Congressional Budget

Justification &

Annual Performance

Report and Plan

Fiscal Year

2022

Publication 4450 (Rev. 5-2021) Catalog Number 39720Z

Department of the Treasury Internal Revenue Service www.irs.gov

 Fiscal Year 2022

Publication 4450 (Rev. 2-2020) 

Catalog Number 39720Z

Department 

www.irs.gov
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Table of Contents

Section I – Budget Request........................................................................................................... 1

A – Mission Statement .............................................................................................................. 1

1.1 – Appropriations Detail Table ........................................................................................... 1

Program Integrity Allocation Adjustment.............................................................................. 5

B – Summary of the Request.................................................................................................... 7

1.2 – Budget Adjustments Table .............................................................................................. 9

C – Base Adjustment and Program Changes Description................................................... 10

Base Adjustment...................................................................................................................... 10

Maintaining Current Levels................................................................................................... 10

Pay Annualization (1.0%) ..................................................................................................... 10

Pay Raise (2.7%)................................................................................................................... 10

Non-Pay................................................................................................................................. 10

Federal Employee Retirement System (FERS) Contribution Increase.................................. 10

Efficiencies / Savings............................................................................................................... 10

Increase e-File Savings ......................................................................................................... 10

Personnel Savings ................................................................................................................. 10

Program Increases................................................................................................................... 11

Putting Taxpayers First......................................................................................................... 11

Ensure Fairness of the Tax System........................................................................................ 15

Improve Live Assistance ........................................................................................................ 26

IRS Integrated Modernization Business Plan........................................................................ 27

Electric Vehicles and Associated Infrastructure ................................................................... 30

1.3 – Object Classification (Schedule O) Obligations .......................................................... 31

D – Appropriations Language and Explanation of Changes .............................................. 32

E – Legislative Proposals........................................................................................................ 41

F – Evidence Building Activity............................................................................................... 44

Section II – Budget and Performance Plan .............................................................................. 46

A – Strategic Alignment.......................................................................................................... 46

Taxpayer Services ................................................................................................................... 49

2.1 – Budget Adjustment Table ............................................................................................ 49

2.2 – Object Classification Obligations................................................................................ 50

2.3 – Appropriation Detail Table ......................................................................................... 51

2A – Pre-Filing Taxpayer Assistance and Education......................................................... 51

2.1.1 – Budget and Performance Report and Plan ............................................................. 54

2B – Filing and Account Services........................................................................................ 55

2.1.2 – Budget and Performance Report and Plan ............................................................. 59

Enforcement............................................................................................................................. 60

2.1 – Budget Adjustments Table........................................................................................... 61

2.2 – Object Classification Obligations................................................................................ 62

2.3 – Appropriation Detail Table ......................................................................................... 63
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2C – Investigations............................................................................................................... 63

2.1.3 – Budget and Performance Report and Plan ............................................................. 67

2D – Exam and Collections.................................................................................................. 68

2.1.4 – Budget and Performance Report and Plan ............................................................. 74

2E – Regulatory .................................................................................................................... 75

2.1.5 – Budget and Performance Report and Plan ............................................................. 77

Operations Support................................................................................................................. 78

2.1 – Budget Adjustments Table........................................................................................... 79

2.2 – Object Classification Obligations................................................................................ 80

2.3 – Appropriation Detail Table ......................................................................................... 81

2F – Infrastructure............................................................................................................... 81

2.1.6 – Budget and Performance Report and Plan ............................................................. 84

2G – Shared Services and Support....................................................................................... 84

2.1.7 – Budget and Performance Report and Plan ............................................................. 88

2H – Information Services................................................................................................... 88

2.1.8 – Budget and Performance Report and Plan ............................................................. 92

Business Systems Modernization ........................................................................................... 93

2.1 – Budget Adjustments Table........................................................................................... 93

2.2 – Object Classification Obligations................................................................................ 94

2.3 – Appropriation Detail Table ......................................................................................... 95

2I – Business Systems Modernization.................................................................................. 95

2.1.9 – Budget and Performance Report and Plan ............................................................. 97

B - FY 2020 - FY 2022 IRS Integrated Modernization Business Plan ............................... 98

C – Changes in Performance Measures .............................................................................. 100

Section III – Supplemental Information................................................................................. 101

3.1 – Summary of Capital Investments ............................................................................... 101

3.2 – Return on Investment (ROI) for IRS Major Enforcement Programs .................... 115

3.3 – IRS Performance Measures Table.............................................................................. 117

3.4 – Summary of FY 2020 Savings Realized...................................................................... 119

Section IV – Appendix.............................................................................................................. 120

4.1 - COVID-19 Supplemental Funding.............................................................................. 120

4.2 - Mandatory Funding and Program Integrity Allocation Adjustment Proposals .... 123

4.3 - Appropriations Detail Table with Program Integrity Allocation Adjustment ....... 127

Increase Audit Coverage ..................................................................................................... 129

Increase Collection Coverage ............................................................................................. 131

Expand Coverage in the Tax-Exempt Sector....................................................................... 134

Enhance Return Review Program ....................................................................................... 136

Enhance Enforcement Operations....................................................................................... 137

4.4 – Summary of IRS FY 2022 Request by Business Unit (including the Program 

Integrity Allocation Adjustment)......................................................................................... 139

4.5 – Summary of IRS FY 2022 Identity Theft Budget Request....................................... 139

4.6 – Summary of IRS FY 2022 ACA Budget Request...................................................... 140
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4.7 – Summary of IRS FY 2022 Cyber Security Budget Request..................................... 140

4.8 – Summary of IRS FY 2022 Budget Request................................................................ 141
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Section I – Budget Request

A – Mission Statement

Provide America’s taxpayers top-quality service by helping them understand and meet 

their tax responsibilities and enforce the law with integrity and fairness to all.

1.1 – Appropriations Detail Table

Dollars in thousands

Internal Revenue Service

Appropriated Resources

FTE AMOUNT FTE AMOUNT AMOUNT AMOUNT AMOUNT

New Appropriated Resources:

Taxpayer Services 26,760 $2,535,554 25,989 $2,587,606 $2,940,876 $353,270 13.65%

Pre-Filing Taxpayer Assistance and 

Education 4,524 647,066 4,514 657,618 713,346 55,728 8.47%

Filing and Account Services 22,236 1,888,488 21,475 1,929,988 2,227,530 297,542 15.42%

Enforcement 35,388 $4,909,500 34,989 $5,004,622 $5,462,823 $458,201 9.16%

Investigations 2,971 648,819 3,012 698,193 773,605 75,412 10.80%

Exam and Collections 31,467 4,081,409 30,987 4,120,886 4,497,709 376,823 9.14%

Regulatory 950 179,272 990 185,543 191,509 5,966 3.22%

Operations Support 11,970 $3,885,000 12,037 $4,104,102 $4,448,195 $344,093 8.38%

Infrastructure 881,670 886,713 971,008 84,295 9.51%

Shared Services and Support 4,947 990,690 5,122 1,024,654 1,088,217 63,563 6.20%

Information Services 7,023 2,012,640 6,915 2,192,735 2,388,970 196,235 8.95%

Business Systems Modernization 426 $180,000 394 $222,724 $305,032 $82,308 36.96%

Subtotal New Appropriated Resources 74,544 $11,510,054 73,409 $11,919,054 $13,156,926 $1,237,872 10.39%

Other Resources:

Reimbursables 790 106,965 808 179,759 189,645 9,886 5.50%

Offsetting Collections - Non 

Reimbursables 6,728 21,300 22,472 1,172 5.50%

User Fees 4 485,997 1,536 585,244 435,400 (149,844) -25.60%

Recovery from Prior Years 11 16,457 16,764 16,764

Unobligated Balances from Prior 

Years 385 171,189 15 318,017 327,299 9,282 2.92%

Transfers In/Out 137 140 140

Recoveries Paid 3,604 3,604

Resources from Other Accounts 274 434 123,039 98,153 (24,886) -20.23%

Subtotal Other Resources 1,464 $787,473 2,793 $1,247,867 $1,093,477 ($154,390) -12.37%

Total Budgetary Resources 76,008 $12,297,527 76,202 $13,166,921 $14,250,403 $1,083,482 8.23%

1 FY 2020 Other Resources represent actuals.

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the 

Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 

116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million Program Integrity Allocation Adjustment, and the 

$79 billion mandatory funding proposal.

% Change

FY 2020

Operating Plan1

FY 2021

Operating Plan2

FY 2022

Request

FY 2021 to FY 

2022 Request

FY 2021 to FY 

2022 Request

Change

2 FY 2021 Operating Plan includes a $176 million interappropriation transfer from Enforcement to Operations Support to cover anticipated operations 

and maintenance requirements in FY 2021. FY 2021 Enacted amount also includes a $32 million transfer from Enforcement to Taxpayer Services.
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Introduction 

The Internal Revenue Service (IRS) FY 2022 budget request is $13.2 billion, $1.2 billion 

(10.4 percent) more than the FY 2021 enacted level, to administer the nation’s tax 

system fairly, collect $3.5 trillion in taxes to fund the government, and strengthen tax 

compliance. In addition, the budget request proposes a $417 million program integrity 

allocation adjustment investment in FY 2022 that will increase tax compliance and 

revenue and reduce the tax gap. In addition, the Budget includes a multi-year initiative 

(see Appendix 4.2) to improve tax compliance and enforcement, modernize IRS IT 

systems, support increased information reporting, and support the Administration's 

proposal to make the Child Tax Credit expansion and the advance payments permanent 

as well as additional authority to improve tax administration efforts. The budget request 

includes discussion on how the IRS assisted taxpayers by implementation initiatives 

supported by the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act and 

Families First Coronavirus Response Act in section 4.2. 

