After several months of work, the IRS has released its Strategic Operating Plan, a sweeping endeavor to revolutionize the tax agency and significantly enhance its services to taxpayers and the country over the next ten years. The 150-page report submitted to the Treasury Secretary sets out the agency’s groundbreaking proposals, which were made possible by the funding received under the Inflation Reduction Act of the previous year.
The IRS aims to revamp and reinforce its customer service operations by eliminating extended wait times on phone calls, enhancing the capacity of in-person taxpayer assistance centers throughout the nation, and introducing innovative digital tools for individuals who prefer engaging with the IRS online. The plan includes modernizing multiple outdated systems in the Internal Revenue Service core operations to ensure that the agency has the most advanced and resilient security technology to safeguard taxpayer data.
IRS Reveals Decade-Long Plan for Ambitious Overhaul
The plan seeks to increase the capacity to decipher intricate filings of high-income taxpayers, large corporations, and complex partnerships, bridging a growing gap between the number of seasoned compliance personnel at the IRS, who scrutinize high-income, high-wealth tax filings for adherence (approximately 2,600 employees). Also, will point at the roughly 30,000 individuals earning over $10 million annually, 60,000 large corporations, and 300,000 large partnerships and S corporations.
Taxpayers are already witnessing significant changes this tax season through IRS customer service initiatives, and the plan provides a groundwork for future endeavors. In terms of compliance initiatives, the IRS is committed to complying with Treasury Secretary Yellen’s instruction not to exceed historical audit rates for households earning less than $400,000.
Therefore, as the IRS implements the Strategic Operating Plan in the upcoming years, the agency will prioritize pursuing high-income and high-wealth individuals, complex partnerships, and large corporations that are not meeting their tax obligations. Consequently, the IRS has no intentions of raising the audit rate for households earning less than $400,000.
The plan revolves around five objectives:
- Significantly enhance services to assist taxpayers in fulfilling their obligations and claiming eligible tax incentives.
- Rapidly resolve taxpayer concerns as soon as they arise.
- Concentrate increased enforcement efforts on taxpayers with intricate tax filings and significant noncompliance to address the tax gap.
- Provide state-of-the-art technology, data, and analytics to operate more efficiently.
- Attract, retain, and empower a diverse and highly skilled workforce while fostering a culture that is better equipped to achieve results for taxpayers.
How This Plan Could Affect Your Taxes and Your Household Budget
According to the IRS, taxpayers will be able to more clearly access their account and the history of their taxes paid in the past. The restructuring is expected to help taxpayers identify potential errors before filing, quickly correct errors that could delay their refunds, and more easily claim credits and deductions for which they may be eligible.
They also want to find those people who want to cheat when reporting their taxes and, thus, reduce federal deficits. But not everyone agrees. While Democrats support it, Republicans say the changes may affect the wealth of the wealthiest people.
The IRS has already started hiring more than 5,000 new telephone assistants to increase the availability of the walk-in taxpayer service, while adding new digital tools.
The IRS Goals in the Long Run
To achieve these objectives, the plan outlines 42 initiatives, each consisting of multiple key projects and milestones to track progress towards IRS goals. These initiatives cover over 190 key projects and more than 200 specific milestones, with additional ones to be identified as work progresses. As the plan adapts to the needs of tax administration and the nation, the number of projects and milestones is expected to grow considerably over time.
The plan sets specific timeframes based on year for each milestone to be achieved. Last August, the IRS began its work to identify the top priorities for bringing about transformational change, in collaboration with the Department of the Treasury, tax professionals, partner groups inside and outside of the tax community, taxpayer groups, IRS federal advisory groups, and IRS employees.
This planning process built on prior efforts by the IRS that received feedback, including the Taxpayer First Act Report to Congress. In addition to the initiatives detailed in the plan, the Inflation Reduction Act is already making a positive impact on taxpayers and tax professionals during the 2023 filing season.
The Top 5 Errors When Filling Your IRS Tax Declaration
Filing taxes can be overwhelming and puzzling. But if you want to avoid potential penalties or issues with the IRS, take a look at these 5 common errors that taxpayers commit, according to the entity.
Ensure that all of your personal information, such as your name, social security number, and address, is accurate and up-to-date. Additionally, double-check that you’ve entered all of your income and deduction information correctly. Now, do the correct math: even the smallest mistake in your calculations could end in fines or mulcts. If you decide not to pay for an accountant, there are software programs or mobile apps that could help you.
This could sound silly, but it’s common: forgetting to sign and date your tax return is another frequent mistake. Failing to do so could result in your return being considered invalid. Finally, the fifth common mistake is to pass the due date. If you’re unable to file your tax return on time, consider requesting an extension to avoid unnecessary penalties. Always double-check your tax report, in order to avoid this process to be a nightmare for your household.