Professional Documents
Culture Documents
IRS Strategic Operation Plan
IRS Strategic Operation Plan
I am pleased to transmit the IRS Inflation Reduction Act Strategic Operating Plan.
In my short time as IRS Commissioner, I am already impressed with the dedication of the IRS workforce
and the progress the agency has been making in delivering for the American people. I hope that through
some of our recent efforts, such as an improved filing season this year and delivery of Economic Impact
Payments during the pandemic, taxpayers see how our workforce makes a difference for the nation. We
can do even more to deliver for taxpayers when sufficient resources are provided to the IRS.
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
3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to
address the tax gap
5. Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better
equipped to deliver results for taxpayers
Taken as a whole, the contents of the Plan provide a vision for the future of Federal tax administration,
which can be summarized as follows:
• A world class customer service operation where taxpayers can engage with the IRS in a fully digital
manner if they choose, where helpful tools for taxpayers to navigate the complexity of our tax laws are
deployed and then refreshed and updated regularly based on taxpayer feedback, and where our
customer service workforce is maintained at the right size and with the right resources and training to
always be ready to meet the taxpayer demand for assistance.
• New capacities, including specialized skills, in place to unpack the complex filings of high income
taxpayers and large corporations and partnerships so Americans have confidence that all taxpayers,
regardless of means, are doing their part to meet their responsibilities under our tax laws.
• An organization and infrastructure rooted in modern technology that provides taxpayers increased
confidence that data is secure and that we are prepared to more rapidly meet new requirements or
responsibilities that may emerge in the future.
We will hold ourselves to achieving the Plan vision by regularly monitoring and reporting to Congress on
our progress. We will also update the Plan details as we learn more about what works and as the
Ensuring taxpayers file accurate returns and pay the taxes they owe is another important component of
this Plan. For the first time, we will help taxpayers identify potential mistakes before filing and quickly fix
errors that delay their refunds. We will focus IRA enforcement resources on hiring the accountants,
attorneys, and data scientists needed to pursue high-income and high-wealth individuals, complex
partnerships, and large corporations that are not paying the taxes they owe. All efforts will comply with
your directive not to use IRA resources to raise audit rates on small businesses and households making
under $400,000 per year, relative to historic levels. Our efforts outlined in the Plan to provide better
service to taxpayers, help them file accurately and resolve issues at filing, coupled with technology and
data advances, will allow us to focus enforcement on taxpayers trying to avoid taxes, rather than
taxpayers trying to pay what they owe.
I can’t overstate the importance of sustained annual resources for IRS operating costs. To help put this
issue in perspective, IRS funding has steadily declined over the last decade causing suboptimal staffing
and investment. In 2010, for example, we operated with 95,370 FTE to meet the demands of the U.S.
population (310 million). Today, the IRS is almost 20 percent smaller (80,006 FTE as of the end of FY
2022), whereas the U.S. population has increased by over 7 percent (334 million) and the tax law has
grown more complex. To cover steady state operations, annual discretionary appropriations must be fully
maintained at the FY 2022 level, including growth for inflation and pay raises. Any reduction in annual
discretionary funds – including not providing for inflationary increases to maintain current levels – will
require IRA funding to be shifted to general operations. This would be to the detriment of the service,
technology, and compliance initiatives envisioned to transform the IRS. Diverting IRA funding to cover
base discretionary enforcement needs would lead to more noncompliance, leading to decreased revenue
collection and increased deficits. In rebuilding and sustaining our capacity and capabilities with
discretionary and mandatory funding, we plan to focus on hiring and growing talent with the right skills to
address the nation's increasingly complex tax system. By leveraging technology, automation, and other
tools, we will enable higher staff efficiency than was historically achieved.
As we publish this Plan and work with stakeholders to obtain their feedback, we are also preparing to
transmit supplemental budget materials in the weeks to come to the relevant Congressional committees
outlining our preliminary spending plans by appropriation. These preliminary plans are in addition to the
estimated spending outlined in the plan through FY 2024. We understand the expectation and
responsibility for transparency in spending and will provide more details as they are available. We intend
to work with these Committees as we have more details on our spending plans and will include updated
estimated spending in future updates of the Plan and budget submissions. Specifically, we intend to
share staffing information as we move forward and more detailed technology spending in advance of
major technology investments.
I look forward to continued engagement with our employees and external stakeholders as we implement
this Plan. I also look forward to continued work with you and your staff on this great opportunity to deliver
the modernized tax administration system that the American people deserve.
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Internal Revenue Service Inflation
Contents
Reduction Act Strategic Operating Plan
Part I: Executive summary 7
Overview of the plan 8
Objective 5: Attract, retain, and empower a highly skilled, diverse workforce and develop 102
a culture that is better equipped to deliver results for taxpayers
Context and trends that shaped the development of this plan 138
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Part I: Executive summary
The Inflation
Reduction Act
creates a major
opportunity
In August 2022, Congress enacted the Inflation Reduction Act (IRA), giving the Internal Revenue
Service (IRS) a historic opportunity to transform the administration of the tax system and the
services provided to taxpayers. The IRA provides us with approximately $80 billion over the next
decade to significantly improve the way we serve the public. We will transform service to
taxpayers by using this long-term funding to update technology capabilities and invest
in our employees with new tools, skills, and capabilities. These resources will also ensure the
fairness of the tax system by addressing the tax gap—the difference between taxes due and
taxes paid—most recently estimated at $496 billion.
The IRS has been significantly underfunded for the past decade, with a budget reduction of 22%
in real terms from 2010 to 2021, leaving us with outdated technology and a shrinking workforce
in the face of an increasingly complex tax environment in which to administer the U.S. tax code.
This lack of investment has led to low levels of service, paper-based processes, antiquated
technology, and an overall experience for taxpayers that falls short of what we want to deliver.
The IRA investment is already transforming our ability to improve service to taxpayers.
Shortly after enactment, the Department of the Treasury and the IRS initiated an effort to develop
a Strategic Operating Plan, identifying the highest-priority opportunities to deliver transformational
change for taxpayers. The planning process leveraged prior IRS planning efforts, including the
Taxpayer First Act Report to Congress, new thinking around best practices and available
technology capabilities, and current and past input from a wide range of stakeholders in tax
administration. Additional context that shaped the development of this Plan is available in Part III
and Part V.
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to deliver together. As we deliver on the data
and technology aspects of our transformation,
the necessary skill sets and composition of our
workforce will change. This Plan envisions a
modernized IRS that is focused on the customer
experience and prefers digital to manual
processes and prioritizes compliance efforts that
focus on complex tax issues. Looking at
transformations of a similar scope, we know that
the work needs of the future will look different from
those of today (e.g., analytical and technical skills).
This plan provides our employees and
stakeholders with the information they need to
understand where we are going and how we
intend to get there.
We will make it easier for taxpayers to meet their tax responsibilities and receive
tax incentives for which they are eligible. We will adopt a customer-centric
approach that dedicates more resources to helping taxpayers get it right the first
time, while addressing issues in the simplest ways appropriate. We will address
noncompliance, using data and analytics to expand enforcement in certain
segments. We will become an employer of choice across government and
industry. These changes will enable us to serve all taxpayers more equitably
and in the ways they want to be served.
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The IRS that emerges from this Ø We will devote a larger share of employees
Plan will deliver a best-in-class to taxpayer-facing roles as demand for
experience for taxpayers. U.S. manually processed paper returns and
correspondence decreases and systems are
tax administration of the future automated.
will look different in many ways:
Ø We will recruit, train, and retain a workforce
with the skills and capabilities we need—people
Ø Data-driven decision-making will be the core who put customer service first and are able to
of our approach to fundamentally shift how we use our new technologies to work effectively.
manage operations and deliver services to
Ø We will improve the employee experience
taxpayers.
and empower the workforce to drive better
Ø Taxpayers and tax professionals will be able taxpayer experiences, with clearer career
to interact with us in the ways they prefer, pathways that will improve retention and
including expanded digital, phone, and in- support career growth and opportunity.
person assistance options.
Ø We will ensure the privacy and security
Ø Taxpayers will have easy, secure access to of taxpayer data in all that we do.
their data, as well as the tools to help them use
it, to help them meet their tax obligations. In addition to the transformation funding for the
IRS, the IRA also includes technical tax provisions
Ø We will help taxpayers both meet their tax
designed to incentivize energy security and clean
obligations and receive the credits and
energy investment in the United States. We are
deductions for which they are eligible.
actively working to implement these provisions.
Ø Electronic filing and communication options While most of this Plan focuses on our overall
will be simpler and will make it easier to interact transformation, we will also describe how these
with the IRS. broader efforts will equip us to better deliver the
Ø We will offer notifications and proactive help energy security and clean energy provisions that
for taxpayers and tax professionals to find and Congress provided in the IRA.
correct mistakes earlier.
Ø We will resolve filing issues with clear notices IRA Transformation Outcomes.
and the fastest, simplest possible solution for
the taxpayer. As we move toward the future state described
Ø We will use enhanced data and analytics above, powered by the IRA investment and the
to assist in the selection of compliance cases initiatives outlined in this plan, we will measure the
based on the highest risk of noncompliance. overall progress of the transformation according to
the following transformation outcomes. In addition
Ø We will increase capacity and expertise to these outcomes, we will monitor progress in
for enforcement to better address high-dollar several other indicators of success defined in Part
noncompliance among complex filers. II of this Plan. We will define detailed performance
Ø We will retire outdated legacy IT systems metrics for initiatives during implementation.
and invest in new technology to improve
customer experience, to provide data-driven • World-class service experience: Improved
enforcement, and to carry out skill-building on customer satisfaction metrics
technology and data across the IRS workforce, • Digital-first organization: Digital options for
so employees are able to use real-time data all taxpayer interactions with the IRS, alongside
and analytics to drive their work and improve the continued option for taxpayers to interact
productivity. in their preferred mode, such as phone or in
person
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Ø Launching Information Returns Intake
System (IRIS) for businesses to electronically
file 1099-series forms in January 2023
Ø Creating a tactical operations center to
increase hiring and onboarding speed and
capacity, in tandem with campaigns to improve
employees’ access to critical supplies and
equipment, pilots for increased flexibilities
to compete with the private sector, and other
efforts to improve the culture and value
proposition of working at the IRS
This Plan will serve as a guide for decision-making by IRS leadership and project managers.
The Transformation and Strategy Office will coordinate detailed planning and execution efforts.
See Part III for details on how implementation will be governed. The following describes the
organization of this plan.
Elements in Part II
Example
Transformation objective
Objective 1: Dramatically improve services to help
describes what we will do
taxpayers meet their obligations and receive the
to make the vision a reality.
tax incentives for which they are eligible
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Objective pages
For each objective, the Plan includes the following information:
Clean energy
callout box
Where we
are heading
Strategic shifts
Exhibit
Initiatives
Indicators included in
of success this objective
Initiative pages
Each objective is associated with a group of initiatives.
For each initiative, the Plan includes the following information:
Where we
are heading
What success
would look like
Milestones
Filing taxes can be time-consuming and difficult, and we have not been able to meet all demands
for taxpayer services. Taxpayers want a more seamless filing process, similar to the services available
in other sectors. We will significantly improve our services by providing taxpayers, including individuals,
businesses, and tax professionals, with tools, information, and assistance to make it easier to comply.
Initially this will require us to increase the number of employees providing customer services, but over time
many of these improvements will be made possible by the technology investments outlined in Objective 4.
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Indicators of success
How improving customer experience will further the energy security and
clean energy provisions of the IRA
• Through enhanced education and assistance, we will help taxpayers understand for which energy
security and clean energy credits they may be eligible, and how to claim them.
• Multichannel assistance will give taxpayers the ability to file and communicate with us through the
channel of their choice.
• Taxpayers will be able to log into their online account to track the status of their account and claims.
