The U.S. Department of the Treasury has released a six-year plan to modernize IRS business operations, focusing on providing American taxpayers with better service, helping them meet their tax obligations and enforcing the law with greater integrity.
“The IRS supports one of the largest and most complex business operations in the world, proudly serving millions of individual filers, small businesses, tax exempt organizations and large corporations,” said Treasury Secretary Steven Mnuchin. “Technological innovation is vital to the IRS successfully executing its mission, including protecting taxpayer data, enhancing services to taxpayers, and ensuring the health of the nation’s tax system.”
Treasury officials said the IRS reorganization plan is built around four “modernization pillars” critical to the IRS’s mission and future development. They include the taxpayer experience, core services and enforcement, modernizing IRS operations and cybersecurity and data protection.
To improve taxpayer experience, the IRS will deploy a range of new and enhanced technology solutions to help taxpayers understand the law and resolve issues quickly and efficiently, officials said. Advanced programming will empower taxpayers with information about their account, tax obligations and payment options while protecting taxpayer information and data.
Known in the past largely for its aggressive enforcement and auditing practices, Treasury officials said the agency will continue to provide quicker and easier tax filing services by integrating tax processing systems that increase cost effectiveness, enable real-time processing of returns and deploy data analytics to combat fraud.
The IRS also plans to improve operational efficiencies by reducing system complexities, which will accelerate the pace of change and the adoption of emerging technologies to reduce costs and manual effort. This approach includes procuring software that completes laborious tasks in seconds through automation and artificial intelligence, eliminating error-prone manual work and increasing speed and accuracy, officials said.
Lastly, because the IRS’s systems contain a high volume of sensitive taxpayer data representing a unique target for cyberattacks, the agency plan introduces new data and refund fraud protections, shielding taxpayers from nearly 1.4 billion cyberattacks annually and proactively responding and anticipating the changing threat environment, officials said.
The IRS overhaul is anticipated to cost between $2.3 billion to $2.7 billion over six years through fiscal year 2024, officials said, adding that some components of the plan are already in place for the current fiscal year. The Trump administration’s budget proposal for fiscal year 2020 includes $290 million in funding for the plan.
Overall, the Trump administration had requested $12.7 billion for the Treasury Department in 2020, down from $12.9 billion in fiscal 2019. The budget calls for $15 billion in new IRS funding to beef up tax enforcement that will generate another $47 billion in new revenue over the next 10 years and cut the nation’s deficit, which approached $700 billion at the end of March.
The Congressional Budget Office is estimating a budget shortfall of $897 billion for fiscal 2019, up from $779 billion the previous year when the Trump administration implemented its $1.8 trillion corporate tax cut plan. At the end of the U.S. government’s fiscal year in 2018, which ended on Sept. 30, the U.S. national debt exceeded $21.5 trillion.