IRS Unveils Strategic Plan to Tackle Tax Gap with IRA Funds: Focus on High-Income Taxpayers and Large Corporations!

IRS Unveils Strategic Plan to Enhance Tax Administration and Reduce Tax Gap

Expansion of Large Corporate Compliance Program Targets Top Corporate Partnerships

According to Fast Company.com, the IRS has unveiled a strategic plan to improve tax administration and reduce the tax gap fueled by funding from the Inflation Reduction Act (IRA) of 2022. With substantial funds allocated for modernization workforce diversity, and enforcement, the IRS aims to address tax non-compliance among high-income taxpayers and large corporations. Key aspects include significantly increasing audit rates for individuals with incomes over $10 million and tripling audits for corporations with assets exceeding $250 million.

In addition to targeting high-income taxpayers the IRS is expanding its Large Corporate Compliance (LCC) program to include examinations of 76 of the largest corporate partnerships in the U.S. The goal is to promote fairness in tax compliance by tripling audit rates for these corporations and addressing the persistent challenge of the tax gap. Through focused audits and heightened scrutiny the IRS seeks to ensure that large corporations fulfill their tax obligations effectively and contribute to a more equitable tax system.

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IRS Unveils Strategic Plan to Tackle Tax Gap with IRA Funds: Focus on High-Income Taxpayers and Large Corporations!(PHOTO: Los Angeles Times)

Strengthening Enforcement: IRS Invests in Hiring, Training, and AI-driven Analytics

Furthermore, the IRS is actively working to strengthen its enforcement capabilities through the implementation of hiring and training initiatives. These efforts involve the recruitment of skilled professionals such as accountants, lawyers, data scientists, and engineers, who will bolster the agency’s capacity to conduct audits and investigations. Additionally the IRS is leveraging artificial intelligence (AI) to enhance its analytics capabilities, enabling it to identify high-risk cases of non-compliance among both individuals and corporations more efficiently. By utilizing AI-driven tools, the agency aims to optimize its resources and minimize the burden on compliant taxpayers while effectively targeting those who engage in tax evasion or fraud. As the IRS charts a course towards more effective tax administration, these strategic measures underscore its commitment to upholding tax fairness, integrity, and accountability across all income brackets and corporate entities ultimately ensuring the integrity of the U.S. tax system as a whole.

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