heads say they face another wrinkle in their efforts to beef up their teams, as experienced people move to the federal side, often for better pay and greater flexibility.

“Like every other revenue agency, we’re losing auditors to the ...