The IRS has an overall return on investment (ROI) of about $5 for every $1 invested, 

excluding significant deterrence effects. Overall, this request supports fair and equitable 

tax administration for all Americans, including increasing oversight of 

high-income/high-wealth individuals and corporations to ensure compliance. It also 

improves taxpayer experience by providing new and improved online tools for taxpayers 

to communicate with the IRS easily and quickly. This IRS continues to improve telephone 

and in-person taxpayer customer service. Additionally, it is expanding outreach and 

assistance to underserved communities. The FY 2022 Budget requests a total program 

increase of $915.5 million including: 
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• $176.1 million for continuing the implementation of the Taxpayer First Act 

implementation activities;

• $340.0 million for establishing enforcement strategies that will ensure a fair tax 

system;

• $318.0 increase live assistance including telephone level of service, 

correspondence, and in-person visits;

• $78.1 million for IT modernization activities; and

• $3.0 million to lease and maintain a fleet of electric vehicles. 

Through IRS enforcement efforts and strategies for meeting the needs of taxpayers, the 

IRS intends to decrease the tax gap. The IRS dedicates itself to improving the taxpayer 

experience so that taxpayers and their representatives can understand and meet their 

tax obligations with minimal burden. The IRS’s aim is to increase voluntary compliance 

through simplifying the tax filing, correction, and payment processes. To help achieve 

this, the IRS will focus on improving education and outreach on taxpayer rights and 

obligations and enhancing service channels to meet taxpayer needs. In addition to 

improving the taxpayer experience, another priority of the IRS is to ensure taxpayers 

comply with the tax law. The IRS continues to develop innovative approaches to 

understanding, detecting, and resolving potential noncompliance to maintain taxpayer 

confidence in the tax system. The IRS’s efforts to improve the taxpayer experience and 

enforce the tax laws will lead to a reduction in the tax gap over time. Reducing the tax 

gap requires the IRS to maintain a robust enforcement program. 

Appropriations for the IRS fell by about 20 percent (adjusted for inflation) since FY 2010. 

About 70 percent of the IRS’s overall budget is for labor, and thus the decline in the 

overall IRS budget resulted in a 15 percent decline in the number of full-time employees 

at the agency (since FY 2010) and a 31 percent decline in the number of full-time 

employees working in enforcement roles (since FY 2010). The IRS lost more than 33,378 

full-time personnel between FY 2010 and FY 2020, including more than 13,388 key 

enforcement personnel. These losses included revenue agents and revenue officers, who 

audit tax returns and perform collection activities, as well as special agents who 

investigate tax-related crimes and other issues. The number of examining revenue 

agents, who handle complex enforcement cases, fell by 35 percent, and field collection 

revenue officers, who manage difficult collections cases, dropped by 48 percent. The 

loss of enforcement employees since 2010 has resulted in the examination rate for 

individual returns falling by about 45 percent; for businesses with assets equal to or 

exceeding $10 million, the examination rate fell by about 72 percent.
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The effect of personnel lost is most visible in enforcement activities. Among the 33,3781

full-time personnel lost between FY 2010 and FY 2020, more than 13,388 were

enforcement personnel. These losses included revenue agents and revenue officers, who 

audit tax returns and perform collection activities, as well as special agents who 

investigate tax-related crimes and other issues. Although the IRS workforce increased 

over the past year, IRS staffing levels are comparable to where the IRS was in 1973, 

when the U.S. population was about 210 million, versus today’s population of about 333 

million.

1 FY 2010 through FY 2020 full-time personnel lost, is not a net loss of FTE. This statistic does not include the number of personnel 

hired during the same time.
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Reductions to enforcement staffing levels between FY 2010 and 2020 likely reduced 

total enforcement revenue collected (TERC) by around $83 billion.

While a portion of the unpaid tax obligations that make up the tax gap result from a 

lack of knowledge or ambiguity and complexity in tax law, willful evasion is a significant 

contributing factor. The IRS could help remedy this with investments funded by the 

program integrity allocation adjustment, which includes targeted investments in 

enforcement activities that will increase revenue and lower the tax gap.

The FY 2022 request and legislative proposals provide the IRS with a blueprint to 

address various facets of the tax gap. The modernization plan will provide significant 

improvements in the taxpayer experience by increasing online service options and 

making it easier for taxpayers to find answers to their questions. IRS research 

demonstrates that making it easier for taxpayers to meet their obligations with selfservice tools and user-friendly customer service improves compliance.

Program Integrity Allocation Adjustment 

In addition to the base appropriations request of $13.2 billion, the Budget proposes a 

$417 million discretionary program integrity allocation adjustment in FY 2022 to fund 

investments in expanding and improving the effectiveness and efficiency of the IRS’s 

overall tax enforcement program. The budget proposes $287 million for the 

Enforcement account and $129 million for the Operations Support account. These 

investments will generate $38.6 billion in new direct revenue and protect $11.6 billion

over 10 years, costing $6.7 billion. This return on investment (ROI) is likely understated 
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because it does not reflect the effect that enhanced enforcement has on deterring noncompliance.
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B – Summary of the Request

The IRS is responsible for administering the nation’s tax system and meeting the needs 

of America’s taxpayers by helping them understand their tax responsibilities and by 

enforcing the law with integrity and fairness. The IRS’s core operations include collection 

of individual and corporate taxes, examination of returns, taxpayer assistance, and 

oversight of tax-exempt organizations, as well as administering multiple refundable tax 

credits and other specialized programs. 

In FY 2020 the IRS collected $3.5 trillion in taxes (gross receipts before tax refunds) and 

generated 96 percent of the funding that supports the Federal Government’s 

operations. With the U.S. tax base becoming more complex, one of the IRS’s key 

responsibilities is to make it easier for taxpayers to understand and meet their tax 

obligations.

Almost 96 percent of the gross revenue of the United States flows through the 

IRS. Every American is important to the IRS, and the IRS is important to every 

American. The IRS is endeavoring to continue earning the respect and trust of 

every American. We proudly serve all taxpayers, none more or less so than any 

other. We must continue to operate through their eyes, from their perspective, 

enhancing their experiences while striving to provide clear, meaningful guidance 

and services, in the language of their choice, wherever possible. In support of 

compliant taxpayers, we will continue to aggressively pursue non-compliant 

taxpayers by maintaining robust, visible, civil, and criminal enforcement efforts. 

To continue to deliver on our mission, the IRS requires consistent, timely, multiyear funding. The entire IRS workforce wants to do more, and with adequate 

resources provided by Congress to help us reach our vision, we will.

Chuck Rettig

Commissioner

242M $3.5T $2,034 $51.1B

Federal Tax

Returns and 

Forms

Processed

Collected in 

Gross Taxes

Average 

Individual 

Refund

Enforcement 

Revenue Collected
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FY 2022 Budget Request and Priorities

The FY 2022 request is $13.2 billion, $1.2 billion or 10.4 percent more than the FY 2021

operating level of $11.9 billion. The base budget request provides funding to carry out 

the IRS mission. 

Appropriation Account ($ in 

Millions)

Taxpayer Services $2,940.9

Enforcement 5,462.8

Operations Support 4,448.2

Business Systems Modernization 305.0

Total Appropriated Resources $13,156.9

This funding level includes a program increase of $915 million for Putting Taxpayers First 

($176 million), Ensuring Fairness of the Tax System ($340 million), Improving Live 

Assistance ($318 million), and the continuance of IT Modernization efforts ($78 million).
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1.2 – Budget Adjustments Table 

Dollars in thousands

Bureau: Internal Revenue Service 

Summary of Proposed FY 2021 Request FTE Amount

FY 2021 Operating Plan 73,409 $11,919,054

Changes to Base:

Maintaining Current Levels (MCLs) $327,995

Pay Annualization (1.0% average pay raise) 22,442

Pay Raise (2.7% average pay raise) 182,239

Non-Pay 55,641

FERS Contribution Increase 67,673

Efficiencies/Savings: (409) ($5,585)

Increase e-File Savings (101) (5,585)

Personnel Savings (308)

Subtotal FY 2022 Changes to Base (409) $322,410

FY 2022 Current Services 73,000 $12,241,464

Program Changes:

Program Increases

Putting Taxpayers First 294 176,086

User Authentication 27,000

Taxpayer Experience Strategy 294 149,086

Ensure Fairness of the Tax System 1,833 340,267

Improve Live Assistance 4,203 318,000

Integrated Modernization Business Plan 18 78,143

Electric Vehicles and Associated Infrastructure 2,966

Subtotal FY 2022 Program Increases 6,348 $915,462

Total FY 2022 Budget Request 79,348 $13,156,926

PIAA Program Increases

Increase Audit Coverage 1,043 148,810

Increase Collection Coverage 1,184 159,456

Expand Coverage in the Tax-Exempt Sector 244 37,950

Enhance Return Review Program 60 38,341

Enhance Enforcement Operations 23 32,340

Subtotal FY 2022 PIAA Program Increases 2,554 $416,897

Total FY 2022 Request Including PIAA 81,902 $13,573,823

See footnotes in 1.1 -- Appropriations Detail Table
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C – Base Adjustment and Program Changes Description

Base Adjustment..................................................................................+$0 / +0 FTE

The FY 2021 operating level of $11.9 billion includes an inter-appropriation transfer of 

$208 million from the Enforcement appropriation to the Taxpayer Services appropriation 

($32 million) and the Operations Support appropriation ($176 million). The transfer will 

fund the necessary support costs for increased staffing levels in Enforcement and filing 

season activities in Taxpayer Service.

Maintaining Current Levels................................................. +$327,995,000 / +0 FTE

Pay Annualization (1.0%) +$22,442,000 / +0 FTE

Funds are requested for annualization of a 1 percent average pay raise implemented in 

January 2021. 

