News & Events

The Internal Revenue Service (IRS) recently released its Strategic Plan for fiscal years 2022 through 2026. The IRS’ Strategic Plan contains some important insights for both individual and corporate taxpayers—including insights regarding the IRS’ enforcement priorities over the next five years.

The IRS Is Increasing Its Focus on Businesses and High-Income Taxpayers

As stated in the FY 2022-2026 Strategic Plan, for fiscal years 2022 through 2026, the IRS “is increasing focus on non-compliant, high-income and high-wealth taxpayers, business partnerships, and large corporations.” To do so, it will be relying on both “state-of-the-art enforcement tools and processes” as well as increased staffing in its enforcement divisions. Based on the recent historical data contained in the IRS’ Strategic Plan, the agency will likely continue to emphasize enforcement in the following areas:

• Abusive tax schemes
• Corporate fraud
• Employment tax violations
• Identity theft and cybercrimes
• International tax fraud
• Public corruption
• Refund fraud

Cryptocurrency tax compliance is also likely to be a top priority for the IRS over the next five years. The IRS has taken several steps to bolster its cryptocurrency enforcement capabilities in 2021 and 2022, and the FY 2022-2026 Strategic Plan states that the IRS’ Office of Fraud Enforcement “is investing in world-class blockchain tracing and virtual currency analytics tools for civil compliance employees to increase their awareness and fluency in virtual currency investigative techniques.”

The IRS Will Be Increasingly Relying on AI and Other Predictive Technologies

Enforcing federal tax compliance on a national scale presents a substantial burden, and the IRS has struggled to keep pace in recent years. To streamline its enforcement efforts, the FY 2022-2026 Strategic Plan indicates that the IRS will be investing heavily in AI and other predictive technologies. For example, the Strategic Plan specifically references additional investment in:

• “[A]dvanced technologies to analyze and identify patterns of non-compliance and facilitate appropriate case selection;” and,
• “[P]redictive analytics to provide potential recommendations for taxpayer actions or treatments using aggregated case data.”

With the IRS casting a broader enforcement net in the years to come, more taxpayers can expect to face audits and investigations. In addition to the priority areas listed above, individual and corporate taxpayers alike will need to take care to ensure compliance in all other areas as well, and they will need to avoid “quiet disclosures” and other mistakes that are likely to trigger red flags in the IRS’ predictive software. For those who make mistakes, remedying these mistakes proactively in order to mitigate the consequences could take on heightened importance as well.

Request an Appointment with IRS Tax Lawyer Kevin E. Thorn

Do you have questions or concerns about your obligations as a taxpayer in New Jersey? If so, IRS tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, can help you make informed decisions. To request a confidential consultation with Mr. Thorn, please call us at 201-842-7696, email ket@thornlawgroup.com or tell us how we can contact you online today.