Internal Revenue Service Inflation Reduction Act Strategic Operating Plan FY2023 - 2031This Strategic Operating Plan ... outlines how we will deploy the investments in the IRA to better serve taxpayers, tax professionals, and the broader tax ecosystem. We will improve the taxpayer experience through better customer service, clearer guidance on how to correctly file taxes, increased options for filing electronically, and robust online accounts to take care of business quickly and independently. We will utilize tailored solutions to meet the diverse needs and preferences of all taxpayer groups.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. Internal Revenue ServiceIRS_02a280ca-54c6-11e4-896e-d0dd66263f6eDaniel I. WerfelCommissioner of Internal RevenueCongressIn 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. Department of the TreasuryShortly 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.IRS StakeholdersStakeholders impacted by the Strategic Operating Plan ~ The IRS cannot achieve effective tax administration alone; we must include a broad ecosystem of stakeholders. This Strategic Operating Plan has been developed with our stakeholders’ needs and partnership in mind. Successfully implementing the strategy outlined in this Plan will rely on partnership with and continuous feedback from all those impacted. Some of these stakeholder groups are described below.America's TaxpayersTaxpayers and tax professionals ~ This Plan outlines how the IRS will transform to significantly improve service for the entire base of American taxpayers. Within this Plan, taxpayers are referred to broadly and include all people and groups whom we serve, including: ^ * Individuals and families ^ * Businesses large and small ^ * Charities and other tax-exempt organizations ^ * International taxpayers ^ * Federal, state, and local governments ^ * Tribal nations ^ * Tax professionals and others who assist and serve taxpayers ^^ Within these groups, the IRS also recognizes that many populations have unique needs. We are committed to strengthening our relationships with those we serve to better understand and respond to their needs. The new services, resources and other initiatives outlined in this Plan will be implemented with accessibility for all, including taxpayers with disabilities, those with limited English proficiency, and any other historically underserved and underrepresented communities. Tax ProfessionalsTax CommunityThe tax community Continued IRS partnership with tax professionals and others in the tax community is critical to the success of this Plan. The IRS partners with state tax administrations and with the tax industry -- including software makers, payroll providers and others -- to address issues and optimize progress. The IRS has a history of successful partnerships leveraging the knowledge and insight of the tax community.IRS Advisory CommitteesThe IRS also works closely with groups formed by the Federal Advisory Committee Act, the Internal Revenue Service Advisory Council (IRSAC), the Treasury Tribal Advisory Committee (TTAC), and the Electronic Tax Administration Advisory Committee (ETAAC). The IRS will continue its strong relationship with the tax community in these ways and will seek to enhance services and experiences with the IRS to better support taxpayers, tax professionals and the overall tax community. Internal Revenue Service Advisory Council (IRSAC)Treasury Tribal Advisory Committee (TTAC)Electronic Tax Administration Advisory Committee (ETAAC)IRS EmployeesCurrent and future IRS employees This Plan outlines how IRS employees and leaders should guide and prioritize their work based on the organization’s vision, and how we plan to get there. This Plan also describes the transformational objectives that affect the work environment, skills and capabilities, and pace of change needed to transform the IRS workforce.National Treasury Employee Union (NTEU)For the National Treasury Employee Union (NTEU), it outlines the IRS's vision for the future workforce and opportunities for partnership to ensure that the IRS is an employer of choice. All IRS employees and business units will be involved in and impacted by this Plan, and all business units and employees stand to benefit from improvements to systems, processes, technology, data, governance, human capital management, organizational structure and culture. IRS Business UnitsWage and Investment (WI)Wage and Investment (WI), Small Business/Self-Employed (SB/SE), Large Business and International (LBI), Tax Exempt and Government Entities (TEGE), Criminal Investigation (CI), the Independent Office of Appeals, the Taxpayer