Next year’s filing season may differ substantially. The IRS announced its Strategic Operating Plan in late March.
Changes are envisioned to increase revenue from corporations, partnerships, and wealthy individuals, as well as to better serve taxpayers, solve problems more rapidly, use technology to streamline operations, grow the workforce, and foster a more positive company culture.
Increase Taxes
The Strategic Operating Plan aims to reduce the “tax gap,” or the difference between what taxpayers owe and what the government collects.
Recent IRS enforcement has been slack. According to the Strategic Operating Plan, significant enterprises with complex issues including cross-border activities had an audit rate of 10.5% in 2011 and 1.7% in 2019. Wealthy individuals too. From 2011 to 2019, 7.2% of taxpayers who made $1 million or more fell to 0.7%.
Partnership complexity, many layers of ownership, and growing scale are also studied. The IRS believes that auditing them would need significant money and expertise. Partnership audits were 0.05% in 2019.
The IRS plan also emphasizes cryptocurrency-related issues with high rates of alleged noncompliance.
Read more: IRS gets it right: A smooth Tax filing season and on-time refunds
Funding Increases For Certain Projects
In a letter to Treasury Secretary Janet Yellen, new IRS Commissioner Daniel Werfel outlined his plans to establish world-class IRS customer service where taxpayers can interact digitally
Taxpayers will have an easier time navigating the tax system’s complexities and communicating with the customer care team, which will be kept at an appropriate size and equipped with sufficient resources.
But there can be no doubt that increased taxpayer supervision, including audits, will receive the lion’s share of the funding (about 60%). As Yellen described in an order last year, IRS officers have pledged to zero upon businesses and individuals with annual incomes of $400,000 or more.
Read more: How much Social Security income did Joe Biden receive in 2022?