IRS Strategic Operating Plan identifies priorities for improved services, compliance

In brief

The IRS on April 6 released its FY 2023 to 2031 Strategic Operating Plan (Plan), setting forth a framework for how the IRS plans to use the $79.4 billion in additional funding provided by the Inflation Reduction Act (Act) to transform tax administration and services provided to taxpayers and tax professionals. The Act provides the IRS with these additional resources over the next 10 years to improve service to taxpayers; update technology capabilities; invest in its employees with new tools, skills, and capabilities; and increase tax compliance among high-income individuals, complex partnerships, and large corporations. 

The Plan identifies the IRS’s highest-priority opportunities to deliver transformational change for taxpayers. It leverages prior IRS planning efforts, including the Taxpayer First Act Report to Congress, new thinking around best practices and available technology, and current and past input from a wide range of stakeholders in tax administration. 

The Plan provides a high-level roadmap to how the IRS plans to deploy the investments under the Act to better serve taxpayers, tax professionals, and the broader tax ecosystem. It sets milestones and will serve as a guide for decision-making by IRS leadership and initiative and project managers. 

Observation: Although the Plan sets forth the five transformation objectives it plans to accomplish through the 42 initiatives listed below, the Plan does not include details around its hiring goals, target audit rates, and the allocation of funds beyond the next two years. The IRS has stated that it plans to be transparent with Congress and other stakeholders and provide additional details of its Plan as it moves forward with implementation. These statements have been met with skepticism from some Members of Congress and likely will play a role in the ongoing debate over continued IRS funding.   

Action item: While the IRS plan is a high-level aspirational roadmap with more details likely to emerge in the months ahead, the agency has indicated that it is already increasing audits — especially in the large partnership area — and now is the time to prepare for such inquiries.