Pay Raise (2.7%) +$182,239,000 / +0 FTE

Funds are requested for a 2.7 percent average pay raise effective January 2022.

Non-Pay +$55,641,000 / +0 FTE

Funds are requested for inflationary increases in non-labor expenses such as travel, 

contracts, rent, supplies, and equipment. 

Federal Employee Retirement System (FERS) Contribution Increase +$67,673,000 / +0 

FTE

Funds are requested for the FERS contribution rates effective FY 2022.

Efficiencies / Savings............................................................ -$5,585,300 / -409 FTE

Increase e-File Savings -$5,585,300 / -101 FTE

The IRS projects a total of 1,426,500 fewer returns filed on paper (752,200 individual and 

674,300 business returns). As a result, the IRS would need 101 fewer FTE in submission 

processing, generating a savings of $5.6 million. 

Personnel Savings +$0 / -308 FTE

Although the budget request increases staffing resources to support strategic priorities, 

the IRS must manage its personnel costs through limited attrition replacement and 

seasonal workforce adjustments across many operational areas. These adjustments are 

necessary to fund the $328 million in inflationary and labor cost increases for existing 

personnel, including annualization of the FY 2021 pay raise, the proposed FY 2022 pay 
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raise, employee promotions, and employee retirement contributions. To achieve these 

savings, the IRS plans to:

• Fill critical vacancies only; 

• Streamline the workforce by reducing administrative, analyst, and other support 

positions;

• Realign mission critical occupations by hiring employees who have the 

background and skills to support the IRS in meeting its strategic goals, objectives, 

and priorities.

Program Increases..................................................... +$915,462,000 / +6,348 FTE

Putting Taxpayers First +$176,086,000 / +294 FTE

The Taxpayer First Act (TFA), Public Law 116-25, mandates the IRS to reimagine and 

enhance the way it serves taxpayers, enforces the tax laws in a fair and impartial manner, 

and the way it prepares the agency’s employees to deliver a world-class customer 

experience. The TFA consists of 45 provisions, including specific mandates to improve 

the taxpayer experience. Implementing the TFA will dramatically change how the IRS 

engages with taxpayers. These efforts will improve the experience of taxpayers as they 

interact with the IRS and increase the IRS’s ability to secure taxpayer information, 

protect taxpayer identities, develop additional online capabilities for taxpayers, and 

develop comprehensive training for IRS employees. This investment includes:

Position Type/Other Costs FTE Positions $000

 User Authentication $27,000

 Contract Services 27,000

Expand Digital Services 168.50 337 $101,754

Appeals Officer 9 18 1,273

Attorney 2 4 484

IT Specialist 157.5 315 25,188

Contract Services 74,809

Seamless Experience 115.50 231 $35,063

Revenue Agent 50 100 12,495

Appeals Officer 16 32 2,966

IT Specialist 49.5 99 15,544

Contract Services 4,058

Underserved Strategies 10.00 20 $12,269

Tax Law Specialist 3.5 7 456

Program Analyst 6.5 13 7,313

Contract Services 4,500

Total 294.00 588 $176,086
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User Authentication (+$27,000,000 / +0 FTE)

As the IRS moves to implement the provisions of the TFA, such as the Identity Protection 

PIN (IP PIN) and the Taxpayer Experience Strategy. The IRS will incorporate National 

Institute of Standards and Technology (NIST) Special Publication 800-63-3, Digital

Identity Guidelines, and the recommendations of the Electronic Tax Administration 

Advisory Committee regarding identity theft refund fraud. These standards and 

recommendations guide how the IRS identity proofs and authenticates taxpayers to 

allow secure access to taxpayer online services. Resources are needed to enter a 

contract with a third-party vendor to be able to authenticate taxpayers. This funding will 

allow the IRS to authenticate approximately 8 million new taxpayers who sign up for an 

online account. After the initial authentication, the new NIST standards require 

reauthenticating annually. Besides IP PIN, examples of other IRS applications taxpayers 

access online include Get Transcript Online, the suite of e-Services applications for tax 

professionals, Online Payment Agreements, and the Child Tax Credit portal.

Taxpayer Experience Strategy (+$149,086,000 / +294 FTE)

The TFA requires the IRS to develop and implement a Taxpayer Experience Strategy 

(TXS) to improve the taxpayer experience with the IRS. To fulfill the TXS requirement, the 

IRS’s Taxpayer First Act Office (TFAO), in partnership with key internal and external 

stakeholders and subject matter experts, identified six areas of focus to inform the 

development and implementation of the TFA TXS including Community of Partners, 

Proactive Outreach & Education, Data Management & Analytics, Expanded Digital 

Services, Seamless Experience, and Focused Strategies for Reaching Underserved 

Communities. The FY 2022 request includes additional funding for Expanded Digital 

Services, Seamless Experience, and Focused Strategies for Reaching Underserved 

Communities. These investments include:

• Expanded digital services that include secure document exchange, expanded 

payment options for taxpayers, and established digital authorization with 

eSignature;

• Deliver a more seamless experience through expanded automated callback, 

increased use of the appointment process tool, and expanded AI-powered 

interactions such as chat-bot appointments;

• Strengthened community presence by hiring and training new professionals in 

hard-to-reach communities;

• Improved assistance for taxpayers living abroad by establishing authentication 

protocols;

• Expanded multilingual strategies to increase the number of languages that forms, 

publications, and notices are translated into while also leveraging employee 

multi-lingual skills to provide multi-lingual assistance and services; and
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• Strengthened access to and use of data to improve program delivery, inform 

Artificial Intelligence (AI) service delivery, and create a continuous feedback loop.

Expand Digital Services (+$101,754,000 / +169 FTE)

Funding for this initiative will enhance the IRS’s Online Account for individual taxpayers 

and expand this service to tax professionals. Some aspects of this initiative will rely on 

strengthening and expanding use of data. Additional authenticated online self-services 

will include account updates, secure messaging and notice delivery, full interaction 

history and issue status, refund tracking, expand digital payment options, increase 

electronic receipt of filings and scanning/data capture for paper filings, document 

upload, and more. Taxpayers will see expanded scope for e-signatures, secure document 

exchange and expanded payment options like Venmo and PayPal, and web chat and 

other digital assisted services, including: 

• Expanded Online Account features:

• View Payment, Make a Payment, and Create A Payment Plan;

• Digital Notices w/ Opt-in Subscription for Notifications;

• Tax Professional Account: Establish Digital Power of Attorney (Form 2848) with 

eSignature;

• Secure document exchange: Large and Small Business Secure Messaging/File 

Sharing (Document Upload);

• Digitize more tax forms;

• Expanded payment options to include tools like Venmo, PayPal, Apple Wallet, 

and Google Pay; and

• Foundational IT infrastructure enhancements for eSignature solutions.

Seamless Experience (+$35,063,000 / +115 FTE)

The IRS will provide taxpayers with their preferred channel of service (web, phone, in 

person, etc.) and guide them through the necessary assistance to fulfill their needs. 

Information about the taxpayer’s entire experience (past and present) will be available to 

every representative of the organization and across all channels in real time. With the 

introduction of an integrated omni channel model, a taxpayer could begin on IRS.gov 

and then shift to click to-call or chat options to engage an assistor without leaving the 

website. With the introduction of AI and robotics, the IRS can help the taxpayer. The 

following are highlights of what will be accomplished with FY 2022 funding: 

• Expand Automated Callback by adding 10 additional applications and provide 

Wait Time Transparency to the taxpayer. Currently, there is callback on 5 

applications, representing 19 percent of total average demand;

• Continue integrating ECM systems towards a 360-degree view of the taxpayer for 

all taxpayer-facing employees;
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• Expand appointment process and system to all taxpayer-facing employees, 

including both service and compliance (currently, taxpayers can only make 

appointments with Taxpayer Assistance Center (TAC) employees);

• Expand and improve routing options and create an escalation process to resolve 

issues outside the scope of the initial contact employee;

• Develop AI-Powered Digital Appointments that will allow the taxpayer to use a 

chatbot to make appointments.

Focused Strategies for Reaching Underserved Communities (+$12,269,000 / +10 FTE)

Bringing together ongoing efforts within the IRS and leveraging its ecosystem of 

partnerships, the IRS will establish a consolidated program to engage with historically 

underserved communities to address issues of communication, education, transparency, 

trust, and limited access to quality products and services. As shown by the Earned 

Income Tax Credit (EITC) Underserved Outreach Project in 2014, developing specific 

strategies for underserved communities is crucial to increasing voluntary compliance. 

The EITC project increased filing rates by adding 53,000 filers and $27 million in 

additional taxes paid. The IRS will develop strategies for each underserved segment 

based on focused research, best practices, and lessons from partners on ways to 

improve interactions within these communities. Immediate benefits to the taxpayer will 

include new assistance in hard-to-reach areas where receiving help is currently difficult, 

convenience via virtual chatroom authentication procedures, and expanded access to

additional information to assist international taxpayers. Aspects of this initiative will rely 

on improving the IRS’s proactive outreach; expanding and strengthening the IRS’s

network of partnerships and leveraging relationships across public, private, and nonprofit sectors. The following are highlights of what will be accomplished with FY 2022 

funding: 

• Establish an organization within the IRS dedicated to developing, overseeing, and 

implementing these strategies with an agency-wide perspective and scope;

• Establish stronger community presence by hiring and training new staff to add 

new professionals in hard-to-reach communities;

• Use a data-driven approach to identifying content for translation to four 

additional languages;

• Increase multi-lingual staffing and better leverage employee multilingual skills;

• Authenticate international online accounts;

• Host virtual chat rooms and live forums for international taxpayers; and

• Expand access to information and services to taxpayers living abroad. 
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Ensure Fairness of the Tax System +$340,267,000 / +1,833 FTE

A successful economy depends on an effective tax collection system. For a tax system to 

operate productively, all citizens must pay their fair share. The IRS must serve taxpayers 

in a manner that facilitates their voluntary compliance by providing proper levels of 

staffing and support at points of significant taxpayer interaction. The IRS will continue to 

deter those who might evade their legal tax obligations and must appropriately pursue 

those who do so through strong, visible, and robust tax enforcement programs.

