IRS Inflation Reduction Act Strategic Operating Plan Highlights

Utilizing the 150-page plan, the IRS endeavors to transform customer service and shrink the tax gap. The overall vision as stated in the plan is as follows:

Anticipated outcomes from the execution of the plan include:

• World-class service experience
• Digital-first organization
• Improved take-up of tax incentives by eligible taxpayers
• Effective enforcement
• Employer of choice within government and industry

The plan contains five objectives with underlying initiatives, milestones, and planned appropriations for each.  The objectives and funding are as follows:

1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible. $4.3B
2. Quickly resolve taxpayer issues when they arise. $3.2B
3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap. $47.4B
4. Deliver cutting-edge technology, data, and analytics to operate more effectively. $12.4B
5. Attract, retain, and empower a highly-skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers. $8.2B

Note: Funding totals above fall short of the IRA total due to an additional allocation of $3.9B for energy security.

Additionally, the plan offers a high-level roadmap by fiscal year for implementing the specified initiatives.  The plan also shows the allocation of the $79.4B in funding by objective, as well as by appropriations account which is as follows:

• Taxpayer Services - $3.2B
• Enforcement - $45.6B
• Operations Support - $25.3B
• Business Systems Modernization - $4.8B
• Clean Energy - $0.5B

Commenting on the plan, IRS Commissioner Danny Werfel said the IRS wants to become a “world-class customer service operation” with digital tools and modern platforms. According to the plan, the IRS of the future will use data-driven decision-making and enhanced data and analytics; provide taxpayers with easy, secure access to their data; ensure privacy and security; and retire outdated legacy IT systems and invest in new technology.

Federal contractors will likely find opportunities to assist the IRS in these modernization efforts, especially in the areas of IT infrastructure upgrades and modernization, legacy system modernization, data and analytics investments, and workforce training and education.