Goal 4 | Transformation

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Transform IRS operations to become more resilient, agile and responsive to improve the taxpayer experience and narrow the tax gap.

To continue delivering on our mission, we must transform as an organization to keep pace with a rapidly changing world. Our transformation journey includes organizational redesign, modernization efforts, technological innovation and integrated data management capabilities. Implementation of recommendations from the Taxpayer First Act Report to Congress and updates to our modernization portfolio will enable us to achieve this transformation and not only support taxpayers, but also to handle persistent and sophisticated challenges to tax administration.

A more efficient, secure and adaptable organization informed by data insights can drive higher quality service, improve enforcement efforts and better enable our employees and partners. Through comprehensive transformation, we will be better prepared to achieve each of our strategic goals with an organization focused on and prepared for the future.

 

 

 

 

The cost of Digital Interactions dropped from 20 cents in FY2016 to 13 cents in FY2021 as the number of interactions rose from 348 million to 1.44 billion.

Trends and Challenges

Fortifying Cybersecurity and Data Protection

A rise in cyberthreats and ransom-ware attacks in recent years have plagued both government and commercial entities, ranging from public infrastructure impairments to personal data loss. The IRS has a collection of personal and financial data that it must keep secure and defend against complex cyberattacks. The IRS observes and mitigates more than 1.4 billion cyberattacks annually, including denial-of-service attacks, intrusion attempts, probes or scans and other unauthorized connectivity attempts. Technological and security investments help ensure that the IRS maintains a reputation for delivering high-quality taxpayer experience while safeguarding taxpayer data, which can help with achieving digital self-service adoption targets.

Adapting to Evolving Technology and Expectations

The IRS must be quick to respond to a rapidly evolving environment where taxpayer and employee expectations and legislative and regulatory directions shift. We have a responsibility as a large, high-impact service provider to modernize and operate in response to these changes in a sustainable and cost-effective manner. Taxpayer-facing and internal digital transformation initiatives help the IRS quickly meet these shifting expectations and yield a significant return on investment compared to existing technology and processes. Successful adaptation also requires an organizational culture that emphasizes agility to take on new challenges, such as the IRS’s increasing role in the administration of taxpayer benefits. Consistent multi-year funding helps the IRS respond to continued and rapid change in expectations and deliver in a more sustainable manner.

Objectives & Strategies

Redesign and Maximize Efficiencies

Objective 4.1: Reorganize our operational structure to provide an exceptional taxpayer experience by increasing collaboration and maximizing efficiencies.

The IRS will redesign its structure to increase collaboration across business units, ensure consistency of service in each interaction and streamline operations to truly operate as One IRS. This new organization and implementation of the recommendations within the TFA Report to Congress will enable us to better deliver our mission-critical services, improve the taxpayer and employee experience and continue being cost-conscious stewards of taxpayer funds.

Strategy 4.1.1: Reorganize taxpayer service and compliance operations to optimize mission-critical functions.

Strategy 4.1.2: Streamline processes through more efficient governance, procurement and collaboration.

Strategy 4.1.3: Enhance financial management and promote sound internal controls.

Strategy 4.1.4: Incorporate climate resilience and environmental justice considerations into the planning and implementation of physical infrastructure improvement projects.

Modernize Infrastructure

Objective 4.2: Modernize technology infrastructure and develop secure and sustainable solutions to improve tax administration.

Part of the IRS’s transformation is new, sustainable investment alongside the retirement of legacy systems to improve service and enforcement efforts. The IRS recognizes that the rate of technological change is swift, and we strive to readily modernize in the face of technological advancements and emerging threats from bad actors.

Strategy 4.2.1: Strengthen organizational resilience by upgrading and decommissioning systems, where appropriate.

Strategy 4.2.2: Enhance operational agility by adopting advanced technologies and leveraging common platforms across business units.

Strategy 4.2.3: Accelerate cybersecurity modernization efforts to protect high-value assets from malicious cyber threats and improve identity and access management for trusted users.

Increase Digitalization

Objective 4.3: Increase digitalization to streamline processes, improve access to digital data and lessen our environmental impact.

We aim to modernize sustainably by reducing paper reliance, investing in technologies that support climate-friendly operations, offering taxpayers digital access and training employees on digital tools and procedures. These investments are at the heart of our Digitalization Strategy and part of governmentwide efforts to modernize services and prioritize operations to combat the harmful effects of climate change.

Strategy 4.3.1: Reduce incoming paper volume and minimize internal paper-producing processes.

Strategy 4.3.2: Convert paper-based information into a digital format and increase access to digital data.

Strategy 4.3.3: Prepare and train employees to manage and use digital data more effectively.

Improve Data-Driven Decision-Making

Objective 4.4: Improve data management and application of analytical capabilities to drive evidence-based decisions.

It is crucial to enhance the taxpayer experience by prioritizing data accessibility and analytical skill development to improve how we evaluate compliance. Our data governance strategy encourages data-driven decision-making and data integration between the IRS and its partners to proactively improve and respond to service and enforcement challenges.

Strategy 4.4.1: Develop a secure data management strategy and a Servicewide understanding of operational data to promote data literacy.

Strategy 4.4.2: Increase training and access to analytical capabilities.

Strategy 4.4.3: Improve third-party data sharing and internal data utilization to enhance operational decision-making.

 

Organizational Redesign

IRS Next Logo

The Taxpayer First Act Report to Congress laid out recommendations for an operating model and organizational structure that would, among other things, increase collaboration, coordinate strategic implementation of large-scale initiatives and enhance innovation. The IRS NEXT Office will spearhead Servicewide efforts to revitalize the IRS as a high-performing organization that increases efficiency, creates meaningful career paths for employees and provides flexibility to meet changing demands.

Bureau Climate Action Plan

The IRS has developed the following actions described in the IRS Climate Action Plan with focus on environmental justice and enhancing America’s clean energy efforts:

  • expand IRS services and operations into areas disproportionately affected by extreme weather effects, such as Puerto Rico
  • develop, implement and facilitate a Climate Literacy Working Group
  • procure and implement an Energy Savings Performance Contract through the Department of Energy
  • increase and support use of Renewable Energy Technologies at IRS sites nationwide
  • develop, implement and facilitate an intra-agency Green Fleet Work Group

Digitalization Initiatives

The Enterprise Digitalization and Case Management Office is leading the development of IRS’s Digitalization Strategy, which aims to reduce paper volume and increase access and management of digital data. Investments, such as digital scanning, character recognition software and augmented reality help the IRS efficiently process and gain broader access to paper-based information.

Modernizing Operations

The IRS Modernization Portfolio includes dozens of efforts, such as:

  • new digital tools and services
  • technology to help reduce wait time on IRS phone lines
  • easier and more secure data protection capabilities
  • updates to core case and account management systems

These efforts directly support modernizing our technology infrastructure and multiple strategic goals.

Goal 4: Measuring Success

Progress and success of our Transformation Goal will be supported by measures, including but not limited to:

  • Percent of Aged Hardware: Measures the percentage of IT hardware in operation past its useful life.
  • Percent of High-Volume IRS Notices Available to be Viewed by Taxpayers Digitally: Measures the percent of high-volume notices that can be viewed digitally.