Increase Large Corporation and Global High Wealth Returns (+$154,870,000 / +668 FTE)

The IRS contends with a wide variety of business organizations operating in the United 

States and abroad with different filing requirements. These organizations include 

businesses, such as sole proprietors, corporations, partnerships, and S-corporations, as 

well as trusts and non-profits. Partnership businesses continue to be the fastest growing 

segment of all tax returns filed. Due to their complexity, these returns represent a 

significant compliance risk. The 2019 IRS Data Book reflects that in FY 2019, partnership 

return filings with the IRS exceeded 4.2 million – more than double the number of 

returns filed by corporations other than S corporations. Publication 6292, Fiscal Year 

Return Projections for the United States: 2020–2027, shows that on average, annual 

partnership filings will continue to outpace 1120s (4.976 million vs. 1.6 million) from 

FY 2021 to FY 2027. 

Another increasing source of compliance risk are high income/high wealth individuals, 

who frequently operate complex enterprises consisting of multiple related entities that 

often have international components. The IRS takes a unified look at the entire web of 

entities controlled by high wealth individuals to better assess the risks of 

noncompliance. This investment will allow the IRS to eventually double its compliance 

Position Type/Other Costs FTE Positions $000

Increase Enforcement Returns 540 1,080 $131,246

Revenue Agent 389 778 102,751

Manager 67.5 135 16,903

Economist 5 10 1,322

Engineer 5 10 1,292

Analyst 6 12 1,238

Support Staff 31.5 63 3,672

Tax Examiner 36 72 4,068

Other Direct Costs 128 256 $23,624

Attorney 21 42 4,757

Support Staff 3 6 290

Appeals Officer 78 156 14,461

Revenue Agent 12 24 2,346

Tax Examiner 14 28 1,770

Total 668 1,336 $154,870
IRS - 16

efforts on partnerships and high wealth returns. The resources sought in this investment 

will also allow the IRS to devote more resources to examining large corporations with 

balance sheet assets > $10 million. Audits on large corporations fell significantly over 

the past decade, falling from an overall audit coverage rate of 16.6 percent in FY 2010 to 

just 6.2 percent in FY 2019. In FY 2010, virtually all corporations with assets over $20 

billion were audited. In FY 2019, only 50 percent were under audit. Finally, this 

investment will allow the IRS to increase its work in the Cross Border and Treaty and 

Transfer Pricing Operations to fully support corporate, partnership and high wealth 

exams.

According to the 2019 IRS Data Book, audits on partnership returns dropped from over 

12,000 audits against 3.4 million returns filed in FY 2010 to 7,500 audits against 4.2 

million partnership returns in FY 2019. The taxation of partners and partnerships is 

governed by Subchapter K of the Internal Revenue Code, which is generally perceived to 

be fairly complex. In addition to a complex legal environment, IRS examiners are 

challenged in auditing partnerships by their tiered structures. Partnerships often have 

other partnerships among their partners creating layers and layers of partnerships that 

must be navigated by an auditor. At least one-quarter of partnerships have some tiering 

in their structures. In addition to a different body of substantive tax law, the Internal 

Revenue Code also mandates a different set of audit procedures for partnerships than 

other taxpayers. These audit procedures can also be complex. 

This investment will allow the IRS to:

• Hire additional revenue agents who will be devoted solely to working partnership 

cases; 

• Increase the number of auditors with specialized knowledge in partnership law 

and audit procedures;

• Double current audit coverage of partnerships within 4 years; and

• Generate additional enforcement revenue of approximately $365.3 million from 

FY 2022-2026. 

This initiative will fund IRS’s Global High Wealth (GHW) program, which uses 

identification models to filter based on estimated net worth in the tens of millions using 

data points including passive vs. non-passive income, interest, dividends, etc. The overall 

audit rate for the identified GHW taxpayer population (which ranges from 40,000-60,000 

taxpayers), is 0.2 percent. GHW uses a unique enterprise approach, which looks at the 

complete financial picture of high wealth individuals and the enterprises they control, 

that has proven successful, rather than the traditional return-by-return approach. GHW 

examiners average roughly $1,300 of recommended adjustments per exam hour on 
IRS - 17

taxable entities, and over $10,000 of recommended adjustments per exam hour on 

partnerships. This investment will more than double the size of GHW, thereby allowing it 

to double the number of examinations it conducts once new employees have completed 

training and become fully productive. The requested investment is projected to result in 

additional enforcement revenue of approximately $794.5 million from FY 2022-2026. 

This initiative will increase passthrough and GHW examinations, by increasing staffing 

for:

• GHW - The requested hires for GHW will allow for the creation of four additional 

GHW territories. Adding the additional agents will allow for an increased audit 

rate for its population, which presents an identified compliance risk.

• Ogden Tax Equity and Fiscal Responsibility Act (TEFRA)/ Bipartisan Budget Act 

(BBA) Unit - The Ogden TEFRA Unit/BBA Unit will handle IRS-wide processing of 

all BBA cases and some non-BBA case processing. The Ogden TEFRA/BBA Unit 

will be responsible for new parts of a partnership audit created by the BBA. These 

new processes are extremely complex and critical to the successful 

implementation of BBA and successful partnership level examinations. In addition 

to handling the processing of the increased partnership audits intended under 

BBA, the Ogden TEFRA/BBA Unit will continue to work remaining TEFRA and nonTEFRA cases for several years due to overlaps in the TEFRA and BBA regimes. The 

requested hires will allow for creation of eight additional groups to handle BBA

inventory. 

• Pass-through Entity (PTE) Practice Networks - The PTE practice networks currently 

support the revenue agents in the field with new and complex issues including 

subchapter K issues, tax reform and BBA. They also play a large role in campaign 

development and execution. As the number of partnership exams is increased, as 

is planned to address this identified compliance risk as intended by the BBA, the 

need for field support by the practice networks will grow. Additional staff is 

needed to grow the practice networks to a size that can effectively support 

increased passthrough examinations. The requested hires will allow for the 

creation of six additional practice network groups.

• Geographic Practice Areas - Passthrough exams that are not part of the GHW 

program are conducted by revenue agents in three geographic practice areas. To

significantly increase the number of passthrough examinations, additional 

geographic revenue agents are needed. The proposed hires would allow for 

creation of four new teams in each of the three geographic practice areas. 

Resources are requested for technical services positions and to support the new 
IRS - 18

workload generated by the new hires, who will process the highly technical cases 

and prepare the statutory notices generated by the closures.

Other Direct Costs (+$23,624,000 / +128 FTE)

Expand Cyber Crimes and Applied Data Analytics Efforts (+$41,095,000 / +98 FTE)

Data sets and data science methodologies now exist to connect the most remote 

financial transaction between apparent disparate actors which can be the key piece of 

evidence to break open the most complex financial investigation. These techniques are 

integral to the work of the IRS’s Criminal Investigation Division (CI) and criminal case 

development.

This investment will be used to: 

• Establish a Criminal Data Team to identify existing and new data sources; 

• Hire inventory data and categorize its use; 

IRS Activity Cost FTE Explanation

Appeals 18,577 104

The initiative will generate additional work for Appeals Team Case Leader (ATCL) in the 

Compliance Integration CIC workstream, the GHW arena and the Partnership arena. For 

Appeals to provide a high level of customer service and appropriately resolve these cases 

Appeals will require an additional positions.

Chief Counsel 5,047 24

The initiative staffing request is projected to increase the number of audits for the GHW, PTE 

and Large Corporate Compliance (LCC) programs. In order to support this investment, Counsel 

is requesting 48 additional positions. The additional staffing will provide a mix of attorneys in 

the LB&I Division Counsel to provide legal advice to the client and handle the additional trial 

cases generated by the expansion of these programs, additional subject matter experts in the 

Technical Associate Offices, and accompanying legal support. The number and mix of 

requested positions is based on the complexity and estimated increase in workload.

Total $23,624 128

Dollars in MillionsPosition Type/Other Costs FTE Positions $000

Cyber Crimes and Data Analytics 93 186 $40,013

Special Agent 42 84 29,449

Analyst 41 82 5,244

IT Specialist 10 20 1,452

Contractual Services 3,868

Other Direct Costs 5 10 $1,082

Attorney 4 8 992

Support Staff 1 2 90

Total 98 196 $41,095
IRS - 19

• Perform validation as needed; 

• Allow CI to intake, interrogate, mine and operationalize its available data 

appropriately; and 

• Align leading data practices in the private sector and other innovation 

opportunities.

Currently, the data created/received through investigations, received from law 

enforcement partners, and received through disclosures and referrals is not categorized 

or stored in an accessible location. As a result, CI’s ability to use that data for analytics 

and enforcement operations is very limited. New data sources, including open source 

and data held by other agencies, are identified almost daily and in most cases is 

currently not obtained or mined for its potential. A CI Data Team responsible for all CI 

data activities will make data intake and processing routine to enable effortless 

integration into CI’s most complex investigations and ultimately advance CI’s ability to 

enforce tax compliance.

CI is authorized to use a wide array of investigative techniques, including developing 

innovative approaches to investigations using existing data sets, commercial 

(purchased) data sets, data sets from other government agencies, and open source data 

sets. Purchase and ingestion of this data into a modern computing environment 

available to CI users requires funding. Additionally, CI partners with internal and external 

stakeholders to use robust advanced modeling and data-driven algorithms to deliver 

high impact investigations which either preempt or quickly address emerging threats 

and advance the mission of the IRS. A portion of these activities will require contractor 

funding for lead generation and case development using these modern techniques. 

