IRS Reorganization Plan 5-31-25

The IRS is undergoing a major transformation and modernization effort, guided by the Taxpayer First Act and the Strategic Operating Plan. 

Here's a breakdown of key aspects of the IRS reorganization and modernization: 

1. Goals & Objectives:

• Improve Taxpayer Service: The IRS aims to make it easier for taxpayers to understand and meet their tax obligations, receive eligible tax benefits, and resolve issues efficiently.
• Modernize Technology: A significant focus is on upgrading outdated IT systems and adopting new technologies to enhance efficiency and security.
• Enhance Enforcement: The IRS plans to use data and analytics to improve its ability to address noncompliance, particularly among high-income earners and complex partnerships.
• Improve Employee Experience: Attracting, retaining, and empowering a skilled workforce is a key objective, including providing employees with the necessary tools and training. 

2. Key Initiatives and Changes:

• New Leadership Structure: The IRS has implemented a new leadership structure to align with transformation goals, featuring a single Deputy Commissioner and four new Chief positions overseeing taxpayer service, tax compliance, information technology, and operations.
• Expanded Online Services: The IRS is expanding features available in online accounts, such as digital notices, status updates, secure messaging, and payment options.
• Digitalization Efforts: The IRS is working to digitize forms and notices, aiming to make up to 150 non-tax forms available in digital formats and scanning virtually all paper-filed returns.
• Simplified Notices: The IRS is redesigning tax notices to be clearer and easier to understand, reducing the burden on taxpayers.
• Modernizing Technology: This includes replacing outdated systems and adopting new technologies to improve efficiency and security. 

3. Impact of the Inflation Reduction Act (IRA):

• The IRA provided significant funding to the IRS, including $4.8 billion for Business Systems Modernization (BSM) projects.
• This funding is intended to support the IRS's technology modernization efforts and other initiatives outlined in the Strategic Operating Plan.
• However, some IRA funding has been rescinded, and there are concerns about whether the remaining funds will be sufficient to complete all planned projects. 

4. Challenges and Concerns:

• Budget Cuts: Proposed budget cuts could hinder the IRS's modernization efforts and impact its ability to provide adequate taxpayer service.
• Workforce Uncertainty: There's uncertainty and concern among IRS employees regarding potential workforce reductions and changes to the agency's structure.
• Technology Implementation: Successfully implementing large-scale IT modernization projects can be complex and challenging. 

In conclusion, the IRS is undergoing a significant transformation aimed at improving taxpayer service, modernizing technology, and enhancing enforcement. The success of these efforts will depend on factors such as continued funding, effective implementation of new technologies, and a positive employee experience. 

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Norb Leahy, Dunwoody GA Tea Party Leader