The IRS has released a strategic operating plan for the the nearly $80 billion in funding allocated to it by the Inflation Reduction Act, which was signed into law last August.
In the IRS's announcement of the plan, it stated, "The plan makes clear that the resources to be deployed over the short and long term will be used to:
• Rebuild and strengthen IRS customer service activities, putting an end to long wait times on the phone, adding capacity to the in-person taxpayer assistance centers around the country, and providing new online tools for those who want to engage with the IRS digitally.
• Add capacity to unpack the complex filings of high-income taxpayers, large corporations and complex partnerships, addressing a growing chasm between the number of experienced compliance personnel at the IRS 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.
• Update various outdated systems in IRS core operations to help ensure the agency has the most modern and robust security in technology to protect taxpayer data."
In a statement, newly installed IRS Commissioner Daniel I. Werfel said, "The plan is a bold look at what the future can look like for taxpayers and the IRS. Now that we have long-term funding, the IRS has an opportunity to transform its operations and provide the service people deserve. Through both service and technology enhancements, the experience of the future will look and feel much different from the IRS of today. This plan charts the course forward for the IRS and tax administration."
He added, "For years, the agency has not had the resources to provide the service people deserve. Across all of our operations we've seen the impact. We've lost employees and seen our resources stretched thin with new mandates and an increasingly complex economy. The IRS looks forward to demonstrating how the actions under this plan will translate into real improvements for taxpayers. Technology as well as in-person assistance will be cornerstones of this effort."
Werfel also noted how the Inflation Reduction Act has already improved the experience of taxpayers and tax professionals during the 2023 filing season: "People can see the first signs of change this filing season following this infusion of funding. Taxpayers and tax professionals can see the difference as we have dramatically improved our phone service thanks to more staff. More walk-in services are available across the country. New digital tools have been added. And these are just first steps."
In the his introduction to the plan, Werfel said, “The Plan is structured to achieve five objectives, which will be accomplished through a series of initiatives and projects aligned to each.
1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible
2. Quickly resolve taxpayer issues when they arise
3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap
4. Deliver cutting-edge technology, data, and analytics to operate more effectively
5. Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers.”
The strategic operating plan lays out how the funding will be allocated for fiscal years 2022 through 2031. During this period, the IRS plans to spend $79.4 billion from the Inflation Reduction Act as follows: $3.2 billion for taxpayer services, $45.6 billion for enforcement, $25.3 billion for operation support, $4.8 billion for business systems modernization and $0.5 billion for clean energy. These figures are shown in an IRS chart from the plan, below.
