On April 5, the Internal Revenue Service (IRS) detailed its plans for using the $80 billion Congress provided the agency last year as part of the Inflation Reduction Act. The agency expects to add 30,000 new employees in the next two years and plans to spend the new resources on tax enforcement efforts, taxpayer services, technology improvements, energy security, and hiring and retention.

The strategic operating plan outlines five objectives, as follows:

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

In a memo accompanying the report, newly confirmed IRS Commissioner Danny Werfel also reflected on the need for sustained funding for the IRS. He wrote: “I can’t overstate the importance of sustained annual resources for IRS operating costs. To help put this issue in perspective, IRS funding has steadily declined over the last decade causing suboptimal staffing and investment. In 2010, for example, we operated with 95,370 FTE to meet the demands of the U.S. population (310 million). Today, the IRS is almost 20 percent smaller (80,006 FTE as of the end of FY 2022), whereas the U.S. population has increased by over 7 percent (334 million) and the tax law has grown more complex. To cover steady state operations, annual discretionary appropriations must be fully maintained at the FY 2022 level, including growth for inflation and pay raises.”

To read the full strategic operating plan, click here.