WASHINGTON, D.C. — In a significant advancement under the Inflation Reduction Act, U.S. Secretary of the Treasury Janet L. Yellen, along with IRS Commissioner Danny Werfel, have unveiled new measures aimed at bolstering tax compliance, enhancing taxpayer services, and modernizing critical technological infrastructure. These initiatives are designed to ensure that high-income individuals meet their tax obligations, improve the digital interaction between taxpayers and the IRS, and update the agency’s aging technology systems.
One of the key components of this initiative is the IRS’s intensified focus on ensuring that wealthy individuals pay the taxes they owe. With the backing of recent funding, the IRS has actively pursued 125,000 high-income taxpayers who failed to file returns since 2017, leveraging third-party information indicating substantial income. This effort has already resulted in nearly $172 million being recovered from approximately 21,000 individuals. Furthermore, an expanded initiative targeting high-income non-filers with recognized tax debts has recovered over $1.1 billion, significantly enhancing tax compliance among affluent taxpayers.
In an era increasingly defined by digital interactions, the IRS’s Digital First Initiative stands out as a transformative effort. Utilizing resources from the Inflation Reduction Act, the IRS is enhancing its online platforms to provide taxpayers with a streamlined, bank-like experience. Recent upgrades include the introduction of the Business Tax Account, mobile-friendly tools like the “Where’s My Refund?” feature, and the new Direct File service. As a result, the IRS is offering a comprehensive digital experience, ensuring taxpayers can manage their obligations with greater ease and efficiency.
Moreover, a vital component of these enhancements is the modernization of the IRS’s foundational technology. For decades, the IRS relied on outdated systems using legacy coding languages. In a crucial milestone, the IRS has transitioned a significant portion of its Individual Master File system to Java, a modern programming language. This upgrade promises more efficient data processing and storage, paving the way for real-time taxpayer interactions and enabling the IRS to swiftly implement legislative changes.
These initiatives collectively signal a robust commitment to improving tax administration and service delivery. By enhancing compliance measures, modernizing technology, and prioritizing taxpayer convenience, the IRS and Treasury are setting a new standard for efficiency and reliability in federal tax operations. As these projects advance, they promise not only to improve current processes but also to prepare the agency for future challenges in a rapidly evolving digital landscape.
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