In FY 2020, CI’s new National Analytics team within CI’s Applied Analytics section worked 

with 9 Field and HQ offices on pilot projects to test the efficacy of advanced analytical 

modeling in case development and field office investigations. As a result, the need for 

analytical services across the field offices to pursue criminal tax enforcement far 

outpaced CI’s Applied Analytics capacity. This initiative will hire and train an additional 

82 analysts (investigative analysts and data scientists) to work across the field offices on 

larger initiatives using advanced statistical modeling and machine learning techniques 

to identify criminals, criminal patterns, and illicit behaviors. CI’s Applied Analytics would 

stand up two or more teams to work with CI’s investigative offices. With this initiative, CI 

will develop and train Field Office and Headquarters personnel in the tools/technology 

and the methodologies used to grow overall cyber and analytical capabilities. CI will also 

bring advanced modeling initiatives to maturity and provide more opportunities for 

innovation. In addition, funding will allow the IRS to advance IT technology to assist in 

the efforts of investigating cybercrimes.
IRS - 20

CI continues to advance the level and degree of work performed in cybercrimes, 

whether it pertains to the investigation of dark web marketplaces, cryptocurrencyrelated fraud, or a host of other internet-based activities. The Cyber Support Unit will 

allow the IRS to provide a specialized skillset of capabilities around open source 

intelligence, dark web research and cryptocurrency tracing aspects in support of 

ongoing investigations in the field. 

CI traces money all around the world, whether transmitted within the shadows of the 

dark web or otherwise. An example of CI’s ability to detect criminal activity involved a 

darknet-based Bitcoin Mixing Service. This major case investigated a darknet search 

engine and money laundering service that was integrated into major darknet markets 

such as AlphaBay, Silk Road II, Abraxxas, and many others. It worked by tumbling 

bitcoins from users and vendors on darknet markets with new, “clean” bitcoin to 

obfuscate the illicit source of the bitcoin. Approximately 356,000 bitcoins moved 

through the site, with a value of over $300 million at the time of the transactions. Data 

obtained from these servers will assist investigations all around the world, since 

criminals use tumblers to obfuscate the crypto trail. Evidence obtained from this 

investigation will serve as the missing link or puzzle piece in many sophisticated bitcoin 

transaction investigations.

Cyber Agents will be working the most complex cyber investigations within CI and 

afforded the necessary access to specialized tools and resources needed to prosecute 

this level of criminals. IRS will use these funds to stand-up and equip the Advanced 

Collaboration and Data Center (ACDC), including 84 Special Agents, tools, technology, 

and capabilities in one physical location. This new center will be able to complete 

approximately 300 additional criminal investigations from FY 2022 to FY 2026.

Other Direct Costs (+$1,082,000 / +5 FTE)

These funds will be used to hire an additional attorney foreach of the six Criminal Tax 

geographic areas; two attorneys in the national Office; two administrative support 

positions; and one cyber-focused administrative position. These positions will provide 

critical mission support to the cybercrime and data analytics efforts.

IRS Activity Cost FTE Positions Explanation

Chief Counsel 1,082 5 10 

Support case agents investigating cybercrimes or cyberenabled investigations (including crypto currency) and

render advice to CCUs thereby reducing the tax gap in 

this area.

Total $1,082 5 10 
IRS - 21

Strengthen Taxpayer Confidence in the Tax-Exempt Sector (+$13,473,000 / +84 FTE)

The IRS strives to support taxpayer needs in the tax-exempt sector. There are over 1.8 

million exempt organizations which are estimated to have over $2.9 trillion in revenue. 

In addition, there are 130 million retirement plan participants with $8 trillion in 

retirement assets. 

Taxpayer confidence in the tax-exempt sector is essential to preserving and protecting 

charitable tax deductions and the retirement savings of everyday Americans. The IRS 

proposes a multifaceted approach to increase taxpayer confidence and ultimately 

protect these taxpayer investments to include:

• Protect Retirement Plans: Conduct enforcement activities to identify compliance 

issues with sponsored retirement plans and assist small businesses with their 

regulatory requirements to maintain their tax preferred status. These activities 

ultimately protect their employees’ retirement plan contributions. 

• Address Unrelated Business Income Tax (UBIT): Assess unpaid taxes for taxable 

activities in the exempt organization sector through face-to-face and remote 

enforcement activities. Overall, these activities will result in increased compliance 

and help preserve the public’s confidence in their charitable donations. 

• Fraud Prevention: Support expanded fraud enforcement activities. While most 

stakeholders and taxpayers in the tax-exempt sector strive to remain compliant, 

there are purposeful bad actors engaging in increasingly complex transactions 

and structures to avoid taxation and even mask other illegal activities. These 

resources will be applied to directly address these emerging fraudulent activities 

and trends in the tax-exempt sector. 

Position Type/Other Costs FTE Positions $000

Protect Retirement Plans 34.5 69 $5,527

Revenue Agent 30 60 4,860

Manager 3 6 456

Support Staff 1.5 3 211

Protect Tax-Exempt Sectors and Government Entities 34.5 69 $5,526

Revenue Agent 30 60 4,860

Manager 3 6 456

Support Staff 1.50 3 210

Fraud Prevention 15 30 $2,420

Revenue Agent 14 28 2,268

Manager 1 2 152

Total 84 168 $13,473
IRS - 22

Once these staffing resources are fully trained, the IRS will be able to conduct an 

additional 3,192 closures related to enforcement activities. As a result, the public’s 

confidence will be strengthened as retirement plans become more compliant, unrelated 

business income taxes are addressed, and fraud is prevented in these important taxexempt arenas. 

Increase Pre-Refund Audit and Examination (+$32,895,000 / +332 FTE)

The Correspondence Examination program addresses the tax gap through increased 

enforcement individual reporting compliance, such as refundable credits. The additional 

staffing will be used to reverse and prevent a decline in the audit coverage rate.

Enhance Enforcement Efforts (+$77,065,000 / +589 FTE)

This initiative requests additional employees to increase efforts in critical Examination 

and Collection activities. The decline in staffing since FY 2010 has led to a decrease in 

the individual audit coverage rate from 1.0 percent in Tax Year 2010 to 0.43 percent in 

Tax Year 2017, which increases the risk to the integrity of the nation’s voluntary tax 

Position Type/Other Costs FTE Positions $000

Increase Pre-Refund Audit & Exam

Tax Examiner 332 332 29,256

Contractual Services 3,639

Total 332 332 $32,895

Position Type/Other Costs FTE Positions $000

Collection Programs 252.5 505 $29,574

Revenue Officer 85 170 13,379

Customer Service Representative 85 170 8,568

Tax Examiner 79.5 159 7,329

Support Staff 3 6 298

Examination Programs 249.5 499 $32,740

Revenue Agent 132 264 21,627

Tax Examiner 113.5 227 10,733

Support Staff 4 8 380

Office of Fraud Enforcement 7 14 $984

Revenue Agent 7 14 984

Other Direct Costs 80 160 $13,767

Revenue Agent 14 28 2,882

Appeals Officer 21 42 3,893

Attorney 26 52 5,125

Analyst 19 38 1,867

Total 589 1,178 $77,065
IRS - 23

compliance system. The collection coverage rate, which is defined as the volume of 

collection work disposed compared to the volume of collection work available, has also 

seen a decline, dropping from 50.1 percent in FY 2010 to just 34.9 percent in FY 2020. 

These trends, if they continue unabated, will lead to an increased risk in tax reporting or 

failure to file required tax returns. The additional resources will fund compliance 

priorities and allow for earlier case assignments and resolution. 

Examination programs will provide increased emphasis on audits of small corporations 

and sole proprietors with business income. Collection programs will focus their efforts 

on high income non-filers and delinquent employment taxes. These resources will:

• Increase the number of audits 

and close more than 4,669 field 

examination cases and 40,610 

correspondence examination 

cases;

• Expand programs that address 

non-filing and underpayment of 

taxes to handle 9,100 additional 

collection cases;

• Address an additional

113,400 Automated Collection 

System (ACS) cases;

• Expand several Compliance 

Services Collection Operations 

programs that address non-filing 

of taxes through the notice process by 159,000 notice dispositions and cases; and

• Strengthen ties between the civil and criminal enforcement arms of the IRS and 

with other federal departments and agencies to facilitate civil enforcement action 

in all situations.

Major Activities Projected

Revenue ($M) Projected Closures

Field Collection 175.7 9,123 

Automated Collection System 418.4 113,401 

Compliance Services Collection Operation/Non-Filer 60.3 159,030 

Field Examination 132.6 4,669 

Correspondence Examination 212.0 40,610 

Document Matching 303.3 200,574 

Total $1,302.3 286,223 
IRS - 24

Other Direct Costs (+$13,767,000 / +80 FTE)

Expand Tax Compliance (+$20,869,000 / +62 FTE)

This investment will enhance overall enforcement efforts, increase the number of

convictions, and expand the IRS’s capabilities in core tax enforcement areas. An 

additional 300 investigations will be completed after the new agents reach full potential. 

This investment will support IRS Strategic Goals by enforcing domestic and international 

compliance across all program areas while utilizing innovative approaches and 

strengthening existing expertise. Further, this investment will support initiatives 

designed to identify trends, detect high-risk areas of noncompliance, and prioritize 

enforcement approaches by applying advanced analytics.

These resources will also allow the IRS to increase its participation in multi-agency task 

forces dedicated to tax administration, which will:

• Enhance cooperation with state and local law enforcement agencies in 

jurisdictions where prosecutorial actions would have the greatest influence; 

• Obtain information about ongoing criminal activity involving federal and state tax 

refunds allowing expedited prosecution by the Department of Justice to reduce 

the financial loss to the IRS and the taxpayer; and 

IRS Activity Cost FTE Positions Explanation

Appeals 6,630 35 70 Support Collection efforts and appropriately resolve these cases while providing a high 

level of customer service. 

