The IRS’s new fiscal year guidance plan lays out strategic goals that aim to improve efficiency, communication, and customer experience.
By Han Group
The IRS’s new fiscal year guidance plan is focused on improving the taxpayer experience and interaction with the agency, said Deep Master, a Tax Manager at Han Group who helps nonprofit clients with IRS compliance requirements. He’s referring to the five “transformation objectives” in the IRS’s Strategic Operating Plan for fiscal years 2023 – 2031.
“With the pandemic, the IRS couldn’t really work remotely. And they were at low capacity. They couldn’t address anybody’s notices or inquiries,” he said, referring to the lengthy periods it took the IRS to address correspondence or make corrections. The pandemic and remote work revolution put into sharp relief the IRS’s need to evolve.
The five areas of transformation are focus points that will support the IRS in making compliance “more holistic, smarter, broader and stronger” and in providing better service to the public.
The Tax Exempt and Government Entity division (TE/GE) of the IRS issued a 2024 letter from its commissioners outlining five areas of improvements and how they might impact your interactions with the service. Here is a breakdown of those five areas:
1. Better taxpayer experience
TE/GE pledges to improve services to help taxpayers manage the process and receive the tax incentives for which they are eligible. Specifically they will:
- Focus on proactively connecting with internal and external stakeholders to identify and better serve small and underserved taxpayers such as small entities and limited English proficiency communities.
- Continue to promote the use of digital communication vehicles like Taxpayer Digital Communications and Data Upload Tool for secure, electronic communication with taxpayers and representatives.
- Provide education and outreach to help TE/GE stakeholders make accurate elective payment elections for clean energy credits under the Inflation Reduction Act.
- Continue to support its Native American initiative that focuses on increasing access to tax services throughout Indian Country.
2. Faster issue resolution
TE/GE says it will quickly resolve taxpayer issues when they arise. Specifically they will:
- Support effective processing and compliance at pre-filing and filing for elective payment elections of clean energy credits.
- Support IRS efforts to proactively review and address Employee Retention Credit claims, during the filing process or immediately after return processing.
- Collaborate across the IRS to streamline notices and improve how notices are updated and issued to taxpayers. Encourage two-way electronic communication between IRS and taxpayers regarding notices.
3. Smarter enforcement
TE/GE says it will address the tax gap by focusing expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance. Specifically they will:
- Collaborate with Research, Applied Analytics, and Statistics to continue building and refining Exempt Organizations exam case selection using advanced modeling techniques.
- Continue to incorporate new network analysis tools that allow graphical exploration of the connections between entities and help to identify potentially problematic relationships.
- Collaborate across IRS on highly complex and or emerging issues including, but not limited to, examinations of ESOPs, tax-exempt hospitals, and high-income/high-wealth individuals.
4. Modernization: Advanced technology analytics
TE/GE promises to deliver cutting-edge technology, data, and analytics to operate more effectively. Specifically they will:
- Complete and launch Form 13909, Tax-Exempt Organization Complaint (Referral) in the Digital and Mobile Adaptive Forms framework to allow the public to submit a referral using the electronic form accessible from any device. This will expand paperless submission options for taxpayers and provide for more accurate electronic data.
- Continue to work with Research, Applied Analytics and Statistics to develop an Artificial Intelligence capability to review and prioritize referrals received on Exempt Organizations.
- Continue to support Enterprise Case Management efforts to standardize Service-wide examination processes.
5. Empowered employees
TE/GE aims to attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers. Specifically they will:
- Create detailed/extensive career training paths for employees to use as a tool for them to reference as career milestones occur.
- Commit resources to develop and deliver quality, cost-effective mission-critical core training that is focused on both individual and organizational productivity and advancement.
- Create training workshops and mentoring seminars that will focus on developing the skills that TE/GE Frontline managers need to make independent data-driven decisions.
- Continue to build a collaborative team culture by hiring and retaining a diverse, talented, data-savvy, and technology-driven workforce.
- Build community relationships by expanding outreach efforts and engaging with external stakeholders to market TE/GE and IRS careers and increase our visibility.
“There was a lot of panic from compliance a couple of years ago when the news broke that the IRS planned to hire more employees, more revenue agents, because they were thinking ‘we’re going to get audited,’” said Master. “But what they have to keep in mind is that they’re not going to hire everybody on the same day—they’re going to hire people over a few months or a year. … And, even after being hired, some revenue agents have to go through months of training.”
As organizations collect their records and prepare tax documents across 2024, it will be helpful to keep in mind the evolution the IRS is embarking on and how it might alter the way correspondence and record-sharing occurs.
Nonprofits need a systematic and specialized understanding of their finances. This is where Han Group’s tailored accounting services become essential—we are dedicated to working exclusively with nonprofit clients. Our purpose is to use our expertise in nonprofit-specific accounting to be a reliable partner to organizations as they navigate a changing landscape.