Advocate Service (TAS), the Return Preparer Office (RPO), the Taxpayer Experience Office (TXO), the Office of Professional Responsibility (OPR) and the Whistleblower Office will lead, support and benefit from initiatives to improve the ways in which we serve customers, interact with those who prepare returns, select cases that need compliance work, improve work processes and enforce the tax laws.Small Business/Self-Employed (SB/SE)Large Business and International (LBI)Tax Exempt and Government Entities (TEGE)Criminal Investigation (CI)Independent Office of AppealsTaxpayer Advocate Service (TAS)Return Preparer Office (RPO)Taxpayer Experience Office (TXO)Office of Professional Responsibility (OPR)Whistleblower OfficeInformation Technology (IT)Information Technology (IT), Research, Applied Analytics and Statistics (RAAS), Online Services (OLS), Enterprise Digitalization, and Enterprise Case Management (ECM) will lead and support the design and development of cutting-edge data, analytics, systems and technology to enable transformationResearch, Applied Analytics and Statistics (RAAS)Online Services (OLS)Enterprise DigitalizationEnterprise Case Management (ECM)Human Capital Office (HCO)The Human Capital Office (HCO), Equity, Diversity, and Inclusion (EDI), and Facilities, Management, and Security Services (FMSS) will lead and support improvements to make the IRS a nimbler and more efficient organization that attracts, develops and supports an accessible, diverse and inclusive workforceEquity, Diversity, and Inclusion (EDI)Facilities, Management, and Security Services (FMSS)Office of ProcurementThe Office of Procurement and the Chief Financial Officer (CFO) will lead and support efforts to ensure the IRS appropriately plans and documents the allocation of resources to support the transformation.Chief Financial Officer (CFO)Privacy, Government Liaison, and Disclosure (PGLD)Privacy, Government Liaison, and Disclosure (PGLD), the Office of the Chief Risk Officer (OCRO), Communications and Liaison (C&L), Change Management practitioners and the Office of Chief Counsel will lead and support efforts to ensure that our transformation process engages and includes stakeholders in transformation efforts, follows laws and regulations meant to protect those stakeholders and thoughtfully incorporates risk analysis and risk mitigation.Office of the Chief Risk Officer (OCRO)Communications and Liaison (C&L)Change Management PractitionersOffice of Chief CounselGovernment LeadersGovernment leaders and other oversight bodies ~ This Plan describes what the IRS aims to accomplish for the American people with the additional funding provided. It can be used to hold the IRS accountable on delivering the progress we promise. Oversight BodiesOther OrganizationsNational, state, local, and other organizations ~ There is a wide variety of groups beyond the immediate tax community who have an interest in the IRS's transformation effort. These include charitable groups; small business organizations; community- and faith-based organizations; labor unions; climate, environmental, and other advocacy organizations; academic institutions and researchers; tribal organizations; and many other key partners. This Plan can be used as a benchmark for success as well as a basis to provide ongoing feedback on areas for growth.Charitable GroupsSmall Business OrganizationsCommunity-Based OrganizationsFaith-Based OrganizationsLabor UnionsClimate Advocacy OrganizationsEnvironmental Advocacy OrganizationsAcademic InstitutionsResearchersTribal OrganizationsThe modernized tax administration system that the American people deserve_9eb6df0c-5cea-11ee-8ed6-d5871283ea00Provide America's taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all._09d5343c-54c6-11e4-bac9-04e166263f6eFairness[Submitter's note: These values were parsed out of the document by Google Bard: https://g.co/bard/share/4330ea37935c]IntegrityServiceExcellenceServicesDramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible_9eb6e006-5cea-11ee-8ed6-d5871283ea001Filing 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. Availability & AccessibilityImprove the availability and accessibility of customer service:_9eb6e0c4-5cea-11ee-8ed6-d5871283ea001.1Taxpayers will be able to receive on-demand customer service or schedule service ahead of timeDigital Services & DigitalizationExpand digital services and digitalization_9eb6e1b4-5cea-11ee-8ed6-d5871283ea001.2Taxpayers will be able to file all documents securely and exchange correspondence electronicallyToolsEnsure employees have the right tools_9eb6e25e-5cea-11ee-8ed6-d5871283ea001.3IRS EmployeesEmployees will