Chief Counsel 5,125 26 52 Provide support for increases in requests for legal advice, litigation assistance, and 

collection due process.

SB/SE Operations Support 824 6 12 Support hiring, training, human capital, technology needs, data analytics and resource 

requirements for the Business Unit.

Privacy, Governmental 

Liaison, and Disclosure 916 11.5 23 Address the increase in Freedom of Information Act requests as a result of increased compliance activity.

Human Capital Office 272 1.5 13

Handle the increase in front-line positions and the expectation that new managerial 

positions will be created. Labor Relations support begins in the first year and continues 

throughout a manager's career, as needed. 

Total $13,767 80 170

Dollars in thousands

Position Type/Other Costs FTE Positions $000

Expand Tax Compliance

Special Agent 48 96 $19,027

Analyst 8 16 $1,023

IT Specialist 6 12 $819

Total 62 124 $20,869
IRS - 25

• Target larger-scale crime rings for maximum compliance results and publicity. 

These resources will also support special agents conducting outreach to state and local 

law enforcement to expand the Law Enforcement Assistance Program. In addition, 

special agents will extend outreach efforts to practitioners from filing season only to 

year-round to provide information and address return preparer concerns.

This investment also will provide analysts to support this investment by gathering data 

to identify violations of tax and other financial laws and regulations. They will provide 

analysis of this information, capturing the full scope of the identified questionable 

activities and provide hands-on support to the criminal investigation. They will develop 

queries to obtain the necessary information and to perform an assessment of the 

responses to discern the interrelationships to determine impact and possible 

ramifications of the tax-related criminal and financial activities. 
IRS - 26

Improve Live Assistance +$318,000,000 / +4,203 FTE

Increase Telephone Level of Service & Reduce Correspondence Inventory

(+$286,640,000 / +3,853 FTE)

This investment will allow the IRS to increase the telephone level of service (LOS) and 

significantly reduce the correspondence inventory. The IRS toll-free telephone customer 

service operation is a key part of the IRS’s service delivery. This investment provides a 

projected LOS of 75 percent in FY 2022, assuming phone demand returns to prepandemic levels and the IRS can provide in-person services at pre-pandemic levels. 

These funds will also be used to reduce the current projected FY 2022 ending 

correspondence inventory by about 400,000. The FY 2022 projection is down from a 

projected FY 2021 ending correspondence level of about 1.4 million. Providing quality 

taxpayer service is crucial to ensuring voluntary compliance.

TAC Optimization Strategy (+$31,360,000 / +350 FTE)

This investment funds staffing increases to achieve optimal staffing levels for IRS 

Taxpayer Assistance Centers (TACs), improving the taxpayer experience. These staffing 

levels will allow the IRS to re-open TACs and restore office hours, allowing taxpayers to 

schedule appointments sooner. With increased TAC funding, the IRS anticipates 

additional contacts with over 880,000 taxpayers.

Position Type/Other Costs FTE Positions $000

Improve Level of Service 3,606 2,715 $265,465

Seasonal 2,297 1,406 162,582

Customer Service Representative 1,226 1,226 97,222

Manager 83 83 5,661

Reduce Correspondence Inventory 247 247 $21,175

Customer Service Representative 227 227 19,811

Manager 20 20 1,364

Total 3,853 2,962 $286,640

Position Type/Other Costs FTE Positions $000

Taxpayer Assistance Centers (TAC)

Accounts Management Representative 350 350 29,225

Contractual Services 2,135

Total 350 350 $31,360
IRS - 27

IRS Integrated Modernization Business Plan +$78,143,000 / +18 FTE

The Integrated Modernization Business Plan is a key IRS priority. The plan provides a 

roadmap for improving IRS systems and taxpayer services. Additionally, the plan will 

enable the IRS to provide quality customer service to taxpayers and deliver long-term 

budget efficiencies as the IRS modernizes capabilities currently provided via legacy 

applications. The budget requests an increase of $78 million for a total appropriated 

budget of $305 million in FY 2022.

The request funds:

• Web Applications ($30 million): The IRS will expand the capability for taxpayers to 

use an online account, building on current capabilities to create and submit 

online installment agreements and make payments. In addition, it will expand the 

Tax Pro effort benefiting authorized tax professionals with capabilities that 

modernize certain paper-based processes to help resolve issues with the IRS on 

behalf of their clients. In FY 2022, the IRS will begin expanding the Tax Pro 

capabilities to include the ability to view/manage new and pending authorization 

requests, view/print confirmations of submission, and expiration of out-of-date 

authorizations. These capabilities will reduce the amount of paper forms, reduce 

taxpayer and tax professional burden, reduce the time it takes to submit 

authorizations, and increase data accuracy and security to ensure the entire 

process is secure in confirming and protecting identity. 

• Taxpayer Digital Communications Outbound Notification ($10 million): The IRS 

will continue developing digital notices available through a secure online account 

for taxpayers who prefer that channel over mailed correspondence. In addition, 

the IRS will allow taxpayers the choice to opt in or opt out of receiving paper 

notices and receive notifications through email or text message. This investment

will increase taxpayer response rates to notices, reduce burden on taxpayers and 

the IRS, reduce printing and postage requirements, and promote more efficient 

interactions. 

• Live Assistance ($15 million): The investment funds the Live Assistance program 

to expand customer callback capabilities, allowing taxpayers to keep their place 

Position Type/Other Costs FTE Positions $000

Integrated Modernization Business Plan

IT Specialist 17.5 35 1,270

Contractual Services 65,045

Hardware and Software 11,828

Total 17.5 35 $78,143
IRS - 28

in queue without remaining on the phone, and the Live Chat capability that 

allows taxpayers to interact with assistors in a web-based chat session. The IRS 

will also deploy machine learning and natural language processing to quickly 

answer common taxpayer inquiries and improve call routing to deliver expert 

service to customers and empower taxpayers with real-time responses.

• Customer Account Data Engine 2 (CADE2) ($105 million): Since the Individual 

Master File (IMF) was built almost 60 years ago, the IRS has changed legacy base 

code to reflect annual tax law changes. As a result, the base code of IMF includes 

embedded business logic written in outdated programming languages that only 

an extremely small number of IRS personnel understand. The Individual Tax 

Processing Engine (ITPE) is a critical project which converts approximately 

200,000 lines of legacy assembly language code to modern software language. 

This code conversion is a major milestone towards retiring the Individual Master 

File (IMF). In FY 2022, funding will be used to continue the ITPE project and code 

conversion. Upon conclusion, this will reduce the burden of ongoing 

maintenance and routine updates due to tax law changes through a common 

data model. It will enable enhanced data accessibility both within the IRS and for 

taxpayers, and security controls. CADE 2 will support advanced analytical 

capabilities addressing key issues of compliance, fraud, and identity theft. These 

funds will also be used to start:

o The CADE 2 Target State which provide state-of-the-art individual taxpayer 

account processing and data-centric technologies for maintaining and 

balancing individual taxpayer account data to reduce operations and

maintenance costs, improve taxpayer service quality, enhance 

responsiveness to legislative changes, and eliminate financial weaknesses. 

The program will allow the IRS to retire the most complex portion of the 

Individual Master File (IMF), a step towards fully retiring the IMF.

• Enterprise Case Management (ECM) ($64 million): ECM provides the IRS with an 

enterprise solution for streamlining case and workload management processes to 

improve the quality and effectiveness of case interactions with individual 

taxpayers, small and large businesses, tax-exempt organizations, and a wide 

spectrum of intermediaries. ECM will digitize case information, provide business 

automation, and increase resource alignment across IRS business units to 

improve customer service and reduce the timeframe for case resolution. In FY 

2020 and FY 2021, initial releases delivered the foundational platform and

capabilities of a new cloud-based case management solution. Subsequent ECM 

releases will provide integrated case management across the IRS. In FY 2022, ECM 
IRS - 29

will include the data integration with individual taxpayer account data needed for 

several business processes. These capabilities will enable the program to scale 

and migrate additional business processes concurrently in the Release 4 

timeframe.

• NextGen Infrastructure (NGI) ($15 million): This investment will allow the IRS to 

continue modernizing its infrastructure base (hardware, software, network 

resources, and services) and support agile software development and delivery 

practices.

• Vulnerability and Threat Management ($20 million): This investment will enable 

the IRS to improve security integration in system development and automate 

security testing, apply use cases to enhance security audit analytics and 

compliance, and enhance data protection through encryption.

• Identity and Access Management ($19 million): This investment in user identity 

controls, privileged access protections, building access security, and software 

security configuration will help the IRS mitigate the risk of unauthorized access to 

tax data as the IRS delivers new online tools to taxpayers and the number of 

private sector data breaches increases.

• Security Operations and Management ($12 million): This investment will deliver a 

next generation secure operations center, improved incident analysis and forensic 

network investigation, and protect High Value Assets by blocking network access 

for unauthorized users.

• Architecture, Integration, and Management ($15 million): This investment 

provides engineering management capabilities essential to delivering a large, 

complex modernization program. It also delivers IRS systems strategy, 

architecture, and engineering capabilities for the major modernization projects 

across all technology platforms; IT Infrastructure, Business Applications, Data 

Management, and IT Security. The AIM program translates enterprise and project 

objectives into targeted, actionable investments to provide the framework and 

direction for cohesive, successful modernization.
IRS - 30

Electric Vehicles and Associated Infrastructure +$2,966,000 / +0 FTE

Following the lead from Executive Order (E.O.) 14008, “Tackling the Climate Crises at 

Home and Abroad”, the U.S. Department of the Treasury joins in the Administration’s 

priority to develop a comprehensive plan to create good jobs and stimulate clean 

energy industries by revitalizing the Federal Government’s sustainability efforts. This 

includes Treasury’s commitment to use all available procurement authorities to augment 

its Departmentwide fleet management program with a continued focus on the leasing

of electric vehicles (EV) and purchasing, installing, and maintaining essential 

infrastructure. The planned resources will help Treasury comply with the requirements 

set forth by E.O. 14008 and reduce the carbon footprint of emissions into the 

atmosphere by acquiring an updated fleet of zero-emissions vehicles that can support 

mission operations.