• Consumers will be able to transfer their clean vehicle tax credit to a car dealer for an equivalent price
discount starting in 2024.
• Mapping tools will help taxpayers identify potential eligibility for certain energy security and clean
energy tax credits.
From To
Taxpayers often must call the IRS to get help Taxpayers and tax professionals will be able
because self-service options are limited. to interact with us in the way they prefer, including
expanded digital, phone, in-person assistance
options.
Taxpayers lack convenient ways to access Taxpayers will have easy, secure access to their
and use their tax data. data, as well as the tools to help them use it,
to meet their tax obligations.
Filing and communications are paper-based Electronic filing and communication options
and inconvenient for taxpayers. will be simpler and will make it easier to interact
with the IRS.
Taxpayers get limited help navigating the tax We will help taxpayers both meet their tax
system on their own. obligations and receive the incentives for
which they are eligible.
Improve the availability and Explore direct file: The IRS will explore
1.1 accessibility of customer service: 1.5 providing taxpayers the option to file
Taxpayers will be able to receive certain tax returns directly with the
on-demand customer service or IRS online
schedule service ahead of time
Enable taxpayers to access their
Expand digital services and 1.6 data: Taxpayers will be able to access,
1.2 digitalization: Taxpayers will be download, and seamlessly share their
able to file all documents securely tax data and IRS history
and exchange correspondence
electronically
Provide earlier legal certainty:
1.7 Taxpayers will have greater upfront
Ensure employees have the right clarity and certainty additional guidance
1.3 tools: Employees will have the right on tax issues
tools and information to quickly and
effectively meet the needs of taxpayers
Deliver proactive alerts: Taxpayers
1.8 will be able to receive alerts to help them
Improve self-service options: meet filing and payment obligations,
1.4 Taxpayers will have access to secure understand opportunities to claim certain
online accounts where they can view incentives and learn about life changes
their account and profile information, that could impact their taxes
make changes, interact with the IRS,
and manage preferences for payments,
refunds, and communications
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Help taxpayers understand and claim
1.9 appropriate credits and deductions:
Taxpayers, including individuals and
small businesses, will receive education
and assistance in claiming available
incentives
Taxpayers will be able to receive on-demand customer service and schedule service ahead of time
We will equip the employees who interact with 2. Provide the public with accurate wait time
taxpayers with training and the authority they need estimates. Include estimated wait times in
to resolve issues at the lowest appropriate level. customer service channels and processing
As discussed in other initiatives, we will provide times for high-volume returns and other forms.
a multichannel service experience and improved 3. Staff customer service functions to meet
employee tools to improve service delivery. projected demand. Use enhanced data and
Customer service improvements will be analytics to project demand for customer
comparable across diverse taxpayer segments, services and better allocate well-equipped
including those with disabilities and limited employees to meet demand.
English proficiency.
4. Improve appointment scheduling and
on-demand capabilities. Offer appointment
scheduling and on-demand services across
service channels.
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5. Develop policies and tools that support
first-contact problem-resolution. Develop
policies and tools that support the immediate Key dependencies
involvement of the right people to resolve
1.1 depends on projects in initiatives:
taxpayer issues quickly, even when
1.3, 1.4, 1.12, 4.5-4.7, 5.5-5.7
first-contact employees do not have the
information or authority to resolve the issues.
Initiatives dependent on projects in 1.1:
6. Enable equal access through equitable 1.9, 2.6, 2.7, 5.8
practices. Provide equitable access to IRS
services and opportunities for taxpayers.
Meet the needs of rural populations, people
with disabilities, those with limited English
proficiency, other underserved communities,
and small businesses. Explore creative
opportunities for expanding the reach
of live assistance.
Milestones
FY 2023
1 Expanded hours are available at the TACs
for appointments and on-demand service
with staffing to meet expected demand
FY 2024
2 Taxpayers and tax professionals can
schedule service appointments via
multiple channels, based on staff
availability
FY 2024
3 Data and analytics capabilities are used
to predict taxpayer demand and staffing
needs for customer service and to project
estimated processing time for certain
returns and other forms
FY 2024
4 Increased service availability and services
are offered in TACs and on phones
to meet taxpayer demand
FY 2025
5 Data and analytics capabilities are used
to develop real-time wait time projections
for taxpayers seeking on-demand service
Taxpayers will be able to file all documents securely and exchange correspondence electronically
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6. Enable and implement digital processing.
FY 2026-2027
Replace and streamline case, account, 7 Additional forms, returns, and
and payment systems to incorporate more
certifications available for electronic filing
automation and digitally process data received
and digitalization based on prioritization
from any submission. Create and implement
plan
a prioritization plan to digitalize end-to-end
processing across the IRS based on need,
impact, and feasibility.
7. Evaluate which taxpayers are most
Key dependencies
burdened during filing and remove barriers
1.2 depends on projects in initiatives:
to electronic filing. Evaluate which taxpayers
4.1, 4.3-4.5, 5.5
face barriers during filing, such as those who
may be eligible for credits and deductions; Initiatives dependent on projects in 1.2:
those who need information quickly from the 1.4, 1.9, 1.11, 2.2, 2.7, 4.1, 4.5, 5.3, 5.8
IRS, such as residency certificates; or those
who are required to paper-file in certain
circumstances. Prioritize creating and
improving digital pathways for these taxpayers.
Milestones
FY 2023
1 Certain documents, paper
correspondence, and non-tax forms
digitalized using the new Digital
Enablement Platform launched in 2022
FY 2023
2 Enhanced scanning of key tax forms
(e.g., Forms 940, 941, 1040)
FY 2023
3 Planning and prioritization to enable
and implement digital processing
and electronic filing
FY 2024
4 Highest-priority end-to-end digital
processes implemented
FY 2024-2025
5 High-priority forms, returns, and
certifications available for electronic
filing and digitalization
FY 2025
6 Additional high-priority end-to-end
digital processes implemented
Employees will have the right tools and information to quickly and effectively meet the needs
of taxpayers
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Milestones
FY 2023
1 Partnership launched between IRS
employees and the National Treasury
Employee Union (NTEU) to study
and build tools to help employees
meet taxpayer needs more efficiently
and effectively
FY 2023
2 Comprehensive review and planning
related to case management, customer
relationship management, and data
access, intake, and viewing capabilities
to ensure employees have the tools they
need to service taxpayers
FY 2024
3 Delegations of authority studied
and modified to empower employees
to resolve issues at the lowest appropriate
level
FY 2024
4 Scope of services studied and modified
to empower employees to resolve issues
at the lowest appropriate level
FY 2024-2025
5 Employee job aids and tools made
accessible and searchable in a single
place; training provided for employees
on new tools, processes, and authorities
FY 2024-2027
6 Additional capabilities launched based
on prioritization plan
Key dependencies
1.3 depends on projects in initiatives:
4.4-4.7, 5.5, 5.7, 5.8
Taxpayers will have access to secure online accounts where they can view their account and
profile information, make changes, interact with the IRS, and manage preferences for payments,
refunds, and communications
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6. Enhance IRS.gov systems and content
to support new digital tools, products,
and services for taxpayers. Upgrade systems
and improve content development to make
sure IRS.gov supports the new capabilities and
is accessible to taxpayers and stakeholders,
including underserved and limited English
proficient (LEP) populations.
Milestones
FY 2023
1 Full implementation plan for online
account enhancements developed for
Individual, Business, and Tax Pro Online
Accounts
FY 2023
2 Enhancements to Individual Online
Accounts and Tax Pro Online Accounts
implemented
FY 2023
3 Business Online Accounts for taxpayers
launched
FY 2024-2026
4 Enhancements to Individual and Business
Online Accounts implemented to support
capabilities that taxpayers and tax
professionals need, based on the
implementation plan
Key dependencies
1.4 depends on projects in initiatives:
1.2, 1.3, 1.12, 4.1, 4.4-4.6, 5.5
The IRS will explore providing taxpayers the option to file certain tax returns directly with the
IRS online
Key projects
1. Study the feasibility of building a direct file
service and the preferences of taxpayers.
Ensure any direct file service is feasible,
cost-effective, secure, and meets the needs
of taxpayers.
2. If the outcome of the feasibility study
warrants, create an additional option for
how taxpayers can file their tax returns.
Direct file would give eligible taxpayers a free,
public electronic return-filing service option.
Taxpayers will be able to access, download and seamlessly share their tax data and IRS history
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FY 2025
4 Online accounts upgraded to incorporate
user-friendly views of account and return
information (e.g., notices, letters, account
history, payment history, balances due,
etc.)
Key dependencies
1.6 depends on projects in initiatives:
1.3, 1.4, 4.1, 4.4-4.6
Taxpayers will have greater upfront clarity and certainty through additional guidance
on tax issues
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Key dependencies
1.7 depends on projects in initiatives:
None
Taxpayers will be able to receive alerts to help them meet filing and payment obligations,
understand opportunities to claim certain tax incentives and learn about life changes that could
impact their taxes
Where we are heading tax reporting and claims for appropriate incentives.
We would see decreased penalties and interest
We want taxpayers—including businesses and the and have shorter examination cycles for taxpayers
self-employed—to have the information they need who receive relevant alerts.
to understand and comply with tax obligations,
claim credits and deductions, and understand the Key projects
impact of life changes on their tax situation (such
as marriage or the birth of a child). Educating 1. Create options for taxpayers to receive
taxpayers about their eligibility for different options informational and reminder alerts. Allow
and making it easier to access those options will taxpayers to choose the types of alerts
build trust in the tax system and help taxpayers they wish to receive and their preferred
make more informed choices. communication channels, which could
include in-app notifications, secure messaging,
We will use available data to create clear, or email. Electronic alerts will incorporate
informative, and personalized alerts that help security and authentication measures
taxpayers understand their obligations and the to protect taxpayer privacy.
credits and deductions they may be eligible
2. Personalize what information taxpayers
to claim. We will also give taxpayers the option
include to inform their alerts. Enable
to share life changes with us to learn about
taxpayers to allow the IRS to use tax data
the potential tax impacts of those changes, and to
to personalize alerts.
opt into receiving notifications about potential life
changes that we learn about from IRS data 3. Build the capability for taxpayers to inform
and partner data. the IRS of major life changes and receive
educational content. Enable taxpayers to
We will build a data environment to better utilize update their life changes through their channels
taxpayer-related data sources, including customer of choice, which we will use to inform them
accounts, customer service, third-party information of potential impacts to tax obligations, credits,
reporting, and partner data. Taxpayers who and deductions.
choose to participate will receive simple, easy-to-
4. Build a coordinated partnering strategy
read notifications to help them understand
to inform taxpayers. Partner with the Office
how these life changes may impact their taxes.
of Management and Budget and other federal
Taxpayers will be able to choose what types of
agencies working on life changes initiatives
information they receive, how often, and through
to develop and implement our part of an inter-
what channels. We will use research-based
agency strategy to provide comprehensive
education and outreach approaches to help
information to help customers make informed
taxpayers understand the benefits of enrolling
decisions and navigate the federal system
in personalized alerts.
during status changes.
