IRS Plans

Over the past few years, it has become ever clearer how much the IRS needed to work toward modernizing as it seemed to be falling behind and ever more outpaced by technology, making its service feel worse and worse. Thankfully, it does seem to now be making some forward steps. This doesn’t mean that things are perfect, but it does mean that things are at least being addressed.

As part of its plans to move forward, the IRS has released its latest Strategic Operating Plan that includes the following five key objectives:

• Objective 1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible.
• Objective 2. Quickly resolve taxpayer issues when they arise.
• Objective 3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap.
• Objective 4. Deliver cutting-edge technology, data and analytics to operate more effectively.
• Objective 5. Attract, retain and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers.

Granted, none of these comes across as anything earth-shattering and instead are things most probably assume it is just doing all the time. I do want to spend some time on Objective 3, however, since the agency has indicated further commitment to addressing that issue.

Looking toward tax year 2026, the IRS is planning on getting audit rates on large corporations with assets over $250 million to 22.6%, up from 8.8% in 2019. In addition, audit rates on large, complex partnerships are looking to get to 1% from .1% in 2019. And finally, audit rates on wealthy individuals with income of over $10 million has a target audit rate of 16.5% from 11% in 2019.

Of course, those that fit into these categories are a minority of all taxpayers. They are significant jumps, though, so those who do fall into those groups may want to give a little extra attention to making sure everything is in order when it comes to tax filing in the coming years.

Also worth noting, though, is the fact that the IRS has also emphasized that audit rates will not increase for small businesses and individuals earning under $400,000. So almost everyone is safe from any increased scrutiny … and we can get better service … and those who do owe more money are going to be tracked down more to pay it …

Boy, if all this actually happens, maybe it won’t be so bad.

Warmly,

Josh Bousquet
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