On September 6, 2024, U.S. Secretary of the Treasury Janet L. Yellen and Commissioner of the Internal Revenue Service Danny Werfel announced significant milestones under the Inflation Reduction Act initiatives at the IRS campus in Austin, Texas. These initiatives aim to ensure that wealthy individuals pay their owed taxes, improve taxpayer services through digital advancements, and modernize foundational technology.
The IRS launched an initiative in February 2024 targeting 125,000 high-income taxpayers who have not filed taxes since 2017. The IRS identified these individuals through third-party information indicating they received substantial income but failed to file tax returns. Due to previous budget constraints, this program had been sporadic since 2016. With new funding from the Inflation Reduction Act, nearly 21,000 of these taxpayers have now filed returns, resulting in $172 million in recovered taxes.
In fall 2023, another initiative was introduced to pursue high-income individuals with recognized tax debt exceeding $250,000. This effort has led to over $1.1 billion being recovered from approximately 1,600 individuals with delinquent tax debt. Notably, $100 million was collected since July when the IRS reached a $1 billion milestone.
The IRS is also enhancing taxpayer services through its Digital First Initiative by utilizing resources from the Inflation Reduction Act. The agency has developed online tools aimed at providing a modern experience similar to financial institutions. These tools include updates to the “Where’s My Refund?” tool and more than two dozen new features for Individual and Tax Professional Online Accounts.
Further advancements include launching Business Tax Account and releasing mobile-adaptive forms for easier access. The Digital First Initiative envisions a future where all transactions with the IRS can be conducted digitally if preferred by taxpayers.
Modernization efforts are underway for foundational technology that has been in use for over six decades. A critical component of this modernization is porting outdated codebase from Assembly language to Java for the Individual Master File (IMF). This shift aims to enhance data processing accuracy and security while reducing maintenance costs.
The new Integrated Tax Processing Engine (ITPE) will operate alongside IMF during its verification phase and host data on a cloud-based Enterprise Data Platform. These improvements are expected to enable real-time data processing and better service delivery akin to financial institutions.
The IRS’s ongoing modernization projects were previously delayed due to underfunding but are now progressing thanks to resources provided by the Inflation Reduction Act.
###