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Milestones
FY 2024
1 Systems, data sources, and federal
and state partnerships established
to support personalized alerts
FY 2025
2 Intake process built so taxpayers can
opt into alerts and inform the IRS
of life changes
FY 2025
3 Alerts implemented for individual and
business taxpayers and tax professionals,
including putting customer service
mechanisms in place to answer calls
and questions related to the alert
process and the alerts themselves
Key dependencies
1.8 depends on projects in initiatives:
1.3, 1.4, 4.1, 4.4-4.6
Taxpayers, including individuals and small businesses, will receive education and assistance
in claiming available incentives
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5. Expand the scale and scope of outreach Milestones
and education forums. Expand the availability
and services offered and raise awareness
FY 2023
of existing forums, including refundable 1 Key tax credits and deductions identified
credit summits, IRS education and outreach,
as the focus of initial efforts; outreach
Volunteer Income Tax Assistance (VITA)
and community partnership plans
and Tax Counseling for the Elderly (TCE),
developed, including key details such
Low-Income Taxpayer Clinics (LITCs),
as communication channels, partnership
and webinars.
opportunities and messaging
6. Enhance and cultivate community-based
relationships and improve direct outreach FY 2023
to taxpayers, including small businesses. 2 Policies and procedures identified and
Expand relationships with taxpayer prioritized for revision to reduce taxpayer
communities by developing a greater burdens
understanding of their needs and finding
effective ways to provide information to different FY 2024
demographics in ways they will understand 3 Certain policies and procedures
and trust, including distribution of educational updated according to prioritization
materials using current and new social plan and feasibility
media platforms, podcasts, radio, television,
community-based organizations, and other FY 2024
channels. Use a variety of platforms and 4 First new set of scaled outreach
messages to reach new demographics and engagement programs launched
in cost-effective ways.
7. Expand partnerships with government FY 2024
agencies, private institutions, and others
5 Enhanced training including updated
to provide education and service. As guidance on education and outreach
appropriate and legally permissible, partner with for taxpayer-facing employees
federal, state, and local government institutions,
as well as Tribal governments, to share data FY 2024
and information to help taxpayers claim 6 Methodology and estimate of selected
available credits and receive IRS service, credits and deductions gap developed
particularly in under-resourced communities.
Expand partnerships with public and private FY 2024
institutions, such as tax preparation service 7 Pilot completed for expanded partnership
providers, software companies, VITA, low- programs with government agencies
income tax clinics, faith-based organizations, and private partners; effective programs
nonprofits, and libraries, to distribute refined and scaled up
educational materials on available
credits and deductions. FY 2025
8 New contacts launched for lawful
8. Support the IRS shift to a culture of service
and continuous improvement. Develop non-filers who may be eligible for a
policies and procedures to help IRS employees credit or deduction to ensure they are
look holistically at each taxpayer’s individual aware of their eligibility and have the
situation and make sure the taxpayer is aware tools and assistance necessary to
of the credits and deductions for which they claim appropriate credits or deductions
are eligible.
FY 2025
10 Additional updates to policies and
procedures to reduce taxpayer burdens
Key dependencies
1.9 depends on projects in initiatives:
1.1, 1.2, 1.8, 2.1, 2.6, 4.5-4.8, 5.1, 5.6-5.8
Taxpayers will be able to make payments more easily and seamlessly through all service channels
Taxpayers will be able to use new status-tracking tools to see real-time status updates, next steps,
and estimated time to process documents and resolve issues
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FY 2025
4 Real-time processing estimates launched
with data analytics to provide more
accurate status messaging
FY 2024-2027
5 Audit status and other process-tracking
launched and enhanced based
on prioritization plan
Key dependencies
1.11 depends on projects in initiatives:
1.2-1.4, 1.10, 4.1, 4.2, 4.4-4.7
Taxpayers will be able to quickly, securely, and accessibly get the help they need, resolve
more issues in a single contact, and experience minimal delays during interactions with us
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FY 2023-2024
4 Certain employee views of customer
histories delivered and enhanced, such as
with customer relationship management
tools
FY 2024
5 Additional online options available
for identity-proofing for individuals
and businesses
Key dependencies
1.12 depends on projects in initiatives:
1.3, 1.4, 4.4-4.6, 5.5
Millions of taxpayers make simple mistakes when completing their returns, and millions fail to properly
claim tax incentives for which they are eligible. Resolving these and other simple mistakes can be a
prolonged process. Through investments in our data management and taxpayer communication tools,
we will work to resolve these issues more quickly and prevent their recurrence. The initiatives that support
this objective will leverage a multichannel outreach approach.
Indicators of success
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How faster resolution of issues will further the energy security and clean
energy provisions of the IRA for consumers, small businesses, communities,
and industries
• We will flag issues with claimed credits at the time of filing so that taxpayers can correct them,
if necessary, and promptly get the credits for which they are eligible.
• Clear and transparent notices will promptly notify taxpayers claiming energy security and clean energy
tax incentives when issues arise and will provide information for the simplest pathways to resolution.
Strategic shifts
From To
Taxpayers do not have tools to easily identify We will offer notifications and proactive help
potential mistakes and correct them before filing. for taxpayers to find and correct mistakes earlier.
Taxpayers learn of issues via paper notices that Electronic filing and communication options
can be difficult to understand and can be resolved will be simpler and will make it easier to interact
only via inconvenient, paper-based processes. with the IRS.
Simple filing mistakes and larger inaccuracies We will resolve filing issues with clear notices
may require lengthy issue resolution processes. and the fastest, simplest possible solutions
for taxpayers.
Identify issues during filing: The IRS Expand tax certainty and issue
2.1 will send taxpayers notifications about 2.4 resolution programs: Taxpayers will
potential issues as they file returns be able to resolve potential compliance
to help them correct errors and claim issues up front through expanded
credits and deductions pre-filing and tax certainty programs
The IRS will send taxpayers notifications about potential issues as they file returns to help them
correct errors and claim credits and deductions for which they are eligible
Key projects
1. Enhance systemic checks for return
completeness and consistency. Identify
issues at the point of filing such as math
errors, missing forms, or missing income
reported by third parties.
The IRS will provide taxpayers with timely and tailored post-filing treatments to resolve issues
and omissions on their tax returns
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to understand so that taxpayers can take
corrective action. Explore ways to reduce the Key dependencies
burdens on taxpayers affected by
correspondence audits. 2.2 depends on projects in initiatives:
1.2, 1.3, 2.5, 3.1, 4.5-4.7, 5.5-5.7
5. Integrate data and analytics to increase the
timeliness of treatments. Provide treatments Initiatives dependent on projects in 2.2:
as close to the time of filing as possible so that None
taxpayers can address issues sooner and avoid
repeating them in subsequent years.
6. Improve the administration of penalties.
Evaluate and improve the administration
of taxpayer penalties and consider reasonable
cause exceptions where applicable
to encourage voluntary compliance
and resolve issues faster when appropriate.
Milestones
FY 2023
1 New research identified to foster our
understanding of prevalent issues and the
most effective treatments for those issues
FY 2024
2 Refined methodology for assigning
optimal treatments and appropriate
follow-up treatments to taxpayers,
developed through data-driven analysis
and research; taxpayer indicators and
behavioral characteristics identified that
will help determine the most effective
treatment for each taxpayer archetype
FY 2024-FY 2026
3 Current treatments (e.g., correspondence
and field audits, soft notices, education
letters) refined to be more efficient and
effective (first set of refinements deployed
in FY 2024; improvements from
digitization and analytics deployed in FY
2026)
FY 2025-FY 2027
4 New tailored treatments developed and
piloted based on data and analytics (FY
2025); additional treatment options piloted
as new IT capabilities become available
throughout FY 2027
The IRS will send taxpayers notices they can understand, delivered in ways they prefer,
with clear explanations of issues and steps to resolution
Key projects 2
FY 2024
72 notices added to individual Online
1. Revise notices by simplifying the language. Account
Update the notice review process and redesign
all notices so that they clearly, briefly state the
issues and required actions, and that they are
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FY 2024-2026
3 Capabilities launched for taxpayers
and tax professionals to receive and
respond to additional notices electronically
Key dependencies
2.3 depends on projects in initiatives:
1.3, 1.4, 4.2, 4.4-4.6
Taxpayers will be able to resolve potential compliance issues up front through expanded pre-filing
and tax certainty programs
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FY 2026
4 Additional specialists hired and
onboarded to support expansion
of current tax certainty programs
FY 2027
5 Additional specialists trained and current
employees reskilled to support expansion
of current tax certainty programs
Key dependencies
2.4 depends on projects in initiatives:
1.3, 4.5, 5.1, 5.4, 5.6, 5.7
The IRS will proactively offer taxpayers appropriate options for past-due payment resolution
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Milestones
FY 2023
1 Improvements to online installment
agreement portal launched
FY 2024
2 Evaluation conducted of fees for payment
arrangements
FY 2025
3 Enhanced analytics launched
for predicting where a proactive
resolution may be appropriate
FY 2026
4 Capability launched for taxpayer access
to a broader range of self-service debt
repayment tools through online accounts
Key dependencies
2.5 depends on projects in initiatives:
2.1, 2.3, 2.7, 3.1, 4.6
The IRS will provide early, tailored outreach to taxpayers who do not file on time
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Milestones
FY 2023
1 Pilot program for new non-filer treatments
launched
FY 2024
2 Successful pilot treatments scaled
FY 2024
3 Analytics for detecting non-filers shifted
for use immediately after filing deadline
FY 2025
4 All appropriate non-filers receive tailored,
proactive outreach before receiving
automated assessments or penalties
Key dependencies
2.6 depends on projects in initiatives:
1.1, 1.6, 1.11, 2.1, 2.3, 4.5, 4.6
The IRS will provide early, tailored contacts to all taxpayers with past-due balances,
and will only escalate to more intensive treatments when appropriate
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FY 2026
4 Workforce needed to achieve collection
coverage levels hired, onboarded
and trained
FY 2024-FY 2026
5 Notices refined to make them more
efficient and effective (first set of
refinements deployed in FY 2024;
improvements from digitalization
and analytics deployed in FY 2026)
Key dependencies
2.7 depends on projects in initiatives:
1.1-1.4, 1.10, 1.12, 2.5, 3.1, 4.5-4.7, 5.1, 5.5
Even with improved taxpayer service, some taxpayers will not comply. The rising breadth and complexity
of tax administration, coupled with the sophisticated ways that some taxpayers attempt to evade tax, have
outpaced our resources and ability to monitor compliance and close the gap between taxes owed and
collected. We will improve our efforts to help ensure that the proper amount of tax is paid and to promote
future compliance. Pursuant to Treasury’s directive, small businesses and households earning $400,000
or less will not see audit rates increase relative to historical levels. We will increase our focus on segments
of taxpayers with complex issues and complex returns where audit rates are minimal today, such as those
related to large partnerships, large corporations, and high-income and high-wealth individuals. Modern
data analysis tools can greatly streamline these efforts, and the technology investments from Objective 4
will enable this work.
Spouse
Wholly owned LLC
Dependents
Related entities can include Some returns are thousands Complex returns require
hundreds of investors in of pages long, requiring many specialists, including
multiple tiers. hundreds of staff hours data scientists, auditors,
to effectively review. counsel, international and
financial products specialists,
economists, and engineers.
Visuals are illustrative
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Indicators of success
ü Decreased repeat noncompliance rates ü Decreased tax gap relative to the gap without
the resources provided by the IRA
ü Decreased enforcement contact with the IRS
for compliant taxpayers
ü Appropriate compliance activities for priority
segments that are sufficient to achieve
voluntary compliance
How expanded enforcement will further the energy security and clean energy
provisions of the IRA for consumers, small businesses, communities, and
industries
• We will quickly identify and address noncompliant activity, including fraud, to ensure credits
are properly claimed by eligible taxpayers.
Strategic shifts
From To
Enforcement efforts underutilize risk analytics We will use enhanced data and analytics to select
to identify high-priority segments. compliance cases based on highest risk
of noncompliance, and to choose enforcement
actions predicted to be most effective.
Enforcement is resource-constrained, with We will increase capacity and expertise
coverage rates for complex filings and high for enforcement to better address high-dollar
dollar noncompliance at historical lows. noncompliance among complex filers.
