IRS Releases Inflation Reduction Act Strategic Operating Plan
The Internal Revenue Service (IRS) released its Inflation Reduction Act Strategic Operating Plan that focuses spending on enforcement and operations. The Plan further outlined how the IRS will use USD 80 billion in funding it received from the Inflation Reduction Act through fiscal year 2031.
The 150-page plan specifically highlighted the following as priority spending items:
- improvement to taxpayer services;
- efficient resolution of taxpayer issues;
- expanding enforcement on taxpayers with complex filings and high-dollar noncompliance;
- delivery of more effective technology and analytics; and
- attraction and retention of the agency's workforce.
The Plan's spending was segmented into:
- USD 45.6 billion for enforcement;
- USD 25.3 billion for operations support;
- USD 4.8 billion for the business system modernization; and
- USD 3.2 billion for taxpayer services.
The operating plan has 42 initiatives designed to achieve agency goals and outlines 190 key projects and more than 200 specific milestones. The IRS stated that it will identify additional projects and milestones as its work continues.
The plan emphasizes that IRS will be working to ensure fair enforcement of the nation's tax laws and compliance with existing laws while respecting taxpayer rights. The IRS will focus on identifying compliance issues involving large corporations, larger partnerships and high-wealth individuals. The plan additionally states that, in accordance with Treasury Secretary Janet Yellen's directive, its audit rates will not increase on small businesses and households earning USD 400,000 or less per year.