The Internal Revenue Service is spending $80 billion of Americans' tax money to overhaul its process for collecting more taxes.
The plan, which will be rolled out over the next 10 years, will involve hiring tens of thousands of new employees, purchasing new equipment and expanding its analytics capabilities, according to the U.S. Treasury Department.
IRS Commissioner Danny Werfel said the plan has already been put into motion as the agency recently hired 5,000 service reps to answer calls. Another 7,000 service reps and 1,500 auditors are expected to be hired this year.
"Now that we have long-term funding, the IRS has an opportunity to transform its operations and provide the service people deserve," Werfel said in a statement. "Through both service and technology enhancements, the experience of the future will look and feel much different from the IRS of today."
The overhaul will also provide Americans with online resources that will help them check their taxes before filing them.
"For the first time, the IRS will also help taxpayers identify potential mistakes before filing, quickly fix errors that delay their refunds, and more easily claim the credits and deductions they are eligible for," the Treasury Department said in a statement. "The IRS will help taxpayers get it right, and taxpayers will be able to seamlessly interact with the IRS in the ways that work best for them on the phone, in-person, and online."
The 150-page Strategic Operating Plan details five objectives to achieve the goal of providing world-class service and reducing the deficit by hundreds of billions:
1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible
2. Quickly resolve taxpayer issues when they arise
3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap
4. Deliver cutting-edge technology, data, and analytics to operate more effectively
5. Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers
The plan contains 42 initiatives designed to achieve IRS goals, each of which includes multiple key projects and milestones to measure progress. The plan covers more than 190 key projects and more than 200 specific milestones. For each milestone, the plan includes specific timeframes based on year.
"For years, the agency has not had the resources to provide the service people deserve. Across all of our operations we've seen the impact. We've lost employees and seen our resources stretched thin with new mandates and an increasingly complex economy," Werfel said. "The IRS looks forward to demonstrating how the actions under this plan will translate into real improvements for taxpayers. Technology as well as in-person assistance will be cornerstones of this effort."
The plan also highlights how the 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 said it will be solely focused on pursuing high-income and high-wealth individuals, complex partnerships and large corporations that are not paying the taxes they owe. As a result, the IRS has no plans to increase the audit rate for households making less than $400,000.
"Effective enforcement is an important component of this plan," Werfel said. "Revenue collected by the IRS supports everything from the nation's defense to education and roads."
Modernizing decades-old technology is also part of the plan. In the first five years of the 10-year plan, the IRS will eliminate paper backlogs that have delayed taxpayer refunds by digitizing forms and returns when they are received and transitioning to fully digital correspondence processes. The IRS will also retire outdated components of its core tax processing systems, replacing them with modern platforms that will enable transactions to be processed more quickly.
"The plan is a bold look at what the future can look like for taxpayers and the IRS," Werfel said. "This investment in the IRS is already helping taxpayers this tax season, and this plan shows that historic changes are coming."
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