The IRS will use improved analytics to aid in the selection of cases predicted to be at risk
of noncompliance, choosing enforcement treatments that maximize opportunities to improve
and sustain taxpayer compliance while ensuring fairness in selection
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Milestones
FY 2024
1 Enterprise review of current organizational
structure conducted and proposal for
organizational changes developed
FY 2024
2 Data and research approach implemented
to inform and continuously refine
compliance coverage levels needed
to promote voluntary compliance
FY 2024
3 Centralized compliance planning and
strategy function established to identify
potential high-risk compliance cases using
existing systems and analytics
FY 2026
4 Taxpayer compliance cases selected by
centralized compliance planning function
using new analytics systems and refined
risk-based case selection and routing
Key dependencies
3.1 depends on projects in initiatives:
1.3, 3.7, 4.5-4.7, 5.5, 5.7, 5.8
The IRS will increase enforcement activities to help ensure tax compliance of large corporate
taxpayers
The IRS will increase enforcement activities to help ensure tax compliance of large partnerships
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Ongoing
3 Workforce hired and onboarded
to achieve compliance coverage
rates for large partnerships, including
specialists and experienced hires
Key dependencies
3.3 depends on projects in initiatives:
1.3, 3.1, 3.7, 4.5-4.7, 5.1, 5.4-5.8
Initiatives dependent on projects in 3.3:
None
The IRS will increase enforcement activities to help ensure tax compliance of high-income
and high-wealth individuals
The IRS will increase enforcement activities in other key areas where audit coverage has declined
while complying with Treasury’s directive not to increase audit rates relative to historical levels
for small businesses and households earning $400,000 per year or less
FY 2025
What success would look like 2 Refined approaches and treatments
piloted for enforcement in key segments
Success for this initiative would include
an increase in enforcement and compliance Ongoing
coverage across all areas where coverage 3 Workforce hired and onboarded
has been too low, including excise tax, to achieve compliance coverage rates
employment tax, and estate and gift tax. for key segments, including specialists
and experienced hires
Key projects
1. Hire, onboard and train the staff needed to Key dependencies
achieve appropriate compliance coverage
rates using all available treatments tools. 3.5 depends on projects in initiatives:
Strategically focus on hiring and training to
1.3, 3.1, 3.7, 4.5-4.7, 5.1, 5.4-5.8
ensure appropriate resources to address the
variety of skill sets needed. Increase staff in the Initiatives dependent on projects in 3.5:
Independent Office of Appeals to resolve tax None
controversies arising from enhanced
compliance efforts. Increase staff in the Office
The IRS will enhance detection of noncompliance and increase enforcement activities for complex,
high-risk and novel emerging issues, including digital assets, listed transactions and certain
international issues
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FY 2025
2 New approaches and treatments piloted
for detection and enforcement of key
emerging issues
Ongoing
3 Workforce hired and onboarded, including
specialists and experienced hires,
to achieve compliance coverage rates for
complex, high-risk and emerging issues
Key dependencies
3.6 depends on projects in initiatives:
1.3, 3.1, 3.7, 4.5-4.7, 5.1, 5.4-5.8
The IRS will promote fairness for all taxpayers by addressing noncompliance appropriately
in a balanced manner
Where we are heading This outcome would increase trust in the IRS
and voluntary compliance as taxpayers gain
The IRS has an obligation to administer the law confidence that the tax system is administered
in a fair manner. This is central to the agency’s in a fair manner.
mission and essential to fostering public trust, as
everyone must play by the same set of rules. Key projects
Taxpayers must see that the IRS addresses
all types of noncompliance and does not focus 1. Develop procedures to regularly evaluate
disproportionately on any particular area or the fairness of systems, selection tools
population. and programs, compliance strategies
and treatments. We will conduct research and
We will use research and data to help us enforce partner with others to understand any potential
the tax laws as they apply to all taxpayers systemic bias and identify disparities across
and curtail any potential disparities in tax dimensions including age, gender, geography,
administration. We will improve compliance among race and ethnicity.
taxpayer groups whose activities and finances are
2. Improve enforcement practices
legally complex or where we have historically had
to help ensure fairness in compliance
less compliance coverage. We will do so while
and enforcement. We will continually refine
ensuring that the additional funds provided
our approaches to compliance and enforcement
by the IRA are not used to increase the share of
to improve fairness in tax administration and
small businesses or households below the
maintain accountability to taxpayers as
$400,000 threshold that are audited relative to
informed by our research.
historical levels.
3. Hire, onboard and train staff who enable
We will regularly assess whether IRS enforcement enforcement strategies that match risk
actions, their application and enforcement-related and degree of noncompliance. We will ensure
services are disproportionately burdening or IRS employees have the right skills to address
advantaging specific demographic populations, noncompliance so that the full taxes owed
geographies or customer categories, and we will are paid. We will develop training and tools
make real-time and regular adjustments to our for analytical staff to enable them to identify
approach. This will build on the work already and address any possible bias in data and
started by the Department of the Treasury and the analytics. We will increase staff in business
IRS Research, Applied Analytics and Statistics operations to ensure taxpayers have the
Division to examine the tax system as part of support they need to understand enforcement
OMB’s Equitable Data Working Group. actions—including in the Independent Office of
Appeals to resolve tax controversies arising
from enhanced compliance efforts, and in the
What success would look like Office of Chief Counsel to support both
enforcement and appeals and to litigate cases
Success for this initiative would include when necessary.
enforcement actions that appropriately reflect
risk and level of noncompliance and address
enforcement disparities.
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Milestones
FY 2024
1 Team established to evaluate whether key
enforcement programs and selection tools
are promoting fair treatment, and develop
an initial work plan
FY 2024
2 Statistical data improved to support equity
analyses developed in partnership with
other federal agencies and incorporating
strong safeguards to protect individual
privacy
Ongoing by FY 2025
3 Appropriate reforms to enforcement
practices continuously developed
and implemented to improve fairness
and equity
Ongoing
4 Workforce hired and onboarded to help
ensure fair enforcement, including hires
in the Independent Office of Appeals
and the Office of Chief Counsel
Key dependencies
3.7 depends on projects in initiatives:
3.1, 4.5-4.7, 5.4-5.8
Initiatives dependent on projects in 3.7:
3.1-3.6
Technology improvements at the IRS must always be driven by what will improve customer service
and enforcement and in a way that secures taxpayer information. The key dependency for many initiatives
in the Plan is the modernization of our core IT infrastructure, which now includes some of the oldest
information systems in the federal government. We currently cannot get the full value of the data we have
because we do not standardize or store it in a single environment. Until the passage of the IRA, the IRS
lacked the resources to bring our technology infrastructure into the current era. In addition, the inability
to plan for stable funding led to a start-and-stop approach that did not allow for sustained progress.
IRA funding will enable us to make dramatic improvements to our IT infrastructure. The multi-year nature
of the funding will allow us to successfully plan and deliver. We will design and deliver modern technology
platforms that center around data and applications, with natively integrated protective and detective
security controls. These platforms are embedded within Objectives 1, 2, 3 and 5, and will be built using
enterprise platforms and services.
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computing resources during filing season, and improve and integrate secure authentication
then reclaim that capacity when no longer needed. methods. Cybersecurity and data protection must
The network links our workforce, customers and keep pace with new threats, technologies and
partners to IRS applications, data and services. architectures. We already identify, assess
Network connectivity demands will rise as we and respond to security risks, but our efforts must
provide employees and taxpayers “any device, increase to protect many more cloud vendors and
anytime, anywhere” access and move applications solutions, taxpayer interaction types and employee
to software-as-a-service and platform-as-a-service data access capabilities. Similarly, our monitoring
delivery models. With these enhancements, and threat management must grow to ingest more
taxpayers will be able to rely on online self-service data from modern cloud services and platforms.
tools when and where they choose. Investments in We will shift to technologies that enforce
resiliency and scalability will negate concerns over authentication, authorization, accountability, and
“peak” demand periods, again providing more encryption whenever an IRS asset connects to an
flexibility to taxpayers to engage with the IRS. IRS information resource.
We will consolidate and improve access We will scale modern data encryption across
to and use of data with data privacy dozens of systems to limit exposure of taxpayer
and security as a top priority. We will data. We will continue to espouse a continuous,
bring together taxpayer account, case and proactive and adaptive security posture through a
operational data in a platform accessible zero-trust model, which will allow us to reduce
to appropriate employees and applications, subject fraud and better protect the system from
to controls and protections to help ensure security cyberattacks. Taxpayers can continue
and privacy. Instead of data locked in siloed to trust that their information and identities
applications, each with potential synchronization are protected.
and data integrity issues, the platform will have
authoritative data on a state-of-the-art, secure We will harness data and analytics to drive
platform to enable reporting, self-serve analytics, operations and decision-making. Data will
customer service, application development and inform every aspect of our operations and
external sharing where appropriate. We will decision-making, enabling taxpayers to get
manage data across its lifecycle, including use, information faster and allowing us to focus more
archiving and destruction. If required by law or for enforcement resources on those most likely to owe
legal compliance purposes, we will be able to large amounts of taxes. Adhering to strict data
intake new data streams using scalable, fast and protection safeguards, we will leverage the data
resilient cloud tools. Taxpayers will be able to platform to use data as appropriate to support
access their own data more easily when they need operational needs. Improved data analytics will
it, and employees will be able to better assist better position us to optimize operations for
taxpayers who reach out for help. taxpayers and employees alike. For taxpayers,
secure access to their own data will enhance
We will ensure continued security and privacy voluntary compliance and improve the taxpayer
of taxpayer data. Foundational to taxpayer experience by giving them a fuller picture of their
service is protecting the data entrusted to the account and tax obligations. Meanwhile, applying
agency by confirming identities of employees, new analytical approaches to better understand
taxpayers and tax professionals in every taxpayer journeys will generate organizational
interaction. We already prevent and block billions insights into the barriers and pain points that
of unauthorized access attempts, scans attacks, frustrate taxpayers. Millions of taxpayers may call
and probes every year. Authentication and data the IRS to ask the same question; analytics will
security challenges will increase as we use more allow the IRS to determine the root cause and
taxpayer- and employee-facing digital technology prevent the taxpayer issue in the first place.
and more accessible and powerful analytics and Expanding the use of data and analytics will also
data, share more information, and interact more support compliance and enforcement by helping
with taxpayers and tax professionals. We will us to better identify high-dollar noncompliance
Enhanced data and technology will help taxpayers and IRS employees
Employees will have the systems, Taxpayers will have the tools they
technology and access to data they need to access their data and self-
need to effectively serve taxpayers serve via online services
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Indicators of success
ü Faster issue resolution for taxpayers as ü Expanded use of analytics to inform tax
a result of better data storage and access administration and improve data management
and governance throughout the organization
ü Improved abilities to detect and address
noncompliance ü Faster changes in technology, including adding
features that help the IRS respond more quickly
ü Data and methodology to measure and reduce
to legislative and internal changes and deliver
the gap between taxpayer uptake and taxpayer
new functionality to taxpayers more rapidly
eligibility for credits and deductions, as well as
to reduce inadvertent errors and prevent fraud ü Consolidated total core systems into fewer
applications in large domains, advancing our
ü Expanded detail and better ability to capture
mission to centralize data and improve access
emerging issues in tax gap measurement
to operational and taxpayer account information
How transformed technology, data and analytics will further the energy
security and clean energy provisions of the IRA for consumers, small
businesses, communities, and industries
• Modern IT delivery will enable energy security and clean energy investments by state, local, tribal, and
other non-profit organizations and credit transfers through a modern interface and experience.
• Improved data and analytics will help identify credit underutilization as well as effectiveness of overall
uptake.
Strategic shifts
From To
Data is too siloed, delayed, and underutilized to Decision-making based on data will be the core
drive effective work and decision-making. of our approach to fundamentally shift how we
manage operations and deliver services to
taxpayers.
Monolithic, legacy systems are barriers to We will retire outdated systems and adopt new
improvement because they are difficult and technology to improve customer experience and
expensive to update, maintain, and operate. data-driven enforcement, and we will increase the
productivity and efficacy of IRS employees
to better serve taxpayers.
