On April 4, 2023, the Internal Revenue Service released the Strategic Operating Plan, which details the agency’s plans to use Inflation Reduction Act resources to transform the administration of the tax system and services provided to taxpayers.
The goal of the changes outlined in the Strategic Operating Plan is to “provide taxpayers with world-class customer service“ and reduce the deficit by “hundreds of billions by pursuing tax evasion by wealthy individuals, big corporations, and complex partnerships,” said Deputy Secretary of the Treasury Wally Adeyemo.
The Strategic Operating Plan is organized around five key objectives:
- 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 outlines a series of initiatives and projects aligned to each objective, including 42 key initiatives, 190 key projects, and more than 200 specific milestones designed to achieve the objectives set forth by the IRS.
Improved customer service, compliance efforts, and technology updates are also essential to achieving the goals set forth in the Strategic Operating Plan.
With long-term funding in place, the IRS has hired more than 5,000 phone assisters, increased walk-in service availability, and added new digital tools, according to IRS Commissioner Daniel Werfel.
“In the first five years of the 10-year plan, taxpayers will be able to securely file documents and respond to notices online,” said Werfel. Taxpayers will also be able securely access and download account data and account history. “For the first time, the IRS will help taxpayers identify potential mistakes before filing, quickly fix errors that could delay their refunds, and more easily claim credits and deductions they may be eligible for,” he said.
The Strategic Operating Plan also includes targeted efforts to ensure fair tax law enforcement and compliance with existing laws. The plan focuses on “areas where compliance has eroded the most,” specifically compliance issues involving “wealthy individuals, complex partnerships, and large corporations,” said Werfel. The IRS will increase hiring efforts for experienced accountants and attorneys to ensure enforcement “at the top.” Werfel further noted that the IRS does not intend to increase the audit rate for small businesses or households making less than $400,000.
Finally, the Strategic Operating Plan utilizes Inflation Reduction Act funding to modernize the agency’s technology infrastructure to protect taxpayer data. In the first five years of the 10-year plan, the IRS aims to eliminate paper backlogs that have delayed taxpayer refunds by digitizing forms and returns when they are received and transitioning to fully digital correspondence processes.
“This plan is only the beginning of our work,” Werfel said. “This is a unique opportunity for the IRS and the nation, and we will continue to work closely with our partners as this effort moves forward. This investment in the IRS is already helping taxpayers this tax season, and this plan shows that historic changes are coming.”