• For FY 2022, the IRS-CI will receive $2,576,000 to fund the initial investment of its 

fleet to EV. Of that money, a to be determined amount will be allocated to the 

purchase, installation, maintenance, and/or upgrade of infrastructure required to 

maintain an EV fleet management program. Currently, IRS-CI has a total of 2,294 

vehicles in its fleet, of which zero are EVs. 

• For FY 2022, the Facilities Management and Security Services (IRS-FMSS) will 

receive $390,000 to fund the initial investment of its fleet to EV. Of that money, a 

to be determined amount will be allocated to the purchase, installation, 

maintenance, and/or upgrade of infrastructure required to maintain an EV fleet 

management program. Currently, IRS-FMSS has a total of 246 vehicles in its fleet, 

of which zero are EVs. 

Position Type/Other Costs FTE Positions $000

Electric Vehicles and Associated 

Infrastructure

Contractual Services 2,966

Total $2,966
IRS - 31

1.3 – Object Classification (Schedule O) Obligations

Dollars in thousands

Internal Revenue Service

Object Classification

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

11.1 Full-Time Permanent Positions 6,107,285 6,106,908 6,650,828

11.3 Other than Full-Time Permanent Positions 85,443 86,007 88,934

11.5 Other Personnel Compensation 208,386 301,867 323,250

11.8 Special Personal Services Payments 20,646 29,681 30,358

11.9 Personnel Compensation (Total) 6,421,760 6,524,463 7,093,370

12.1 Personnel Benefits 2,328,557 2,400,622 2,651,834

13.0 Benefits to Former Personnel 28,280 20,240 20,701

Total Personnel and Compensation Benefits $8,778,597 $8,945,325 $9,765,905

21.0 Travel 123,645 69,038 119,661

22.0 Transportation of Things 23,786 23,287 34,776

23.1 Rental Payments to GSA 590,109 579,736 602,332

23.2 Rent Payments to Others 12,161 7,196 7,450

23.3 Communications, Utilities, & Misc 320,953 317,042 355,711

24.0 Printing & Reproduction 32,597 32,307 34,005

25.1 Advisory & Assistance Services 745,831 1,021,158 1,109,192

25.2 Other Services 102,366 89,204 120,456

25.3 Purchase of Goods & Services from Govt. Accounts 144,519 155,815 174,617

25.4 Operation & Maintenance of Facilities 186,183 199,042 215,473

25.5 Research & Development Contracts

25.6 Medical Care 14,275 15,098 17,068

25.7 Operation & Maintenance of Equipment 64,025 70,123 83,295

25.8 Subsistence & Support of Persons

26.0 Supplies and Materials 31,521 32,281 38,460

31.0 Equipment 247,204 269,122 365,756

32.0 Land and Structures 37,633 32,645 50,778

33.0 Investments & Loans

41.0 Grants, Subsidies 48,000 54,000 54,960

42.0 Insurance Claims & Indemnities 2,149 2,135 2,448

43.0 Interest and Dividends

44.0 Refunds

91.0 Unvouchered 4,500 4,500 4,583

Total Non-Personnel $2,731,457 $2,973,729 $3,391,021

New Appropriated Resources $11,510,054 $11,919,054 $13,156,926

Appropriations:

Taxpayer Services 2,535,554 2,587,606 2,940,876

Enforcement 4,909,500 5,004,622 5,462,823

Operations Support 3,885,000 4,104,102 4,448,195

Business Systems Modernization 180,000 222,724 305,032

New Appropriated Resources $11,510,054 $11,919,054 $13,156,926

FTE 74,726 73,409 79,348

See footnotes in 1.1 -- Appropriations Detail Table

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million 

under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated 

Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million 

Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.
IRS - 32

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

TAXPAYER SERVICES

For necessary expenses of the Internal Revenue 

Service to provide taxpayer services, including 

pre-filing assistance and education, filing and 

account services, taxpayer advocacy services, 

and other services as authorized by 5 U.S.C. 

3109, at such rates as may be determined by 

the Commissioner, [$2,555,606,000]

$2,940,876,000, of which not less than 

$11,000,000 shall be for the Tax Counseling

for the Elderly Program, of which not less than 

13,000,000 shall be available for low-income 

taxpayer clinic grants, of which not less than 

$30,000,000, to remain available until 

September 30, [2022] 2023, shall be available 

for the Community Volunteer Income Tax 

Assistance Matching Grants Program for tax 

return preparation assistance, and of which not 

less than $211,000,000 shall be available for

operating expenses of the Taxpayer Advocate 

Service: Provided, That of the amounts made 

available for the Taxpayer Advocate Service, 

not less than $5,500,000 shall be for identity 

theft and refund fraud casework. (Department 

of the Treasury Appropriations Act, 2022.)

ENFORCEMENT

For necessary expenses for tax enforcement 

activities of the Internal Revenue Service to 

determine and collect owed taxes, to provide 

legal and litigation support, to conduct 

criminal investigations, to enforce criminal 

statutes related to violations of internal 

revenue laws and other financial crimes, to 

purchase and hire passenger motor vehicles 

Language required for the proposed 

program integrity allocation

adjustment. More information about 

the allocation adjustment can be 

found in section 4.1 –

Appropriations Detail Table with 

Program Integrity Allocation

Adjustment of the Appendix.
IRS - 33

(31 U.S.C. 1343(b)), and to provide other 

services as authorized by 5 U.S.C. 3109, at such 

rates as may be determined by the 

Commissioner, [$5,212,622,000] 

$5,462,823,000, of which not to exceed 

$250,000,000 shall remain available until 

September 30, [2022] 2023; of which not less 

than $60,257,000 shall be for the Interagency 

Crime and Drug Enforcement program; and of 

which

not to exceed [$15,000,000] $21,000,000 shall 

be for investigative technology for the Criminal 

Investigation Division: Provided, That the 

amount made available

for investigative technology for the Criminal 

Investigation Division shall be in addition to 

amounts made available for the Criminal 

Investigation Division under the "Operations 

Support" heading.

In addition, $287,452,000, for an additional 

amount to meet the terms of a concurrent 

resolution on the budget for tax enforcement 

activities under this heading,

including tax compliance to address the 

Federal tax gap: Provided, That such additional 

amounts may not be transferred or 

reprogrammed for any other activity.

(Department of the Treasury Appropriations 

Act, 2022.)

OPERATIONS SUPPORT

For necessary expenses of the Internal Revenue 

Service to support taxpayer services and 

enforcement programs, including rent 

payments; facilities services; printing; postage; 

physical security; headquarters and other IRSwide administration activities; research and 

statistics of income; telecommunications; 
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information technology development, 

enhancement, operations, maintenance, and 

security; the hire of passenger motor vehicles 

(31 U.S.C. 1343(b)); the operations of the 

Internal Revenue Service Oversight Board; and 

other services as authorized by 5

U.S.C. 3109, at such rates as may be 

determined by the Commissioner;

[$3,928,102,000] $4,448,195,000, of which not 

to exceed $275,000,000 shall remain available 

until September 30, [2022] 2023; of which not 

to exceed $10,000,000 shall remain available 

until expended for acquisition of equipment 

and construction, repair and renovation of 

facilities; of which not to exceed $1,000,000 

shall remain available until September 30, 

[2023] 2024, for research; of which not less 

than $10,000,000, to remain available until 

expended, shall be available for establishment 

of an application through which entities 

registering and renewing registrations in the 

System for Award Management may request 

an authenticated electronic certification stating 

that the entity does or does not have a 

seriously delinquent tax debt; and of which not 

to exceed $20,000 shall be for official reception

and representation expenses: Provided, That 

not later than 30 days after the end of each 

quarter, the Internal Revenue Service shall 

submit a report to the Committees on 

Appropriations of the House of 

Representatives and the Senate and the

Comptroller General of the United States 

detailing major information technology

investments in the Internal Revenue Service 

Integrated Modernization Business Plan 

portfolio, including detailed, plain language 

summaries on the status of plans, costs, and 

results; prior results and actual expenditures of 

the prior quarter; upcoming deliverables and 
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costs for the fiscal year; risks and mitigation 

strategies associated with ongoing work; 

reasons for any cost or schedule variances; and 

total

expenditures by fiscal year: Provided further, 

That the Internal Revenue Service shall include, 

in its budget justification for fiscal year [2022] 

2023, a summary

of cost and schedule performance information 

for its major information technology systems.

In addition, $129,445,000, for an additional 

amount to meet the terms of a concurrent 

resolution on the budget for tax enforcement 

activities under this heading,

including tax compliance to address the 

Federal tax gap: Provided, That such additional 

amounts may not be transferred or 

reprogrammed for any other activity.

(Department of the Treasury Appropriations 

Act, 2022.)