The IRS will modernize the systems used to access and process taxpayer data
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FY 2024
3 Key dependencies
IRS systems improved to streamline
access to individual taxpayer data 4.1 depends on projects in initiatives:
for service and compliance purposes
1.2, 4.3
via secure, standardized APIs
Initiatives dependent on projects in 4.1:
FY 2025 1.2, 1.4, 1.6, 1.8, 1.11, 2.1, 4.5-4.7
4 Enterprise Case Management
(ECM) platform modernized to host all
compliance workflows, thereby enabling
the decommissioning of many legacy
applications
FY 2025
5 Individual, core tax processing
modernized to simplify and replace
legacy IMF processes
FY 2027
6 IMF data modernized for improved access
and distribution, including the retirement
of over 700 individual taxpayer outputs
for the eventual retirement of IMF
FY 2027
7 Business taxpayer account information
modernized, and legacy systems
decommissioned to support eventual
retirement of BMF
FY 2027
8 BMF retired with systems and
data migrated to modern solution
FY 2027
9 Generalized Mainline Framework
(GMF) decommissioned by establishing
a modern, event-driven transaction
process to enable near-real-time data
FY 2027
10 ECM platform capabilities built to support
90% of case management workflows
and to enable the decommissioning
of associated legacy applications
FY 2028
11 IMF retired with systems and data
migrated to modern solution
The IRS will deliver faster and better results by accelerating the design, development and delivery
of user-centered technology by shifting to a “product and platform” operating model that
incorporates business and technology perspectives
The IRS will enhance core technology processes and platforms to support the delivery
of expanded capabilities for taxpayers and employees
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FY 2026
6 Initial set of capabilities provided to help
automate network and security operations,
which will speed response times to
anomalous events or decrease the
work required to perform common tasks
Key dependencies
4.3 depends on projects in initiatives:
None
Initiatives dependent on projects in 4.3:
1.2, 4.1, 4.4-4.6, 5.1, 5.4, 5.6
The IRS will continue to protect taxpayer data and IRS systems from cyber threats as we transform
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FY 2024
2 Capabilities implemented for continuous
identification of all assets and users
on the IRS network
FY 2024
3 Multi-factor authentication implemented
to improve access controls to IRS systems
containing federal tax information
FY 2024
4 Data-at-rest encryption implemented
for the full portfolio of IRS critical systems
to strengthen data protections and prevent
unauthorized access
FY 2025
5 Micro-segmentation used to improve
control and visibility of network access
for IRS high-value assets
FY 2025
6 To ensure continued protection
of taxpayer data, internal audit capabilities
modernized to better prevent and detect
the misuse of government equipment,
violations of security policies, and
unauthorized access or attempts to
access sensitive data
FY 2026
7 Digital-rights-management policies
and protections implemented to
safeguard digital content and data
FY 2026
8 Fraud-monitoring and investigation
capabilities enhanced to support
new identity-proofing solutions
for taxpayer-facing applications
Key dependencies
4.4 depends on projects in initiatives:
4.3
Initiatives dependent on projects in 4.4:
1.2-1.6, 1.8, 1.10-1.12, 2.1, 2.3, 4.5
The IRS will improve the storage and management of data to support improved taxpayer services
and enforcement
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FY 2023
2 Data stewardship pilot program launched
FY 2023
3 Initial enterprise data catalog published,
to be updated annually
FY 2023
4 Initial inventory of the IRS’s data assets
conducted to support planning and
change management for migrating
authoritative data stores and rebuilding
essential functionality into the Enterprise
Data Platform (EDP), to be updated
as needed
FY 2024
5 Completed evaluation of data gaps
and readiness for operational use
aligned to business needs
FY 2024
6 External data procured to support better
understanding of large business mergers,
acquisitions, and terminations
FY 2025
7 Near-real-time taxpayer service data
made available to IRS data scientists and
analysts via modern analytical tools
FY 2025
8 Operational staff users given access
to self-service data analysis and
report-building tools
Key dependencies
4.5 depends on projects in initiatives:
1.2, 4.1, 4.3, 4.4
Initiatives dependent on projects in 4.5:
1.1-1.6, 1.8-1.12, 2.1-2.4, 2.6, 2.7, 3.1-3.7,
4.6-4.8, 5.6
IRS employees will use data and insights to enhance delivery of tax administration and improve
the taxpayer experience
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FY 2024
2 Methodology developed and tested
for applying information-reporting to
enable the expansion of at-filing checks
FY 2024
3 Customer experience analytics improved
to identify taxpayers’ pain points
FY 2025
4 Comprehensive, coordinated case-
selection methods researched and tested
FY 2026
5 Risk-analytics capability developed
and tested to direct cases to the
most effective treatment options
Key dependencies
4.6 depends on projects in initiatives:
4.1, 4.2, 4.3, 4.5
Initiatives dependent on projects in 4.6:
1.1, 1.3, 1.4, 1.6, 1.8-1.12, 2.1-2.3, 2.5-2.7,
3.1-3.7, 5.8
The IRS will use enhanced data and explore additional innovative analytic techniques to improve
strategic planning, decision-making and compliance measurement
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5. Pursue leading-edge tools and techniques.
FY 2024
Expand market research to identify leading- 5 New methodologies formulated
edge advanced analytics tools and techniques
to enhance and expand the estimation
that are appropriate for tax administration
of tax gaps
enhancement.
6. Establish trustworthy analytics practices FY 2025
and policies. Establish and implement 6 Additional data-driven methods developed
trustworthy analytics practices and policies— for enterprise-wide optimization of
such as guiding principles, risk management resource allocation for enforcement
frameworks and governance—to ensure that
traditional statistical and advanced analytics
methods yield transparent, explainable, fair
outcomes. Key dependencies
7. Improve our ability to receive and use 4.7 depends on projects in initiatives:
data from foreign jurisdictions. Optimize 4.1, 4.2, 4.5
use of data related to activities outside the
United States to effectively pursue non- Initiatives dependent on projects in 4.7:
compliant persons subject to taxes in the U.S. 1.1, 1.3, 1.5, 1.9, 1.11, 2.2, 2.7, 3.1-3.7, 5.6, 5.8
8. Accelerate innovation in operations.
Streamline the transition of innovations
and accelerate experimentation to improve
operational workflows.
Milestones
FY 2023
1 Enhanced governance strategy
for advanced analytics defined
FY 2024
2 New advanced analytics methods
developed to better identify tax
noncompliance among high-priority
taxpayer segments, including high-
income, high-wealth taxpayers and
partnerships
FY 2024
3 New analytics-enabled capabilities
developed to support digital asset
compliance
FY 2024
4 Operating model created for enterprise
data-analytics development and
deployment spanning research,
operations, and IT
The IRS will engage with external partners to develop new insights that generate value
for taxpayers and policymakers
Where we are heading In so doing, they will be able to gain new insights
that inform policy and program priorities to improve
Throughout the government, data reflects the constituent services. The IRS will benefit from the
realities of Americans’ lives: employment, family development of innovative ways to address
structures, benefits eligibility and uptake, and tax administration challenges, enhanced rigor
demographics. Safe, privacy-preserving statistical in validating methods and findings, and continuous
findings derived from tax data offer more insights learning.
into the well-being of our population and economy,
which may help other government agencies design Key projects
and evaluate policies and programs that assist
the whole population, including those who are 1. Establish strategic plans and document
underserved or vulnerable. However, this can only research priorities. Enhance accountability
be achieved in an environment that ensures the and transparency in research planning by
highest level of protection to taxpayer information. developing strategic plans and documenting
We will leverage new technical and analytical research priorities for agencies and
methods to develop tools to meet this need. departments.
2. Strengthen and create research
We seek to increase and strengthen partnerships
partnerships. Foster research partnerships
with government agencies and external
to inform research, advance analytical methods,
researchers to improve the rigor of our
build employee skills and ensure the validity
research and support evidence-based
of findings.
policymaking and program implementation
throughout the government. The IRS has long 3. Develop new privacy-preserving analytic
partnered with external academic partners in methods. In partnership with privacy experts,
foundational research, using advanced analytics develop new, rigorous privacy-preserving
and statistical techniques to solve complex tax methods for sharing analytical insights while
administration problems. That said, necessary increasing the security of taxpayer information.
restrictions on data-sharing can hinder our ability 4. Support government-wide program
to generate insights from government agencies evaluation and evidence-building.
and data sources. However, new methods provide Develop new capacity for using aggregated
an opportunity to safely collaborate on issues and anonymized information derived from tax
that are important to taxpayers while preserving data to inform policy and program decisions
taxpayer privacy protections to generate insights beyond the IRS.
and advance research priorities that benefit the
American people.
Milestones
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FY 2023
2 New Office of Management and Budget
standard application process adopted
to annually facilitate the engagement
of non-IRS researchers in high-value
tax administration-related projects
FY 2023
3 Statistical service established to safely
support production of special tabulations
and reports to aid the Department
of the Treasury and other agencies
in evidence-building and program
evaluation, as permitted under law
FY 2024
4 Methods researched for automating
or streamlining the production of
high-value, customized statistics
Key dependencies
4.8 depends on projects in initiatives:
4.5
Initiatives dependent on projects in 4.8:
1.9
To offer taxpayers world-class service, we will invest in attracting, developing and retaining exceptional
talent. People are the heart of the IRS and our most valued asset. Despite momentous challenges
including funding, technology and staffing constraints, our employees remain resilient and are vital
to implementing the strategies and pursuing the priorities to meet all Plan objectives.
We will invest in and focus on people, equipping and empowering them with the technology, equipment,
training and tools they need to be successful. We will assess and reshape the workforce to meet future
requirements, foster a positive employee experience, and create a workplace that reflects the diversity
of the taxpayers we serve and the unique talents of each person. We will modernize how we attract, retain,
develop, and empower our people. Employees will have the modern tools and upgraded facilities they
need to perform at their best, collaborate effectively and build meaningful connections within and across
teams.
In the future, IRS employees will require a broader foundation of core competencies. We will need curious
problem-solvers who are technology- and data-savvy to power new ways of operating. Through training,
the workforce will transform from one where thousands of people process paper in cumbersome, manual
processes to a greater share of employees who provide high-quality services to taxpayers. To become
a data-centric organization, we expect the number of data scientists to grow significantly, and IRS
compliance functions will rely on specialized teams who respond to increasingly complex filings. In
addition to technical skills, we will seek out, cultivate and value skills like problem-solving, communication
and collaboration that are critical to excellent taxpayer and employee experiences. These changes will
allow us to work in more agile, innovative and proactive ways. We will embrace the increasing diversity
of our growing workforce and strive to be a more inclusive and accessible place where all employees can
thrive.
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We will grow and develop our talent while operating more efficiently
Who does the work When and where we work How we work
Visual is illustrative
Indicators of success
Strategic shifts
From To
Ineffective and outdated policies, technologies We will recruit, train and retain a workforce with
and processes make it challenging to attract, the skills and capabilities we need—people who
onboard and retain the talent we need. put customer service first and are able to use
our new technologies to work effectively.
Employees are constrained by limited resources We will improve the employee experience and
and growth opportunities. empower the workforce to drive better taxpayer
experiences, with clearer career pathways that
will improve retention and support career growth
and opportunity.
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Improve organizational structures
5.7 and governance: The IRS will
implement new organizational structures
and distributed and transparent decision
processes to support more collaborative,
effective and efficient tax administration
The IRS will implement fast, streamlined hiring processes that address challenges known today,
use data to match candidates to the right jobs, and deliver more effective onboarding programs
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4. Engage in best-in-class candidate
FY 2024
assessment. Reduce barriers to entry, improve 3 Position description (PD) review
the application experience and reduce skills
conducted, and most critical PDs
deficiencies by moving to digital-based skills
updated to include plain language
assessments. These assessments will focus
and commensurate compensation
on skills that correlate with success in a
particular role.