have the right tools and information to quickly and effectively meet the needs of taxpayersSelf-ServiceImprove self-service options_9eb6e308-5cea-11ee-8ed6-d5871283ea001.4Taxpayers 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 Direct FilingExplore direct file_9eb6e3b2-5cea-11ee-8ed6-d5871283ea001.5The IRS will explore providing taxpayers the option to file certain tax returns directly with the IRS onlineData AccessEnable taxpayers to access their data_9eb6e506-5cea-11ee-8ed6-d5871283ea001.6TaxpayersTaxpayers will be able to access, download, and seamlessly share their tax data and IRS historyLegal CertaintyProvide earlier legal certainty_9eb6e5c4-5cea-11ee-8ed6-d5871283ea001.7Taxpayers will have greater upfront clarity and certainty additional guidance on tax issuesAlertsDeliver proactive alerts_9eb6e678-5cea-11ee-8ed6-d5871283ea001.8TaxpayersTaxpayers will be able to receive alerts to help them meet filing and payment obligations, understand opportunities to claim certain incentives and learn about life changes that could impact their taxesCredits & DeductionsHelp taxpayers understand and claim appropriate credits and deductions_9eb6e72c-5cea-11ee-8ed6-d5871283ea001.9TaxpayersIndividualsSmall BusinessesTaxpayers, including individuals and small businesses, will receive education and assistance in claiming available incentivesPaymentsMake payments easy_9eb6e7e0-5cea-11ee-8ed6-d5871283ea001.10Taxpayers will be able to make payments more easily and seamlessly through all service channelsStatus TrackingBuild status-tracking tools for taxpayers_9eb6e89e-5cea-11ee-8ed6-d5871283ea001.11TaxpayersTaxpayers 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 issuesMultichannel AssistanceStreamline multichannel customer assistance_9eb6e952-5cea-11ee-8ed6-d5871283ea001.12Taxpayers 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 Issue ResolutionQuickly resolve taxpayer issues when they arise_9eb6ea10-5cea-11ee-8ed6-d5871283ea002TaxpayersMillions 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. FilingIdentify issues during filing_9eb6eace-5cea-11ee-8ed6-d5871283ea002.1The IRS will send taxpayers notifications about potential issues as they file returns to help them correct errors and claim credits and deductionsTreatmentsDeliver early and appropriate treatments for issues_9eb6eb8c-5cea-11ee-8ed6-d5871283ea002.2The IRS will provide taxpayers with timely and tailored post-filing treatments to resolve issues and omissions on their tax returnsNoticesDevelop taxpayer-centric notices_9eb6ec54-5cea-11ee-8ed6-d5871283ea002.3The IRS will send taxpayers notices they can understand, delivered in ways they prefer, with clear explanations of issues and steps to resolution Issues & CertaintyExpand tax certainty and issue resolution programs_9eb6ed26-5cea-11ee-8ed6-d5871283ea002.4Taxpayers will be able to resolve potential compliance issues up front through expanded pre-filing and tax certainty programsDebtOffer proactive debt resolution_9eb6edee-5cea-11ee-8ed6-d5871283ea002.5The IRS will proactively offer taxpayers appropriate options for past-due payment resolutionEngagementExpand engagement with non-filers_9eb6eeb6-5cea-11ee-8ed6-d5871283ea002.6Non-FilersThe IRS will provide early, tailored outreach to taxpayers who do not file on timeCollectionsUse improved data and analytics to tailor timely collections contacts_9eb6ef88-5cea-11ee-8ed6-d5871283ea002.7The IRS will provide early, tailored contacts to all taxpayers with past-due balances, and will only escalate to more intensive treatments when appropriate EnforcementFocus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap_9eb6f050-5cea-11ee-8ed6-d5871283ea003Even 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. SelectionEmploy centralized, analytics-driven, risk-based methods to aid in the selection of compliance cases_9eb6f122-5cea-11ee-8ed6-d5871283ea003.1The 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 selectionCorporationsExpand enforcement for large corporations_9eb6f1fe-5cea-11ee-8ed6-d5871283ea003.2Large CorporationsThe IRS will increase enforcement activities to help ensure tax compliance of large corporate taxpayers PartnershipsExpand enforcement for large partnerships_9eb6f2d0-5cea-11ee-8ed6-d5871283ea003.3Large PartnershipsThe IRS will increase enforcement activities to help ensure tax compliance of large partnershipsIndividualsExpand enforcement for high-income and high-wealth individuals_9eb6f3ac-5cea-11ee-8ed6-d5871283ea003.4High-Income IndividualsHigh-Wealth IndividualsThe IRS will increase enforcement activities to help ensure tax compliance of highincome and high-wealth individualsCoverageExpand