Diversity Data Underscores IRS’s Challenge of Enacting Change

In a series of official steps over four years, the Biden administration has taken a whole-of-government approach to making every agency responsible for advancing equity, civil rights, racial justice, and equal opportunity. Its executive orders on agencies and underserved communities have aimed to encourage just that.

But results have been mixed, with much work still to be done. The General Accounting Office’s recent assessment of diversity in the IRS workforce shows the difficulty of changing large organizations and knowing what exactly needs to change.

The GAO found the IRS failed to follow eight vital, yet basic, directions for creating good diversity, equity, and inclusion studies, such as including stakeholders and drawing on a wide variety of information sources.

And thanks to the report, we know there are anomalies in the IRS workforce. Why these differences exist, how to change them, or even if they should transform, is unclear. For example:

• The IRS has more women and people from historically disadvantaged races or ethnic groups in its workforce than we would expect based on their representation in the national civilian or federal workforce.
• Women and people from historically disadvantaged races or ethnic groups are clustered in the lowest pay levels within the agency.
• There are fewer veterans or people with disabilities in the IRS workforce than their numbers in the federal or the civilian workforce would predict.

We don’t know, however, if the lack of women and racial minorities at the upper echelons of the IRS changes how its services flow to underserved communities. That information might come from stakeholders, but the IRS equity action plan didn’t emphasize stakeholders.

We also don’t know what attracts more women and racial minorities to the IRS or why people with disabilities and veterans are less likely to be part of the 90,000 people who work full time for the agency.

We do know that President Joe Biden’s approach to equity casts a wide net. The term “underserved communities” includes so many people and circumstances that the definition runs over 150 words. It includes people who grew up in poverty, or live in rural areas, or don’t speak English at home, or care for elderly parents, or who identify as queer, along with newly minted citizens—all bundled together.

It might be that expanding the mission produces progress that a race-focused approach wouldn’t. The best way to get at the answers is by collecting and analyzing workforce data.

Biden’s executive orders started this process. One order to advance racial equity and support for underserved communities looked at government as service provider and the public as customers. Its purpose, along with another order to transform federal customer experience and service delivery to rebuild trust, was to ensure government reaches every eligible person, especially the historically underserved.

A second order on diversity, equity, inclusion, and accessibility shifted the focus to government as employer and aimed to cultivate a workforce that draws from the nation’s full diversity.

The Biden White House directed agencies to create and then follow a data-driven approach to their missions. That’s easier said than done.

As the orders required, the Department of the Treasury issued equity action plans for 2021 and 2022. Still, the IRS was unable to produce high-quality information about its workforce despite a series of directions and supports meant to gird a holistic approach to equity.

The GAO report reveals the challenges to creating policies and programs, especially far-reaching ones that mean to make tremendous change.

Before Biden, the federal government had never undertaken a comprehensive equity agenda. Getting every federal agency to conduct a comprehensive data-driven study on potential barriers to full participation and develop a powerful equity-driven strategic plan is asking a lot. Studying any part of the federal government is challenging, but the entire federal government? A large ask indeed.

If the IRS is yet to deliver after four years, then perhaps other agencies are having problems.

Data is the key to both finding and resolving these problems. The Office of Management and Budget’s whole-of-government equity agenda serves as a guide for agencies developing customer and workforce studies. It emphasizes data sources and assessment tools, administrative burden as an equity issue, stakeholder engagement, long-term planning for change, and the role of fiscal management in achieving equity.

In the end, data collection and analysis are the first steps on the road to equity. They just need policies to help eliminate workforce discrimination, such as different ways of hiring or advertising positions, to truly bring equity home.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners

Author Information

US taxation and development expert Beverly Moran is professor emerita at Vanderbilt University, senior fellow at the Roosevelt Institute, and senior tax fellow at Boston College Law School.

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