Page 135 - IRS Plan
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Estimated allocation of funds
The IRA provided the IRS with $79.4 billion in delivery schedule over time as efficiencies are
funding spread across four appropriations realized and new information becomes available,
accounts. The following table compares the including:
expected allocation of this funding
to the transformation objectives included in our • The scope, scale and pace of delivery of new
Plan. We expect that over time the mix of staffing capabilities across hundreds of projects
and our business processes will change as we associated with each transformation objective
reap the benefits of our transformative technology • Synergies across related transformation
investments. For this reason and several others, initiatives
we note that allocations of funding against
transformation objectives are preliminary; we will • Demands on steady-state operations
monitor and report specific IRA costs at the • Enacted discretionary budget allocations
appropriation and program-activity levels in
accordance with our current financial-reporting We may need to adjust timelines and/or
practices. As the transformation objectives are the breadth and depth of delivery for specific
accomplished and efficiencies are gained from transformational initiatives—most notably in the
existing operations, actual costs will be reported areas of taxpayer service and technology, which,
in our annual budget submission and in an annual as described below, will require additional
IRA update. See below for more detail. discretionary appropriations beyond what the IRA
provided—as we learn more, but we will remain
With the IRA vision, objectives, and initiatives committed to the vision and outcomes articulated
as context, we conducted cost analyses to in this plan. The following table displays funds
understand—based on today’s best estimates— that we plan to spend by transformation objective
whether the long-term funding provided under and by appropriation, limited to what we have been
the IRA would be sufficient to achieve the appropriated—not what we estimate could be
transformation required to deliver the drastically needed to fully transform the IRS as described
improved tax administration described in this plan. in this plan based on today’s estimates.
We expect that these estimates will need to be
adjusted significantly over the next decade. The strategic operating plan for the IRA was built
In conducting the financial analysis to support this under the assumption that IRA funds will support
plan, we recognized that planning over a ten-year transformation efforts but would not have to be
horizon involves considerable uncertainty used to support current “steady-state” IRS
stemming from a rapidly changing labor market, operations. To cover our steady state, annual
impact of productivity gains from overdue discretionary appropriations must be fully
technological investments, and business process maintained at the FY 2022 level and include
improvements. The ultimate cost of the initiatives growth for inflation. Any reduction in annual
outlined in this plan will be refined, and the specific discretionary funds—including not providing
estimates of the funding required to achieve our for inflationary increases to maintain current
vision may change over time. levels—will require the use of IRA funding to cover
steady-state operations, jeopardizing the service,
Despite this uncertainty over the exact impact of technological and compliance initiatives in this
future productivity enhancements on the workforce plan. Diverting IRA funding to cover base
or modernized operations, we have included our discretionary enforcement needs would reduce
full aspirations in this plan. To the extent possible, revenue collection and significantly decrease the
we will work over the coming months and years to net deficit impact of the IRA.
prioritize the funding available to achieve the
objectives articulated in this plan. We will refine
assumptions to update cost and the associated
128 IRS IRA Strategic Operating Plan
Part III: Managing the Transformation