FY 2024
5. Simplify the hiring experience 4 Asynchronous interviews and digital
for candidates. Simplify and streamline the customer-service assessments for hiring
application process by building an applicant- integrated as standard for customer-
facing status tracker, creating a job-matching service representatives
aptitude test to help applicants find the right
roles more quickly, and developing a new, FY 2024
user-friendly, easily navigable application 5 Digital candidate assessments used
website that increases accessibility. as part of the candidate selection
6. Streamline the onboarding process for process for all roles
new hires. Ease barriers to smooth onboarding
through a standardized, improved welcome FY 2024
experience for new employees, provide 6 Redesigned hiring processes to improve
new employees with access and technology applicant experience and talent matching
more quickly, and offer more flexible training. implemented
7. Strategically automate and outsource
operations to increase capacity when FY 2025
7 Hiring status-tracker developed to
necessary. Explore technology options and
determine where contracting firms can be increase transparency in recruiting
engaged for work surges to support rapid
onboarding or automated processing when
necessary. Key dependencies
8. Review all position descriptions and job
5.1 depends on projects in initiatives:
requirements. Working with the Office of
4.2, 4.3
Personnel Management and the Department
of the Treasury, review and update position Initiatives dependent on projects in 5.1:
descriptions and qualification requirements, 1.9, 2.4, 2.7, 3.2-3.6, 5.2, 5.4
such as education and years of experience;
use analytics where possible, based on the
latest best practices; and identify where we may
be excluding potentially strong, suitable talent.
Milestones
FY 2023
1 Hiring plan driven by business demand
delivered
FY 2023
2 Additional geographic options for hiring
pursued
The IRS will build new talent pipelines and attract a workforce that reflects the diversity
of the people we serve
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5. Cultivate interest among top recruits
for critical roles. Elevate the recruiting Key dependencies
experience for critical roles with personalized
touchpoints and contacts, such as specialized 5.2 depends on projects in initiatives:
recruiters. These personal contacts will act 5.1, 5.3, 5.4, 5.6, 5.7
as liaisons who guide candidates through the
recruiting process. Initiatives dependent on projects in 5.2:
5.8
Milestones
FY 2023
1 Unified, enterprise-wide recruiting strategy
developed
FY 2023
2 Revamped IRS career page goes live
online
FY 2023
3 Pilot of “Lifting Communities Up” talent
hub successfully launched
FY 2023
4 Recruiters engaged to guide recruits
through the application process
FY 2024
5 Student pipeline programs launched
at initial round of schools
FY 2024
6 Plan developed for assessing and
monitoring representation, stratification
and employment patterns related to
diversity in the IRS workforce
FY 2024
7 First group of graduates from pre-hire
bootcamp (or similar outreach program)
onboarded as IRS employees
FY 2024
8 Pilot of private-sector talent rotations
launched
FY 2026
9 “Lifting Communities Up” talent hubs
established in additional underserved
communities
The IRS will improve the employee experience by offering more flexibility, building
a more collaborative team culture, and better equipping personnel
We will adopt a working model that values 2. Assess opportunities for new ways to
employees’ participation and includes more serve at the IRS. Review options for work
opportunities to work in various times, places arrangements that appeal to new types of
and manners that allow us to fulfill our mission. workers and tap into additional talent pipelines
We will create an IRS-wide flexibility strategy when traditional hiring is challenged. This may
to allow us to meet business needs and shift the include flexibilities such as part-time, seasonal,
workforce between high-demand filing season phased retirement, independent workers, surge
and normal operations. We will use similar or stand-by teams, and mission-focused
strategies to meet the needs of employees and telework or remote work when consistent with
attract new talent who expect workplace flexibility. taxpayer and business needs.
3. Enable workplace engagement and
As the IRS enables more digital tools and inclusion. Foster a work environment that
transitions away from processing paper, flexibility is grounded in respectful, equitable and
will become possible for more roles. In a nation inclusive conversations and actions—free
where many people in the workforce identify as of discrimination, harassment and reprisal—
independent or “gig” workers, a more flexible IRS with opportunities to build relationships across
working model could attract new sources the IRS and demonstrate appreciation for each
of talent in the future when traditional staffing other.
is not sufficient. We will take advantage of
employee preferences for flexibility to attract 4. Provide employees with the tools and other
and retain talented staff all over the country to resources they need. Provide employees with
meet taxpayer needs. We will ensure that all what they need to do their jobs comfortably and
employees have the tools, supplies and facilities capably, complementing our culture and
they need to do their jobs effectively. mentorship efforts in other initiatives.
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Workplace policies, systems and structures will
be more equitable and accessible, and we will
review them to make sure all employees can
operate authentically in their roles.
5. Improve IRS-wide recognition and individual
incentive programs. Empower managers
to meaningfully recognize employee actions
that embody our desired culture through
customer service and special contributions
to specific projects. Invest in the operations
necessary to confer monetary awards more
quickly after recognized actions.
6. Invest in the facilities and supplies
employees need to succeed. Modernize
office spaces, re-equip hoteling spaces
and proactively restock tools and supplies
to help employees work more effectively.
Milestones
FY 2023
1 Flexible work options piloted across
various roles
FY 2023
2 Most significant facility investments
addressed
FY 2023
3 Plan designed for delivering new
employee awards and educating
managers about reward options
and procedures
FY 2024
4 Plan implemented for awards tied to
performance or process improvements
Key dependencies
5.3 depends on projects in initiatives:
1.2, 1.3, 5.7, 5.8
The IRS will deliver growth and learning opportunities by developing attractive career pathways
for all employees, integrating training and skill-building, and better equipping managers to lead
high-performing teams
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build employee confidence in management 8. Refresh and promote our framework
and improve communication of career for leadership competency. Establish a
development priorities. leadership model to evaluate employees and
build a common understanding of what it means
3. Update the value proposition of managerial
to be a leader at the IRS. Identify and develop
roles. Redesign managerial roles to provide
the skills needed for inspiring, strategic team
compelling growth opportunities for
leadership.
top performers. Deliver a better experience
for supervisors at all levels by assessing 9. Reinstitute basic competency training
compensation, training, coaching, resourcing, in foundational skills. Deploy and refresh
independence and flexibility. Identify core-competency training for all employees,
managerial roles that have high turnover or including research and writing skills, basic
are hard to fill and develop plans to support analysis and logic capabilities, critical thinking
them better. and problem-solving abilities, customer service,
cultural competency and leadership skills.
4. Scale the IRS University enterprise-wide
Implement competency assessments for these
as a standard-bearer for training excellence.
foundational skills to evaluate and continually
Build an accessible and multi-modal set of best-
refresh this foundational training.
practice training programs that emphasize
core competencies—such as analytical
thinking, managing in hybrid and remote Milestones
environments, and customer service—while
preparing employees with the skills to succeed FY 2023
in the digital environment of the future. 1 IRS-wide leadership, mentorship,
5. Build a culture of mentorship and and coaching programs established
apprenticeship that celebrates skills
development and knowledge-sharing. FY 2024
2 Capabilities of the centralized learning
Update mentorship and apprenticeship
programs—such as peer-to-peer coaching— platform enhanced
and dedicate time for people to invest in
these critical, people-oriented activities. FY 2024
3 IRS University launched enterprise-wide
6. Give employees more inclusive
opportunities to learn, grow, and thrive
FY 2024
at the IRS. Grant employees opportunities 4 Core competency models and career
to reach their full potential through career
paths for all employees developed
planning, performance management and new
learning opportunities. Expand opportunities for
cross-functional development to make FY 2024
5 Leadership competency framework
it easier to change roles throughout the IRS.
Monitor workforce diversity at all levels of launched and implemented across
leadership to help build an IRS that looks like the IRS
the communities we serve and to promote
equitable treatment of all employees.
7. Establish a flexible, case-based training Key dependencies
model. Develop a case-based training model
5.4 depends on projects in initiatives:
flexible enough to meet individual employees’
needs that encourages a shift to ongoing, 4.3, 5.1, 5.3, 5.5
collaborative learning.
Initiatives dependent on projects in 5.4:
2.4, 3.2-3.7, 5.2, 5.5
The IRS will create hiring and training programs to build a data-savvy workforce that uses
the improved data environment to serve taxpayers and meet mission goals more effectively
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Key dependencies
5.5 depends on projects in initiatives:
5.4
The IRS will leverage workforce planning best practices to forecast and meet hiring demand more
effectively to avoid disruption and satisfy business needs
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Milestones
FY 2023
1 Human capital business partners
integrated into process for informing
human capital strategy
FY 2025
2 Legacy systems for strategic workforce
planning joined into one technology
platform for streamlined management
of employee data and use of advanced
workforce analytics
Key dependencies
5.6 depends on projects in initiatives:
1.12, 4.3, 4.5, 4.7, 5.5
The IRS will implement new organizational structures and distributed and transparent decision
processes to support more collaborative, effective, and efficient tax administration
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FY 2024
2 Enterprise reorganization plan created,
articulating a path to instilling modern
management practices throughout the
IRS and a structure designed to best
serve taxpayers and tax professionals
FY 2025-2027
3 Priority redesigned organizational
structures established
Key dependencies
5.7 depends on projects in initiatives:
1.3, 5.5, 5.8
The IRS will build a customer-centric culture by empowering employees and leaders to put
the customer first and rewarding outstanding service
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3. Hold the organization accountable for
FY 2023
creating the customer-centric, people-first 2 Change management practices built
culture to which it aspires. Select culture
into all initiatives and project plans and
“champions” throughout IRS leadership to steer
incorporated into measures of success
the organization to an enterprise-wide culture
as appropriate
designed to put customers first, communicate
a compelling change story and monitor
measures of culture and leadership. FY 2023
3 Initial IRS policies revised and
4. Adopt agency-wide customer service communicated to employees regarding
standards to help employees work together risk tolerances and risk appetites for
toward excellent service. Incorporate practices and behaviors that enable and
customer-service standards to become a support cultural change
simpler, real-time, accessible, personalized and
trusted service. Incorporate these standards FY 2023
across the IRS in organizational performance 4 Culture champions appointed to lead
metrics, employee performance goals, decision- ongoing projects throughout the IRS
making processes, business processes, policy to achieve, communicate and monitor
design, governance and other areas. the IRS’s cultural aims as part of the
5. Develop new policies and procedures that Transformation and Strategy Office
allow employees to improve processes to
support empowerment and better ways of FY 2024
working. Evaluate processes and delegations
5 Leadership commitments developed to
of authority, encourage employees to ask incentivize and hold leaders accountable
questions, challenge existing processes, and for their roles in driving cultural change
suggest, test, and enact process changes that
improve the way we work to support our culture FY 2024
of service. 6 Customer service standards created,
implemented and measured IRS-wide
6. Evaluate and communicate appropriate
risk tolerances and risk appetites to support
cultural change. Empowering the workforce FY 2024
7 Programs and policies developed
to serve customers, make decisions at lower
levels and change processes to facilitate better and implemented to support and monitor
ways of working must be enabled by cultural health and the shift toward
appropriate risk tolerances and risk appetites. a culture of service
The IRS will adopt and enhance policies that
tolerate appropriate risks to support culture FY 2024-2027
8 Ongoing monitoring of cultural shift
change. This may mean, for example,
focusing more on consistency of outcome
rather than consistency of process, or shifting
from minimizing agency risk to minimizing Key dependencies
taxpayer risk.
