The Internal Revenue Service has made many changes in recent years, improving tax processing systems, increasing electronic filing and payment options and expanding services available on IRS.gov for taxpayers and tax professionals. As the needs of taxpayers, the tax community and the nation continue to rapidly evolve, it's clear the IRS needs to look at the future in a more comprehensive way.
We need to take advantage of the latest technology to enhance the entire taxpayer experience. And we need to do that in a way that meets the needs of taxpayers and the tax community in an efficient and effective manner.
Preparing the IRS to adapt to the changing needs of taxpayers is described generally as the IRS Future State initiative.
Our Future State efforts continue to evolve, and continuing to get feedback from many sources will be a critical part of these efforts to help improve tax administration in a rapidly evolving world. The IRS Future State will encompass some of the following aspects.
The Taxpayer Component
A central concept of the Future State focuses on taxpayers and how to provide the services they need in the way that works for them. Many taxpayers only interact with the IRS once a year when they file their tax returns. When people have a more complex tax issue, they want the interaction with the IRS to be as quick and easy as possible.
A key part of this effort is for taxpayers to have a more complete online experience for their IRS interactions. Taxpayers should expect the same level of service when dealing with the IRS in the future as they have now from their financial institution or a retailer. The idea is that taxpayers would have an account at the IRS where they, or those they authorize, can log in securely, get the information about their account and interact with the IRS as needed. This approach also has a goal of freeing up limited IRS in-person resources — such as our phone lines — to more easily serve people and tax professionals who need one-on-one assistance. This personal assistance remains a critical part of any IRS Future State.
Improving service to taxpayers in this way can also help us on the enforcement side of the equation. We need to be faster and smarter. With a more modern system, the IRS could identify problems in tax returns when a return is filed – rather than contacting taxpayers years after the fact while the meter is running on potential interest and penalties. We want to interact with taxpayers as soon as possible so that non-compliance issues can be corrected without costly follow-up contacts or labor-intensive audits.
This up-front issue identification effort could also help in other areas as well, such as the ongoing battle over the use of stolen identities to file fraudulent tax returns. We also remain focused on providing greater security in the future. We are pursuing more ways to protect taxpayers. We need to be sure we are interacting with the right person. Improving identity authentication is a major goal going forward.
A more detailed look at the taxpayer experience is available in Taxpayer's Future Interaction With the IRS.
Future State ties into many IRS activities
The IRS has many efforts underway to improve taxpayer service, enforcement and operations in an environment of limited resources and rapid changes in technology. The IRS is thinking about the entire taxpayer service and enforcement mission in new ways — in a transformative way that will be cost-effective for taxpayers.
To better serve taxpayers, we need to align our organizations to help us most effectively meet their needs. Several projects underway will help us identify areas where we can become more effective, more efficient and/or generate savings to reinvest in the future. We are looking at these initiatives across the Service that will transform our work in ways that are easy and cost-effective for taxpayers.
Many business units continue to develop and consider a number of projects tied to the larger Future State effort with a goal of improving taxpayer service, better equipping employees and achieving compliance outcomes. Those efforts include:
- Tax Exempt/Government Entities has many initiatives underway, including a Lean Six Sigma review of determination letter processes in Exempt Organizations and Employee Plans and developing web-based solutions for taxpayer service and outreach.
- Wage & Investment has been steadily moving toward the Future State, taking advantage of long-term planning, engagement and collaboration. The Service Approach has resulted in changes to taxpayer services that allowed us to serve more taxpayers overall, and several other service-related projects and realignment efforts are already complete or underway.
- Small Business/Self-Employed is looking to find better and more efficient ways of doing business, including using technology to transform taxpayer service and enforcement.
- Large Business & International has several efforts underway to support a flexible and well-trained workforce, select better work, tailor work streams to achieve compliance outcomes and to promote innovation and feedback-based improvement.
Some of the other initiatives related to the Future State include:
- Security Summit — Tax industry and state tax authorities have joined with IRS to implement several initiatives to combat identity theft and refund fraud.
- Taxpayer Assistance Center (TAC) appointment test — Allows taxpayers to schedule appointments at TACs.
- Web-first service strategy — Provides taxpayers with immediate options to get tax information and automated services online, which allows customer-facing employees to help more taxpayers who need person-to-person assistance.
- Compliance realignment — Realigned organizations inside the IRS mean that most post-filing compliance activities now reside within Small Business/Self-Employed and most pre-refund compliance activities and pre-/post-refund Earned Income Tax Credit activities are worked within Wage & Investment.
- Identity Theft Victim Assistance Directorate — Centralizes the identity theft victim assistance work and provides end-to-end accountability, all with the goal of helping taxpayers to receive timely and consistent help in resolving their cases.
- The Enterprise eRecords Management Team is working to develop IRS policies, procedures and IT solutions for electronic records management and archiving (including email). The team has made progress toward implementing a Servicewide electronic records management process.
- Real-estate savings. As the IRS workforce declines and needs shift, the IRS continues to look to find cost savings and efficiencies, including reviewing office space and posts of duty with expiring leases or expiring federal building occupancies. Office space reduction efforts are not new at the IRS. In the past 5 years alone we have eliminated more than 2.4 million square feet of excess space in the portfolio. The cumulative effect of these reductions is $64 million in less rent needed in 2016; funds that can be used to generate more rent savings and support other core services of the IRS such as training.
The changes underway and those being considered won’t be completed overnight, and getting feedback on these efforts from stakeholders will help shape them. These changes are all part of improving IRS operations to better serve taxpayers and support the nation's tax system.
The Taxpayer Bill of Rights is a foundational component underlying the future vision of the IRS and reflects the agency’s ongoing commitment to respecting taxpayer rights. For example, the right to quality service is a central part of these efforts.
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