The new Internal Revenue Service five-year strategic plan outlines goals to improve taxpayer service and tax administration even as the term of the agency’s commissioner ends this year after recent turmoil.
“The IRS has undergone tremendous change over the last five years, and we continue to evolve to better serve the nation’s taxpayers,” said IRS Commissioner Chuck Rettig, whose term is set to end in November.
Rettig faces scrutiny following
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- Providing quality and accessible services to enhance the taxpayer experience.
- Enforcing the tax law fairly and efficiently to increase voluntary compliance and narrow the tax gap.
- Fostering an inclusive, diverse and well-equipped workforce.
- Transforming IRS operations to become more resilient, agile and responsive.
Among the agency’s latest trends and challenges cited, “Historically underserved community populations are growing, yet still do not receive the same resources and opportunities as other communities. Minority and immigrant communities, taxpayers with disabilities, Native American communities, the elderly, the unhoused and veterans are some of those in need of additional equitable support,” the report reads. “The IRS needs to engage with more segments of the population, like those with limited English proficiency, that face unique challenges in accessing the information, forms or services they need. Furthermore, the COVID-19 pandemic reduced availability of face-to-face opportunities to engage with these communities.”
Data management and analytics, cybersecurity and digital services will be priorities as “taxpayers and practitioners increasingly expect more online government services that incorporate new interactive features, like chatbots and personalized online applications, similar to those provided by banks and other private sector organizations.”
Enforcement
Double-hammered by an expanding workload and dwindling resources, the IRS plans to cut the time between filing and compliance resolution; to establish forecast methods that enhance future tax gap estimates and initiate research on additional factors contributing to the tax gap; and to use “advanced technologies” to analyze and identify patterns of noncompliance.
Citing its increasing focus on noncompliant, high-income and high-wealth taxpayers, business partnerships and large corporations, the agency plans to increase audit coverage and publicizing of criminal prosecutions and civil enforcement. Agents will also turn to blockchain tracing and virtual currency analytics for virtual currency investigations.
People
Almost nine out of 10 the agency’s employees said in a survey last year that diversity and inclusion “positively affect the IRS’s ability to serve taxpayers.” Aiming to increase both among its workforce, the agency looks to give staff better training and more flexible career paths, among other moves.
The IRS also must pay attention to its aging workforce: An estimated 52,000 of 83,000 (63%) are eligible to retire or resign within the next six years. The average attrition rate for federal agencies is 5.8%; the IRS’s is 7.3%
Operations
With an eye to streamlining and modernizing technology, the “IRS Modernization Portfolio” includes dozens of efforts, including technology to help reduce wait times on phone lines and updates to core case and account management systems. The agency will also address client concerns and ongoing cybercrime: The IRS observes and mitigates more than 1.4 billion cyberattacks annually.
No long-range IRS plan would be complete without a nod to the current turbulent political landscape — or money.
“The IRS must be quick to respond to a rapidly evolving environment where taxpayer and employee expectations and legislative and regulatory directions shift,” the report reads. “Consistent multiyear funding helps the IRS respond to continued and rapid change in expectations.”