5.8 depends on projects in initiatives:
Milestones 1.1-1.3, 1.11, 1.12, 4.6, 4.7, 5.2, 5.5
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Initiative depends on Initiatives dependent on
Initiative projects in initiatives: projects in this initiative:
3.4 Expand enforcement for high-income 1.3, 3.1, 3.7, 4.5-4.7, None
and high-wealth individuals 5.1, 5.4-5.8
3.5 Expand enforcement in areas where 1.3, 3.1, 3.7, 4.5-4.7, None
audit coverage has declined to levels 5.1, 5.4-5.8
that erode voluntary compliance
3.6 Pursue appropriate enforcement for 1.3, 3.1, 3.7, 4.5-4.7, None
complex, high-risk, and emerging issues 5.1, 5.4-5.8
3.7 Promote fairness in enforcement 3.1, 4.5-4.7, 5.4-5.8 3.1-3.6
activities
4.1 Transform core account data and 1.2, 4.3 1.2, 1.4, 1.6, 1.8, 1.11, 2.1,
processing 4.5-4.7
4.2 Accelerate technology delivery None 1.11, 2.3, 4.6, 4.7, 5.1
4.3 Improve technology operations None 1.2, 4.1, 4.4-4.6, 5.1, 5.4, 5.6
4.4 Continue to ensure data security 4.3 1.2-1.6, 1.8, 1.10-1.12, 2.1,
2.3, 4.5
4.5 Maximize data utility 1.2, 4.1, 4.3, 4.4 1.1-1.6, 1.8-1.12, 2.1-
2.4, 2.6, 2.7, 3.1-3.7, 4.6-4.8,
5.6
4.6 Apply enhanced analytics capabilities 4.1-4.3, 4.5 1.1, 1.3, 1.4, 1.6, 1.8,
to improve tax administration 1.9-1.12, 2.1-2.3, 2.5-2.7,
3.1-3.7, 5.8
4.7 Strategically use data to improve tax 4.1, 4.2, 4.5 1.1, 1.3, 1.5, 1.9, 1.11, 2.2,
administration 2.7, 3.1-3.7, 5.6, 5.8
4.8 Partner to expand insights 4.5 1.9
5.1 Redesign hiring and onboarding 4.2, 4.3 1.9, 2.4, 2.7, 3.2-3.6, 5.2, 5.4
5.2 Attract a talented and diverse workforce 5.1, 5.3, 5.4, 5.6, 5.7 5.8
5.3 Improve the employee experience 1.2, 1.3, 5.7, 5.8 5.2, 5.4
5.4 Help employees grow and develop 4.3, 5.1, 5.3, 5.5 2.4, 3.2-3.7, 5.2, 5.5
5.5 Develop a data-savvy workforce 5.4 1.1, 1.3, 1.4, 1.12, 2.2, 2.7,
3.1-3.7, 5.4, 5.6-5.8
5.6 Elevate workforce planning strategy 1.12, 4.3, 4.5, 4.7, 5.5 1.1, 1.9, 2.2, 2.4, 3.2-3.7, 5.2
5.7 Improve organizational structures 1.3, 5.5, 5.8 1.1, 1.3, 1.5, 1.9, 2.1, 2.2,
and governance 2.4, 3.1-3.7, 5.2, 5.3
5.8 Build a culture of service and 1.1-1.3, 1.11, 1.12, 4.6, 1.9, 3.1-3.7, 5.3, 5.7
continuous improvement 4.7, 5.2, 5.5
Print 11x17
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How change management
and stakeholder engagement
will be delivered
We acknowledge that the IRS will require
significant cultural change to execute this Strategic
Operating Plan and successfully implement the
initiatives and projects to create a more customer-
centric organization. The Transformation and
Strategy Office will design processes and
structures to drive and reinforce the behaviors and
mindsets needed to support this culture change.
The Transformation and Strategy Office will also
help IRS leaders throughout the organization
become more active and visible change
champions as they communicate a compelling
vision and help colleagues understand and support
transformational change.
FY 2023-FY 2024
X.X: Initiative number CE: Climate and Energy IA: Immediate Actions
1.1 Expanded hours available at the TACs for appointments and on-demand service with staffing
to meet expected demand
1.2 Certain documents, paper correspondence and non-tax forms digitalized and enhanced scanning
of key tax forms
1.4 Enhancements to individual and online Tax Pro Accounts implemented and Business Online
Accounts launched
1.6 Business transcripts available online and in easy-to-read format through Business Online Account
1.6 Current transcripts updated to be user-friendly and available in Spanish and other languages
1.11 Improved taxpayer tracking tools in online accounts for filing season 2024
CE Information page about clean vehicle credits launched and detailed FAQs for tax credits
for residential clean energy and energy efficiency improvements made available
CE Tax credit transfer process to reduce price of clean vehicle at a dealership established
CE Digital intake processes to facilitate claiming tax credits by state and local governments,
tribal governments, and nonprofit organizations developed
2.1 Taxpayers and preparers notified for mismatches against simple types of income
(W2s and 1099 NECs) and processing errors
2.4 Outreach and campaigns expanded to increase awareness of tax certainty programs
and their benefits to taxpayers with complex issues
2.6 Pilot program for new non-filer interventions launched
IA 5,000 additional customer service representatives onboarded and callback options expanded
3.1 Centralized compliance planning function established to identify potential high-risk compliance
cases
3.1 Data and research approach implemented to inform and continuously refine compliance coverage
levels needed to promote voluntary compliance
3.2-3.5 First wave of specialists hired and onboarded to work toward increasing compliance coverage
rates
4.1 Modernized Information Returns intake platform deployed to provide a free online portal
for businesses to file Form 1099-series information returns
4.1 IRS systems improved to streamline access to individual taxpayer data for service and
compliance purposes via secure, standardized application programing interfaces (APIs)
4.2 Integrated business and IT product-and-platform operating model implemented to accelerate
technology delivery
4.7 New methodologies formulated to enhance and expand the estimation of tax gaps
5.1 Hiring processes redesigned to improve applicant experience and talent matching implemented
5.2 Unified, enterprise-wide recruiting strategy developed
5.2 Revamped IRS career page goes live online
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FY 2023-FY 2024
5.2 Pilot of “Lifting Communities Up” talent hub successfully launched
5.4 IRS University launched enterprise-wide
5.4 IRS-wide leadership, mentorship and coaching programs established
5.8 Customer service standards created, implemented and measured IRS-wide
FY 2025-FY 2028
1.2 High-priority forms, returns and certifications available for electronic filing and digitalization
1.2 High-priority end-to-end digital processes implemented
1.2 Additional forms, returns and certifications available for electronic filing and digitalization based
on prioritization plan
1.6 Online accounts upgraded to incorporate user-friendly views of account and return information
(e.g., notices, letters, account history, payment history, balances due, etc.)
1.9 New contacts launched for lawful non-filers who may be eligible for a credit or deduction to
ensure they are aware of their eligibility and have the tools and assistance necessary to claim
appropriate credits or deductions
1.10 Integrated payment capability by card and digital wallet available
1.11 Real-time processing estimates launched with data analytics to provide more accurate status
messaging
1.11 Audit status and other process-tracking launched and enhanced based on prioritization plan
2.1 Taxpayers and preparers notified of potential filing issues including incentives related to children
and other dependents and other issues to be determined
2.3 Capabilities launched for taxpayers and tax professionals to receive and respond to additional
notices electronically
2.6 Capability launched for taxpayer access to a broader range of self-service debt repayment tools
through online accounts
3.1 Taxpayer compliance cases selected by centralized compliance planning function using new
analytics systems and refined risk-based case selection and routing
3.2-3.6 Workforce hired and onboarded to achieve compliance coverage rates
4.1 Business master file retired with systems and data migrated to modern solution
4.1 Individual master file retired with systems and data migrated to modern solution
4.5 Near-real-time taxpayer service data made available to IRS data scientists and analysts via
modern analytical tools
4.6 Data delivered to support a “Taxpayer 360°” holistic view based on business need and the
prioritization established during the development of taxpayer service tools
5.1 Hiring status tracker developed to increase transparency in recruiting
5.2 “Lifting Communities Up” talent hubs established in additional disadvantaged communities
5.6 Legacy systems for strategic workforce planning joined into one technology platform
for streamlined management of employee data and use of advanced workforce analytics
5.7 Priority redesigned organizational structures established
Print 11x17
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IRA allocations financial summary – FY 2022-FY 2031 ($ billion)
Based on what we know today, we believe that we year inflationary adjustments), and our FY 2024
will need an ongoing investment on top of the Program Increase is not funded, we will need to
allocated IRA funding to deliver all of the use 100 percent of IRA Taxpayer Service funds
transformation objectives outlined in this Plan in to provide acceptable levels of walk-in and phone
taxpayer service improvements and information assistance, and these funds would be fully
technology modernization. We will have a more exhausted in less than four years, with limited
significant shortfall in our ability to deliver ability to deliver on other transformation projects
transformational change if annually appropriated that also require Taxpayer Service funding. This
levels are limited to the enacted discretionary IRS estimate is based on the investment required to
budget of FY 2022 and not adjusted for inflation. restore the staffing of customer service
representatives to acceptable levels, along with the
In the Taxpayer Service account, the IRS need for new investments needed to maximize the impact of
resources to address taxpayer inquiries has grown the energy security provisions included in the IRA
steadily for the last decade. Several factors drove (which was not fully funded separately in the
these increases including legislative expansions of legislation).
IRS authority and new tax law provisions. Our
estimates suggest that if the appropriated funding
levels for FY 2023 are maintained (including future
IRS IRA Strategic Operating Plan 129
Part III: Managing the Transformation
Funding for the IRA Strategic Operating Plan
A second issue exists in the funding for information Department of Energy based on their past
technology in both the Operations Support account experiences in supporting the Treasury
and the Business Systems Modernization (BSM) Department and the IRS in the implementation
account. The zeroing out of BSM in the FY 2023 of energy tax credits and will be refined as part
Consolidated Appropriations Act, 2023, creates an of future planning processes. These estimates
additional significant challenge in that we will not include costs for necessary IT modernization
be able to meet the IT modernization projects efforts and for hiring staff to support the
described in the Plan without restoration of that development of implementation guidelines,
funding as requested in the FY 2024 President’s associated compliance efforts and anticipated
Budget. The funding included in the Consolidated customer-service needs. Successful
Appropriations Act, 2023 for operations support is implementation of these provisions is necessary
insufficient to cover normal operations costs, which to effect the energy security and clean energy
will require us to supplement our current funding policy goals included in the legislation.
needs with IRA funding.
As noted, we will monitor and report specific IRA
Funding in the enforcement account will be used costs quarterly at the appropriation and program-
consistent with the Treasury directive that IRA activity levels in accordance with our current
resources are not used to increase the share of financial-reporting practices. Actual costs will be
small businesses or households earning $400,000 reported in our annual budget submission and in
or less that are audited relative to historic levels. an annual update to this Plan. The following
Any growth in staffing above historic levels will be includes our estimated spending through FY 2024.
limited to focusing on high dollar noncompliance
such as large corporations, large partnerships and
high-income individuals where current coverage
does not promote taxpayer compliance.
Note: Estimated obligations for a year represent estimated planned spending and associated full time
equivalents, but do not translate into total hiring figures. Through the end of FY 2024, we estimate total
growth of approximately 20,000 employees funded by the Inflation Reduction Act. Please refer to the
President’s Budget FY 2024 for further information on discretionary funding.
131
Stakeholders impacted
by the Strategic Operating Plan
The IRS cannot achieve effective tax The tax community
administration alone; we must include a broad
ecosystem of stakeholders. This Strategic Continued IRS partnership with tax professionals
Operating Plan has been developed with our and others in the tax community is critical to the
stakeholders’ needs and partnership in mind. success of this Plan. The IRS partners with state
Successfully implementing the strategy outlined tax administrations and with the tax industry—
in this Plan will rely on partnership with and including software makers, payroll providers and
continuous feedback from all those impacted. others—to address issues and optimize progress.
