The U.S. Treasury Department and Internal Revenue Service (IRS) have released the Strategic Operating Plan, outlining their vision to revamp the IRS using resources from the Inflation Reduction Act. This comprehensive plan aims to provide exceptional customer service to taxpayers while simultaneously reducing the deficit by hundreds of billions of dollars. The focus will be on improving enforcement among high-income individuals, wealthy entities, complex partnerships, and large corporations that have been evading their tax obligations.
Secretary Janet L. Yellen expressed gratitude for the Inflation Reduction Act resources, which have already led to significant improvements in customer service during the current filing season. She emphasized the plan’s objective of offering world-class service, upgrading outdated technology, and closing the tax gap by ensuring equitable treatment for high earners, working families, and the middle class.
The Strategic Operating Plan highlights five key objectives:
- Enhancing services to assist taxpayers in fulfilling their obligations and accessing eligible tax incentives.
- Promptly resolving taxpayer issues as they arise.
- Expanding enforcement efforts to address complex tax filings and noncompliance by high-dollar taxpayers, thereby reducing the tax gap.
- Implementing cutting-edge technology, data, and analytics to improve operational efficiency.
- Attracting and retaining a diverse and skilled workforce and fostering a results-oriented culture to better serve taxpayers.
The plan also adheres to Secretary Yellen’s directive that small businesses and households earning less than $400,000 annually, historically, will not face increased audit rates with the use of Inflation Reduction Act resources.
CUSTOMER SERVICE AND TAXPAYER EXPERIENCE The Strategic Operating Plan emphasizes enabling taxpayers to seamlessly interact with the IRS through various channels, such as phone, in-person, and online. Over the course of the next ten years, the IRS aims to establish secure online filing options for all documents and notices. Taxpayers will have easy access to their data, account history, and the ability to respond to a broader range of notices online. The IRS will also assist taxpayers in identifying potential mistakes before filing, correcting errors that delay refunds, and claiming eligible credits and deductions.
TECHNOLOGY Modernizing outdated technology is a crucial aspect of the IRS’s commitment to delivering exceptional customer service. Efforts will focus on digitizing forms and returns upon receipt, eliminating paper backlogs that have caused refund delays. The IRS plans to retire obsolete components of its core tax processing systems, replacing them with modern platforms that facilitate faster transaction processing. These technology investments will enhance cybersecurity measures and protect taxpayer data while enabling real-time access to account information.
ENFORCEMENT In recent years, due to limited resources and talent loss, audits targeting wealthy individuals and large corporations have significantly declined, leading to a substantial increase in tax evasion by the top 1 percent. To address this, the IRS will hire experienced professionals and leverage improved data and analytics capabilities to strengthen enforcement efforts at the top end of the income spectrum. By identifying potential evasion within complex structures used by high-income individuals and large corporations, the IRS aims to allocate resources efficiently for audits that are most likely to uncover significant noncompliance.
The release of the Strategic Operating Plan signifies a comprehensive and ambitious approach to transform the IRS, enhance taxpayer services, and tackle the deficit through improved enforcement.