IRS Announces Major Milestones in Tax Enforcement, Digital Innovation, and Technology Modernization
Today in Austin, Texas, U.S. Secretary of the Treasury Janet L. Yellen and IRS Commissioner Danny Werfel highlighted significant achievements under the Inflation Reduction Act (IRA) aimed at improving tax enforcement, enhancing taxpayer service, and modernizing outdated technology.
The announcements mark a new era in the IRS's efforts to ensure high-income individuals pay their taxes, deliver better service to taxpayers, and update critical technology systems.
Ensuring High-Income Taxpayers Pay Their Fair Share
Since February 2024, the IRS has been pursuing 125,000 high-income, high-wealth taxpayers who have failed to file returns since 2017. Leveraging third-party income information, the IRS has successfully collected $172 million from nearly 21,000 individuals in the first six months of this initiative. Additionally, the IRS has focused on collecting from individuals with over $1 million in income and significant unpaid tax debt. After recovering $38 million from 175 individuals last year, the program expanded to 1,600 more high-wealth taxpayers, recovering over $1.1 billion to date.
Enhancing Taxpayer Service Through Digital Innovations
The IRA has enabled the IRS to significantly enhance taxpayer service through its Digital First Initiative. This initiative aims to provide a modern, user-friendly online experience comparable to banking services. In the past two years, the IRS has introduced more digital tools than in the previous two decades, including updated features for individual and business tax accounts, mobile-adaptive forms, and new tools like Direct File for free filing directly with the IRS. The IRS has also improved its “Where’s My Refund?” tool and redesigned over 100 taxpayer notices to be clearer and more concise.
Modernizing 65-Year-Old Technology
The IRS is making strides in modernizing its core technology systems, which have been in use for 65 years. The transition from outdated Assembly-based code to the modern Java language for the Individual Master File (IMF) represents a crucial step in this effort. The new Integrated Tax Processing Engine (ITPE) will operate alongside the IMF to ensure data accuracy and support real-time data processing. This modernization is expected to enhance service delivery, facilitate faster implementation of tax code changes, and reduce system maintenance costs.
These milestones reflect the Biden-Harris Administration's commitment to transforming the IRS into a more effective and taxpayer-friendly agency, ensuring that it can meet contemporary challenges and support a more equitable tax system.
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