IRS Publishes Plan for $80 Billion in Funding
The IRS recently published its strategic operating plan, detailing the agency’s plans for spending the $80 billion it received in funding over the next decade from the Inflation Reduction Act of 2022.
The 150-page report to Secretary of the Treasury Janet Yellen describes plans to make fundamental changes in three key areas:
- Rebuilding and strengthening IRS customer service activities, ending long wait times on the phone, adding capacity to in-person taxpayer assistance centers, and providing new online tools for those who want to engage with the IRS digitally.
- Adding capacity to audit more high-income taxpayers, large corporations and complex partnerships, addressing the difference between the number of experienced compliance personnel who audit high-income, high-wealth tax filings for compliance (about 2,600 employees) and the roughly 30,000 individuals making more than $10 million a year, 60,000 large corporations, and 300,000 large partnerships and S corps. The IRS said it will follow Yellen's directive not to raise audit rates above historical levels for households making less than $400,000.
- Updating various outdated systems in IRS core operations to help ensure the agency has the most modern and robust security in technology to protect taxpayer data.
The plan also states five key objectives to be accomplished through initiatives outlined in the plan. The objectives are to:
- Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible.
- Quickly resolve taxpayer issues when they arise.
- Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap.
- Deliver cutting-edge technology, data and analytics to operate more effectively.
- Attract, retain and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers.
The plan contains 42 initiatives; each includes multiple key projects and milestones to measure progress. The plan covers more than 190 key projects and more than 200 milestones. For each milestone, the plan includes specific timeframes based on year. The IRS said it would identify additional projects and milestones as work continues.
In addition to working with the Department of the Treasury on the development of the plan, the IRS received input from tax professionals, partner groups inside and outside of the tax community, taxpayer groups, IRS federal advisory groups and IRS employees. The planning process also built on prior IRS efforts that received feedback, including the Taxpayer First Act Report to Congress.
The IRS stated that as the plan begins to be implemented, it will work with the public, partners and oversight groups to ensure the work meets the needs of taxpayers and the nation.