Early March 2024, the IRS released their Strategic Operating Plan Update in their IR-2024-130 communication with the following updates:
a) Better services: Keep enhancing live assistance in call centers (hopefully lower wait times even in the tax priority line and more experienced IRS phone agents), simplifying up to 200 notices so it might be easier to understand by taxpayers (some of them are even difficult to understand to pros and require a follow up with a Power of Attorney PoA), expanding online services adding features for the online account (tax pros might be able to initiate PoA online, access balances for authorized clients, make payments on behalf of clients, use a centralized authorization file CAF, etc. ) and other measures to improve the quality of their service.
b) More audits: The IRS indicates that the audit will be for the wealthiest taxpayers, large corporations and large, and complex partnerships in some cases by up to 50%. In addition, it is mentioned that should not be increase of audit rates for those taxpayers making up to $400k, but we have seen an increase on notices to business owners and individuals (some of them were paused during the pandemic and post-pandemic).
c) Note that the Biden’s fiscal year 2025 budget proposal includes a $104 billion to the IRS over the 10-year budget. Note that the previous legislation was for $80 billion over 10 years, which $20 of those were removed under the Further Consolidation Appropriations Act 2024, so the budget was around $60 billion net. Now, this new budget shows an almost 60% increase on the previous IRS budget. The IRS Commissioner Mr. Werfel has said that should generate an additional $341 billion in tax revenue (over 300% return on investment).