enforcement in areas where audit coverage has declined to levels that erode voluntary compliance_9eb6f4d8-5cea-11ee-8ed6-d5871283ea003.5The 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 lessComplexity & NoncompliancePursue appropriate enforcement for complex, high-risk and emerging issues_9eb6f5be-5cea-11ee-8ed6-d5871283ea003.6The 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 issuesFairnessPromote fairness in enforcement activities_9eb6f69a-5cea-11ee-8ed6-d5871283ea003.7The IRS will help promote fairness for all taxpayers by addressing noncompliance appropriately in a balanced manner Technology, Data & AnalyticsDeliver cutting-edge technology, data, and analytics to operate more effectively_9eb6f78a-5cea-11ee-8ed6-d5871283ea004Technology 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. Data & ProcessingTransform core account data and processing_9eb6f87a-5cea-11ee-8ed6-d5871283ea004.1The IRS will modernize the systems used to access and process taxpayer dataTechnology DeliveryAccelerate technology delivery_9eb6f960-5cea-11ee-8ed6-d5871283ea004.2The IRS will deliver faster and better results by accelerating design, development and delivery of user-centered technology by shifting to a "product and platform" operating model that incorporates business and technology perspectivesTechnology OperationsImprove technology operations_9eb6fa5a-5cea-11ee-8ed6-d5871283ea004.3The IRS will enhance core technology processes and platforms to support the delivery of expanded capabilities for taxpayers and employeesData SecurityContinue to ensure data security_9eb6fb4a-5cea-11ee-8ed6-d5871283ea004.4The IRS will continue to protect taxpayer data and IRS systems from cyber threats as we transform Data UtilityMaximize data utility_9eb6fc44-5cea-11ee-8ed6-d5871283ea004.5The IRS will improve the storage and management of data to support improved taxpayer services and enforcementAnalyticsApply enhanced analytics capabilities to improve tax administration_9eb6fd3e-5cea-11ee-8ed6-d5871283ea004.6IRS employees will use data and insights to enhance delivery of tax administration and improve the taxpayer experienceTax AdministrationStrategically use data to improve tax administration_9eb6ff46-5cea-11ee-8ed6-d5871283ea004.7The IRS will use enhanced data and explore additional innovative analytic techniques to improve strategic planning, decisionmaking and compliance measurementInsightsPartner to expand insights_9eb7004a-5cea-11ee-8ed6-d5871283ea004.8IRS PartnersTaxpayersPolicymakersThe IRS will engage with external partners to develop new insights to generate value for taxpayers and policymakers Culture & WorkforceAttract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers_9eb70158-5cea-11ee-8ed6-d5871283ea005To 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.Hiring & OnboardingRedesign hiring and onboarding_9eb7025c-5cea-11ee-8ed6-d5871283ea005.1The 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 programsTalent & DiversityAttract a talented and diverse workforce_9eb70360-5cea-11ee-8ed6-d5871283ea005.2The IRS will build new talent pipelines and attract a workforce that reflects the diversity of the people we serveEmployee ExperienceImprove the employee experience_9eb70482-5cea-11ee-8ed6-d5871283ea005.3IRS EmployeesThe IRS will improve the employee experience by offering more flexibility, building a more collaborative team culture, and better equipping personnel Professional DevelopmentHelp employees grow and develop_9eb70590-5cea-11ee-8ed6-d5871283ea005.4IRS EmployeesThe 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 teamsData CompetencyDevelop a data-savvy workforce_9eb7069e-5cea-11ee-8ed6-d5871283ea005.5IRS WorkforceThe 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 effectivelyWorkforce PlanningElevate workforce planning strategy_9eb707ca-5cea-11ee-8ed6-d5871283ea005.6The IRS will leverage workforce planning best practices to forecast and meet hiring demand more effectively to avoid disruption and satisfy business needsOrganization & GovernanceImprove organizational structures and governance_9eb708e2-5cea-11ee-8ed6-d5871283ea005.7The IRS will implement new organizational structures and distributed and transparent decision processes to support more collaborative, effective and efficient tax administrationService & ImprovementBuild a culture of service and continuous improvement_9eb709fa-5cea-11ee-8ed6-d5871283ea005.8The IRS will build a customer-centric culture by empowering employees and leaders to put the customer first and rewarding outstanding service 2022-10-012031-09-302023-09-27https://www.irs.gov/pub/irs-pdf/p3744.pdfOwenAmburOwen.Ambur@verizon.net