The IRS received $80 billion in funding from the Inflation Reduction Act to improve taxpayer services over the course of 10 years. While ambitious, the IRS is already beginning work on initiatives in Phase 1, which will be implemented this year and next. There are five phases total.

Phase 1: dramatically improve services to taxpayers

The primary goal of Phase 1 is to significantly enhance taxpayer services, making it easier for individuals and businesses to meet their tax obligations and access the tax incentives they’re eligible for. Here’s a breakdown of the tasks set to be accomplished during this phase:

2023-2024 initiatives

• Expanded hours will be available at Taxpayer Assistance Centers (TACs) for appointments and on-demand service, with staffing levels adjusted to meet expected demand.
• Certain documents, paper correspondence and non-tax forms will be digitalized, along with enhanced scanning of key tax forms.
• Enhancements to individual and online Tax Pro Accounts will be implemented, and Business Online Accounts will be launched.
• Business transcripts will be made available online in an easy-to-read format through Business Online Accounts. Current transcripts will be updated to be more user-friendly and available in Spanish and other languages.
• Improved taxpayer tracking tools will be introduced in online accounts for the 2024 filing season.
• An information page about clean vehicle credits will be launched, along with detailed FAQs about tax credits related to residential clean energy and energy efficiency improvements. The tax credit transfer process will be established to reduce the price of clean vehicles at dealerships. Digital intake processes will be developed to facilitate claiming tax credits by state and local governments, tribal governments and nonprofit organizations.

2025-2028 initiatives

• High-priority forms, returns and certifications will be made available for electronic filing and digitalization. High-priority end-to-end digital processes will be implemented. Additional forms, returns and certifications will be digitalized based on a prioritization plan.
• Online accounts will be upgraded to incorporate user-friendly views of account and return information (e.g., notices, letters, account history, payment history, balances due, etc.).
• New contacts will be launched for lawful non-filers who may be eligible for a credit or deduction, ensuring they are aware of their eligibility and have the tools and assistance necessary to claim appropriate credits or deductions.
• Integrated payment capability by card and digital wallet will be made available.
• Real-time processing estimates will be launched with data analytics to provide more accurate status messaging. Audit status and other process-tracking features will be launched and enhanced based on the prioritization plan.

The first phase of the IRS’s Strategic Operating Plan is all about improving taxpayer services and making it easier for individuals and businesses to navigate the tax system. With expanded hours at TACs, enhanced digitalization of forms and processes, and a focus on clean energy tax credits, the IRS is taking significant steps towards a more accessible and user-friendly tax environment.

It should be noted that, although there is an agreement in place for future cuts based on a tentative deal reached in June 2023 to raise the debt ceiling limit, specific plans to cut the $80 billion in funding have not been announced as of the writing of this article.

We’ll be covering the second phase of the IRS’s strategic plan in another upcoming blog post.