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Initiative 4.7 Strategically use data to improve tax administration
The IRS will use enhanced data and explore additional innovative analytic techniques to improve
strategic planning, decision-making and compliance measurement
Where we are heading What success would look like
The IRS has a centralized research function Success for this initiative would include better
and pockets of data and analytics expertise informed, data-driven decision-making and
throughout the organization. We are conducting planning, which would allow the IRS to deploy staff
numerous experiments with advanced analytics more effectively where they are most needed.
techniques to improve decision-making and the Innovation in customer service would increase
measurement of voluntary compliance and the taxpayers’ responsiveness. Data-driven resource
taxpayer experience, to anticipate emerging allocation and strategic planning would enhance
issues, and to allocate resources. However, we organizational effectiveness and performance.
need to allocate additional resources to these
activities to ensure sufficient capacity, appropriate Key projects
staff expertise, and the ability to scale and
transition innovative solutions into operational 1. Better understand the tax gap. Use new
workflows—all while keeping up with the evolution data and enhanced analytics to improve our
of analytical methods and technologies. understanding of voluntary compliance by
enhancing the timeliness, granularity and
We must keep pace in an ever-evolving landscape comprehensiveness of tax-gap measurement.
that includes changes in tax policy and taxpayer
behavior, emerging tax compliance issues and 2. Expand data-driven resource allocation.
an increasingly global business and financial Expand our use of data and analytics to allocate
world. Innovative, responsible uses of data and resources effectively to meet the needs of
advanced analytics can help the IRS meet these enforcement and customer service activities
challenges by better understanding taxpayer throughout the organization.
behavior, including voluntary compliance and 3. Deliver data and analytics for decision-
uptake of credits and deductions, and by delivering making. Enhance senior-level decision-making
meaningful insights to decision-makers. with a suite of tools, dashboards and software
across a broad range of data analytics use
We will enhance our strategic planning, decision- cases.
making and compliance measurement using
innovative analytic approaches, assessing 4. Develop best-in-class advanced analytics.
new uses of data, and exploring emerging Continuously experiment with advanced
technologies. We will encourage research analytics techniques to identify and address
and explore emerging techniques, including complex and emerging tax administration
advanced analytics. We will maintain guardrails challenges. This effort may include exploring
so that data and analytics are used responsibly deep learning to address complex tax
and transparently, respecting and protecting structures; using natural language processing
taxpayer privacy and civil liberties, and develop (NLP) methods to extract, consolidate and
processes for operational innovation. categorize narrative text from tax forms,
external reporting, and taxpayer interactions;
and using techniques such as machine
translation to improve taxpayer interactions
in languages other than English.
98 IRS IRA Strategic Operating Plan
Part II: Objectives and Initiatives
