The IRS is currently in the middle of a long-term plan to improve their technology, data, analytics, and more so they can be more effective and customer-focused. To which we say: it’s about time!
Phases 1, 2, and 3 addressed the tax gap by expanding enforcement. Here’s what you need to know about Phase 4, which is spread over five consecutive years (2023-2028).
2023 to 2024
For 2023 and 2024, the IRS is focusing on four main initiatives.
- Modernize the platform that processes information returns
This involves:
- Rolling out a new platform to intake information returns
- Offering a free online portal through which businesses can file Form 1099-series information returns
- Simplifying the tax filing processes
- Improving data accuracy
- Make individual taxpayer data more accessible
This involves:
- Improving IRS systems so individual taxpayer data is more easily accessible for service and compliance purposes
- Deploying secure, standardized APIs (application programming interfaces)
- Make it easier and more efficient to collaborate and share data within the IRS
- Integrate business and IT operating models
This involves:
- Accelerating technology delivery
- Implementing an integrated operating model for both business and IT product-and-platform
- Better aligning business needs and IT solutions
- Making IRS resources more effective
- Create new methods for estimating tax gaps
This involves:
- Enhancing and expanding ways to estimate tax gaps
- Better understanding and addressing tax compliance issues
2025 to 2028
After 2024, the IRS will continue its work to improve its efficiency and accessibility, through these three main initiatives.
- Retire master files for businesses and individuals
This involves:
- Retiring outdated master files
- Migrating systems and information onto more modern, accessible platforms
- Improving data management
- Making information easier to find and share
- Give taxpayer service data in near-real-time
This involves:
- Providing IRS data analysts with near-real-time taxpayer service information using modernized analytical technology
- Enabling more accurate and timely tax data analysis
- Facilitating better services and decision-making
- Create a “Taxpayer 360 degree” holistic view
This involves:
- Delivering data that supports a comprehensive, 360 degree view of taxpayers
- Gaining a better understanding of taxpayer behavior
- Tailoring services to taxpayers’ needs
Moving forward
In short, the IRS is on a path to incorporate new tech, data, and analytics for a more modern, streamlined tax payment and information system. That’s good news for taxpayers and CPAs everywhere!