Some of these stakeholder groups are The IRS has a history of successful partnerships
described below. leveraging the knowledge and insight of the tax
community. The IRS also works closely with
groups formed by the Federal Advisory Committee
Taxpayers and tax professionals Act, the Internal Revenue Service Advisory
Council (IRSAC), the Treasury Tribal Advisory
This Plan outlines how the IRS will transform to Committee (TTAC), and the Electronic Tax
significantly improve service for the entire base of Administration Advisory Committee (ETAAC). The
American taxpayers. Within this Plan, taxpayers IRS will continue its strong relationship with the tax
are referred to broadly and include all people and community in these ways and will seek to enhance
groups whom we serve, including: services and experiences with the IRS to better
support taxpayers, tax professionals and the
• Individuals and families overall tax community.
• Businesses large and small
• Charities and other tax-exempt organizations Current and future IRS employees
• International taxpayers
This Plan outlines how IRS employees and leaders
• Federal, state, and local governments
should guide and prioritize their work based
• Tribal nations on the organization’s vision, and how we plan
to get there. This Plan also describes the
• Tax professionals and others who assist
transformational objectives that affect the work
and serve taxpayers
environment, skills and capabilities, and pace
Within these groups, the IRS also recognizes that of change needed to transform the IRS workforce.
many populations have unique needs. We are For the National Treasury Employee Union
committed to strengthening our relationships with (NTEU), it outlines the IRS’s vision for the future
those we serve to better understand and respond workforce and opportunities for partnership
to their needs. The new services, resources and to ensure that the IRS is an employer of choice.
other initiatives outlined in this Plan will be
All IRS employees and business units will be
implemented with accessibility for all, including
involved in and impacted by this Plan, and all
taxpayers with disabilities, those with limited
business units and employees stand to benefit
English proficiency, and any other historically
from improvements to systems, processes,
underserved and underrepresented communities.
technology, data, governance, human capital
management, organizational structure and culture.
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For example:
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investment in low-income communities and coal
communities. We have made significant progress
developing processes to facilitate upcoming
access to tax incentives by state, local, and tribal
governments, as well as non-profit organizations.
We have also focused on outreach and
engagement, so that taxpayers understand the
changes and are aware of the new benefits
available under the IRA. Notably, we launched a
clean vehicle consumer website and educational
campaign to inform consumers, manufacturers and
sellers about available credits for new, used and
commercial clean vehicles.
Goal 1: Promote equitable economic growth recovery IRS IRA SOP Objectives
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.IRA transformation objectives
A historical lack of investment in the IRS has limited its ability to keep pace
Investment in the IRS has historically lagged growth in demand for its services, making transformation
a priority. Between 2010-2021, funding appropriated to the IRS declined by 22% in real terms. Even
though filings increased by more than 8% between 2011-2019, the IRS workforce is now the same size
as it was in the 1970s—with fewer auditors than at any time since World War II.9 Facing uncertain
appropriations year after year, the IRS, which operates in similar ways to some of the world’s largest
financial institutions, has often been forced to freeze external hiring and pause innovation and technology
investment, all while the largest financial institutions steadily increased their annual technology spending
to approximately 3% of expenses between 2010-2019.10 While the IRS has worked hard to meet the needs
of the nation despite limited resources, these resource constraints have eroded the level of service and
caused the taxpayer experience to deteriorate.
Globally, tax authorities are using innovative ways to help taxpayers and suggest ways in which the IRS
can ease the American taxpayer experience. They are utilizing technology to improve taxpayer services
and compliance along all phases of the taxpayer journey: pre-filing, filing and post-filing. Improving the
experience and service we provide taxpayers will increase our competitiveness on a global scale and
help to address the tax gap.
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Current processes make it difficult for taxpayers
to file their taxes independently, and resource
constraints limit the IRS’s ability to monitor
compliance, both of which contribute to the tax gap
80 %
time of 22 minutes. In the 2021 Taxpayer
of consumers of public
Experience Survey, only 63% of taxpayers
services use digital
reported being satisfied with the filing process,
channels
most often citing concerns with customer
service and communications, long waiting times
90 %
for processing and refunds, and the complexity of consumers expect
of forms. Nearly 60% of taxpayers reported that an immediate and
they had an issue they needed the IRS to help seamless response to
with, but they had difficulty reaching the IRS.11 customer service needs
Ø Meanwhile, customer experience demands
have evolved, and taxpayers want a more
seamless filing process. The stakes for
delivering a service experience that taxpayers
find easy and helpful are high: Americans’
service interactions with the IRS strongly
influence their level of satisfaction with
government. Taxpayers expect the technology
they use in their service interactions with tax
authorities to be just as seamless and simple
as what they encounter in the commercial
world. Taxpayers expect the IRS to deliver
seamless and simple tax filing, responsive
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Ø Resolving simple mistakes is often a lengthy Ø The rise in the breadth and complexity
process. Current IRS compliance processes of tax administration has outpaced the IRS’s
are frequently initiated well after the time ability to effectively monitor compliance,
of filing. Several years may go by after filing given its limited resources. Over the last
before the IRS contacts a taxpayer about an decade, the total number of annual tax return
issue. For example, less than 1% of automated filings the IRS received has increased by more
under-reporting cases—cases that involve than 15 million. Over the same period, the
under-reporting income or claiming too many number of revenue agents employed at the IRS
deductions—and less than 40% of has decreased by nearly 35%.21 As a result, the
correspondence and field audits are started total number of audits has fallen to historical
within six months of filing. On average, these lows. The IRS has struggled to dedicate the
cases are not resolved until more than 20 resources necessary to proactively monitor
months after filing.19 In some cases, taxpayers compliance. The monitoring shortfall has been
may make the same mistake multiple years in particularly pronounced among taxpayer groups
a row before the original issue is addressed. with more complex income and returns as the
This causes challenges, as taxpayers may no economy has shifted. The IRS has noted
longer be able to remember their prior situation significant growth in taxpayer segments more
or may not have real-time access to the likely to have opaque sources of income or tax
information they need. situations. For example, while total tax return
filings increased by 13% from 2011 to 2021,
Ø Global tax authorities are using innovative
filings by pass-through entities, including
ways to help taxpayers correct their filings.
partnerships and S corporations, increased
In the filing phase, there is a trend toward
by 26% over the same period.22 However,
making it easier to direct-file and nudging
monitoring the compliance of pass-through
taxpayers to self-correct potential issues.
entities—particularly large and more complex
Australia’s tax authority uses statistical
ones—requires more IRS resources. As a result
techniques to flag potential risks in returns
of funding limitations, the audit coverage rate
for filers based on an automated review of a
has fallen. While the IRS audited 4.4% of pass-
return at the time of filing. The authority gives
through entities in 2010, that number fell to
taxpayers the option to correct their returns
0.1% in 2017 (the most recent tax year with
before final submission.20
nearly all audits closed), and audits have
continued to decrease.23 Additionally, filings
by taxpayers who report income higher than
Because the complexities of the $500,000 have grown by over 70% from 2011
tax-filing process result in errors, to 2019, while the IRS’s audit coverage rate for
enforcement efforts are often spent that income group has fallen by 76% over the
on unintentional mistakes, rather same period.24
than intentional noncompliance
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Ø information, self-service changes and employee Ø The IRS has put into place organizational
enablement. These changes will impact every structures to promote and enhance the
interaction a taxpayer has with the IRS. IRS application of data and analytics solutions that
employees and taxpayers currently use over will improve IRS operations and mission
600 applications to conduct the business of the effectiveness, but these efforts are not fully
IRS, many of which are custom-built and run integrated into all IRS work. Efforts to date
on-premises in IRS data centers. The include standing up the Data and Analytics
integrations among these applications—when Strategic Integration Board (DASIB) and the
they exist—usually use custom, single-use code IRS Data Analytics Advisory Group (DAAG)
to share data only between two applications, to prioritize and govern data and analytics
also known as point-to-point integrations. strategy and activities. Further, the IRS has
Because many of these applications were established a Chief Data and Analytics Officer
developed in different computing eras over the role to oversee data, analytics and advanced
past 20 or so years, they rely upon a specific technology capabilities across the enterprise.
infrastructure configuration and complex
Ø Global tax administrations use data
development and deployment processes, which
and analytics to improve the taxpayer
increase cost, risk and staff training time.
experience, compliance and operations
Ø The core pipeline of incoming tax returns is to generate value and reduce burdens on
designed to manage paper forms coming into taxpayers and the economy. For example,
regional service centers. Moving forward, the Canada’s tax authority directly administers
IRS will not only replace information systems CA$24 billion in child benefit payments
that use legacy programming languages but will to 3.3 million eligible families upon receiving
also change the underlying logic and birth/custody data from hospitals, birth
processing to post transactions to a database— registration centers and taxpayers.27 Australia’s
like any modern application—rather than using tax authority uses advanced analytics to
the sequential file process that happens today. improve compliance to compare business
These changes will enable self-service expenses to similar taxpayers; upon detecting
capabilities that will foster transparency for an anomaly, taxpayers are prompted to self-
taxpayers (e.g., the ability to update accounts correct. In 2020, 340,000 taxpayers (7.5%
and track refund status). of online filers) were prompted to review their
returns, resulting in pre-filing changes with
Ø The IRS is not using data as effectively as
an estimated annual revenue impact of A$37
it can to inform its operations. The pace of
million.28
data generation continues to accelerate.
Effective use of data and analytics can produce
tremendous value for organizations and
customers. The IRS captures data through
taxpayer filings and many types of third-party
information returns, as well as the full range
of operational interactions with taxpayers.
As greater numbers of returns/forms are filed
digitally, we can more fully capture relevant
data elements, while scanning and digitalization
provide new opportunities to capture data from
paper interactions (including forms and other
correspondence). Additionally, we can do more
to identify appropriate external data sources
that may add value by improving the taxpayer
experience and informing compliance
approaches.
1. Letter from Congressional Budget Office, Additional 26. Australian Taxation Office Annual Report 2021-22,
Information About Increased Enforcement by the UK HMRC Corporate Report 2021 to 2022
Internal Revenue Service, August 25, 2022
27. Canada Revenue Agency
2. IRS Earned Income Tax Credit & Other Refundable
28. Australian Taxation Office
Credits: EITC Participation Rate by States Tax
Years 2012 through 2019 29. IRS Strategic Plan 2022-2026, Goal 3: People
3. IRS Data Book 30. Bureau of Labor Statistics Employment Situation
Summary, July 2022
4. IRS Data Book
31. U.S. Bureau of Labor Statistics, Occupational
5. IRS Statistics of Income; Partnership data by size of
Outlook Handbook: Data Scientists
total assets
32. 2017-2020 Entrance Survey ; FEVS – IRS results,
6. IRS Data Book
2017-2019
7. IRS Data Book
33. McKinsey & Company, US Public Sector Great
8. IRS Entrance Survey; McKinsey & Company, US Attrition, May 2022
Public Sector Great Attrition, May 2022
34. Ibid.
9. IRS Data Book
35. Ibid.
10. “How is IT Spending Changing Banking?,”
University of Chicago, March 2022
11. 2021 Taxpayer Experience Survey
12. 2021 Taxpayer Experience Survey
13. National Taxpayer Advocate Objective Report to
Congress, FY23; National Taxpayer Advocate
Annual Report to Congress 2021.; IRS Data Book
14. France Ministry of Finance, Sweden Skatteverket
15. Canada Revenue Agency – How to Apply for the
Canada Child Benefit
16. Ireland Revenue
17. IRS Data Book
18. IRS Earned Income Tax Credit & Other Refundable
Credits: EITC Participation Rate by States Tax
Years 2012 through 2019
19. IRS Congressional Budget Justification & Annual
Performance Report and Plan, FY2022
20. Australian Taxation Office
21. IRS Congressional Budget Justification & Annual
Performance Report and Plan, FY2022
22. IRS Data Book
23. IRS Data Book
24. IRS Data Book
25. IRS updates tax gap estimates; new data points the
way toward enhancing taxpayer service, compliance
efforts, October 28, 2022