IRS To Make Special Announcement This Week

Treasury Secretary Janet Yellen said on Tuesday that the IRS will soon be unveiling its 10-year spending plan for the $80 billion in funding Congress appropriated last year, Reuters reported.

In her remarks at the swearing-in ceremony for Danny Werfel, the new Commissioner of the Internal Revenue Service, Yellen said the pending IRS Strategic Operating Plan will outline in greater detail the IRS’s plans to invest in new technology, including in data and analytics, to help in auditing high-earning taxpayers, large corporations, and complex partnerships.

She said in addition to the new technology, the IRS will also be hiring “more top talent,” including lawyers and accountants, to “peel back complex corporate structures and large taxpaying entities” to ensure they are paying the taxes they owe.

In last year’s so-called Inflation Reduction Act, Congress allocated an additional $80 billion in IRS funding over the next ten years to improve tax compliance and shrink the gap between taxes owed to the IRS and what has been paid. According to the Treasury Department, the annual tax gap is about $600 billion.

Secretary Yellen also repeated the administration’s vow that the increased funding to the IRS would not be used to boost the audit rates for any household or small business earning less than $400,000 a year.

The Treasury Department has used the initial spending to improve customer service at the IRS, including hiring an additional 5,000 people to staff taxpayer service centers and answer telephones.

Yellen added that the Strategic Operating Plan will also include investments in digitized and automated paper processing, as well as spotting errors in returns while avoiding unnecessary audits of “honest taxpayers.”

According to a Treasury Department official, taxpayers should be able to securely file all documents electronically and respond to all notices online within the first five years of the plan, Reuters reported.