BUSINESS SYSTEMS MODERNIZATION

For necessary expenses of the Internal Revenue 

Service's business systems modernization 

program, [$222,724,000] $305,032,000, to 

remain available until September 30, [2023] 

2024, for the capital asset acquisition of 

information technology systems, including 

management and related contractual costs of 

said acquisitions, including related Internal 

Revenue Service labor costs, and contractual

costs associated with operations authorized by 

5 U.S.C. 3109: Provided, That not later than 30 

days after the end of each quarter, the Internal 

Revenue Service shall submit a report to the 

Committees on Appropriations of the House of 

Representatives and the Senate and the 

Comptroller General of the United States 
IRS - 36

detailing major information technology 

investments in the Internal Revenue Service

Integrated Modernization Business Plan 

portfolio, including detailed, plain language 

summaries on the status of plans, costs, and 

results; prior results and actual

expenditures of the prior quarter; upcoming 

deliverables and costs for the fiscal year; risks 

and mitigation strategies associated with 

ongoing work; reasons for any cost or 

schedule variances; and total expenditures by 

fiscal year. 

(Department of the Treasury Appropriations 

Act, 2022.)

ADMINISTRATIVE PROVISIONS-INTERNAL 

REVENUE SERVICE (INCLUDING TRANSFER OF 

FUNDS)

SEC. 101. Not to exceed 4 percent of the 

appropriation made available in this Act to the 

Internal Revenue Service under the 

"Enforcement" heading, and not to exceed

5 percent of any other appropriation made 

available in this Act to the Internal Revenue 

Service, may be transferred to any other 

Internal Revenue Service appropriation upon 

[the] advance [approval of]notice to the 

Committees on Appropriations of the House of 

Representatives and the Senate.

SEC. 102. The Internal Revenue Service shall 

maintain an employee training program, which 

shall include the following topics: taxpayers' 

rights, dealing courteously with taxpayers, 

cross-cultural relations, ethics, and the 

impartial application of tax law.
IRS - 37

SEC. 103. The Internal Revenue Service shall 

institute and enforce policies and procedures 

that will safeguard the confidentiality of 

taxpayer information and protect taxpayers 

against identity theft.

SEC. 104. Funds made available by this or any 

other Act to the Internal Revenue Service shall 

be available for improved facilities and 

increased staffing to provide

sufficient and effective 1–800 help line service 

for taxpayers. The Commissioner shall continue 

to make improvements to the Internal Revenue 

Service 1–800 help

line service a priority and allocate resources 

necessary to enhance the response time to 

taxpayer communications, particularly with 

regard to victims of tax-related crimes.

SEC. 105. The Internal Revenue Service shall 

issue a notice of confirmation of any address 

change relating to an employer making 

employment tax payments, and such notice 

shall be sent to both the employer's former 

and new address and an officer or employee of 

the Internal Revenue Service shall give special 

consideration to an offer-in-compromise from 

a taxpayer who has been the victim of fraud by 

a third party payroll tax preparer.

SEC. 106. None of the funds made available 

under this Act may be used by the Internal 

Revenue Service to target citizens of the 

United States for exercising any

right guaranteed under the First Amendment 

to the Constitution of the United States.

SEC. 107. None of the funds made available in 

this Act may be used by the Internal Revenue 
IRS - 38

Service to target groups for regulatory scrutiny 

based on their ideological

beliefs.

SEC. 108. None of funds made available by this 

Act to the Internal Revenue Service shall be 

obligated or expended on conferences that do 

not adhere to the procedures,

verification processes, documentation 

requirements, and policies issued by the Chief 

Financial Officer, Human Capital Office, and 

Agency-Wide Shared Services as a result of the 

recommendations in the report published on 

May 31, 2013, by the Treasury Inspector 

General for Tax Administration entitled 

"Review of the August 2010 Small 

Business/Self-Employed Division's Conference 

in Anaheim, California" (Reference Number 

2013–10–037).

SEC. 109. None of the funds made available in 

this Act to the Internal Revenue Service may be 

obligated or expended—

(1) to make a payment to any employee under 

a bonus, award, or recognition program; or

(2) under any hiring or personnel selection 

process with respect to re-hiring a former 

employee; unless such program or process 

takes into account the conduct and Federal tax

compliance of such employee or former 

employee.

SEC. 110. None of the funds made available by 

this Act may be used in contravention of 

section 6103 of the Internal Revenue Code of 

1986 (relating to confidentiality

and disclosure of returns and return 

information).
IRS - 39

SEC. 111. Notwithstanding any Congressional 

notification requirements for a reprogramming 

of funds in this Act, funds provided in this Act 

for the Internal Revenue Service shall be 

available for obligation and expenditure 

through a reprogramming of funds that 

augments or reduces existing programs, 

projects, or activities by up to $10,000,000 

without prior Congressional notification of 

such action.

SEC. 112. There is hereby established the 

Internal Revenue Service Working Capital Fund 

(Fund), which shall be available without fiscal 

year limitation, for expenses necessary for 

facility services, technology, and other 

centralized services that the Commissioner of 

Internal Revenue, subject to prior notice to the 

Office of Management and Budget, deems 

appropriate and advantageous to provide on a

reimbursable basis: Provided, That amounts 

deposited in the Fund shall be in

addition to funds otherwise available for such 

purposes, and shall remain available until 

expended: Provided further, That the Fund may 

receive advances and reimbursements from 

funds available to the business units and 

offices of the Internal Revenue Service for 

which such centralized services are performed 

at rates which

will return in full all expenses of operation: 

Provided further, That unobligated balances of 

expired amounts appropriated or otherwise 

made available for this or

any succeeding fiscal year to the Internal 

Revenue Service may be transferred and

merged into the Fund no later than the end of 

the fifth fiscal year after the last fiscal year for 

which such funds are available for the 

purposes for which appropriated: Provided 
IRS - 40

further, That no funds may be transferred 

pursuant to the previous proviso unless 

advance notification is provided to the 

Committees on Appropriations of the House of 

Representatives and the Senate.

(Department of the Treasury Appropriations 

Act, 2022.)
IRS - 41

E – Legislative Proposals

Increase Oversight of Paid Tax Return Preparers

The proposal would amend Title 31, U.S. Code (Money and Finance) to provide the 

Secretary with explicit authority to regulate all paid preparers of Federal tax returns, 

including by establishing mandatory minimum competency standards.

The proposal would be effective on the date of enactment.

Increase penalties on ghost preparers

The proposal would increase the penalty amount to the greater of $500 per return or 

100 percent of the income derived per return by a ghost preparer. The proposal would 

also increase the limitations period during which the penalty may be assessed from 

three years to six years.

The proposal would be effective for returns required to be filed after December 31, 

2021.

Introduce Comprehensive Financial Account Information Reporting to Improve 

Tax Compliance

This proposal would create a comprehensive financial account information reporting 

regime. Financial institutions would report data on financial accounts in an information 

return. The annual return will report gross inflows and outflows with a breakdown for 

physical cash, transactions with a foreign account, and transfers to and from another 

account with the same owner. This requirement would apply to all business and 

personal accounts from financial institutions, including bank, loan, and investment 

accounts1, with the exception of accounts below a low de minimis gross flow threshold 

of $600 or fair market value of $600. 

Other accounts with characteristics similar to financial institution accounts will be 

covered under this information reporting regime. In particular, payment settlement 

entities would collect Taxpayer Identification Numbers (TINs) and file a revised Form 

1099-K expanded to all payee accounts (subject to the same de minimis threshold), 

reporting not only gross receipts but also gross purchases, physical cash, as well as 

payments to and from foreign accounts, and transfer inflows and outflows.

1Current income reporting by financial institutions would be expanded to all entities, including certain corporations. Interest 

payments would be included in the loan account reporting. Transferee information would be reported for all real estate transactions 

on Form 1099-S.
IRS - 42

Similar reporting requirements would apply to crypto asset exchanges and custodians. 

Separately, reporting requirements would apply in cases in which taxpayers buy crypto 

assets from one broker and then transfer the crypto assets to another broker, and 

businesses that receive crypto assets in transactions with a fair market value of more 

than $10,000 would have to report such transactions.

The Secretary would be given broad authority to issue regulations necessary to 

implement this proposal.

The proposal would be effective for tax years beginning after December 31, 2022.

Enhance Accuracy of Tax Information

Expand the Secretary’s authority to require electronic filing for forms and returns

Electronic filing would be required for returns filed by taxpayers reporting larger 

amounts or that are complex business entities, including: (1) income tax returns of 

individuals with gross income of $400,000 or more; (2) income, estate, or gift tax returns 

of all related individuals, estates, and trusts with assets or gross income of $400,000 or 

more in any of the three preceding years; (3) partnership returns for partnerships with 

assets or any item of income of more than $10 million in any of the three preceding 

years; (4) partnership returns for partnerships with more than 10 partners; (5) returns of 

REITs, REMICs, RICs, and all insurance companies; and (6) corporate returns for 

corporations with $10 million or more in assets or more than 10 shareholders. Further, 

electronic filing would be required for the following forms: (1) Forms 8918, “Material 

Advisor Disclosure Statement”; (2) Forms 8886, “Reportable Transaction Disclosure 

Statement”; (3) Forms 1042, “Annual Withholding Tax Return for U.S. Source Income of 

Foreign Persons”; (4) Forms 8038-CP, “Return for Credit Payments to Issuers of Qualified 

Bonds”; and (5) Forms 8300, “Report of Cash Payments Over $10,000 Received in a Trade 

or Business.”

Return preparers that expect to prepare more than 10 corporation income tax returns or 

partnership returns would be required to file such returns electronically.

The Secretary would also be authorized to determine which additional returns, 

statements, and other documents must be filed in electronic form in order to ensure the 

efficient administration of the internal revenue laws without regard to the number of 

returns that a person files during a year.

Improve information reporting for reportable payments subject to backup withholding

The proposal would also treat all information returns subject to backup withholding 

similarly. Specifically, the IRS would be permitted to require payees of any reportable 
IRS - 43

payments to furnish their TINs to payors under penalty of perjury. The proposal would 

be effective for payments made after December 31, 2021.

Implement A Program Integrity Allocation Adjustment and Provide Additional 

Funding for Tax Administration

The Administration proposes a multi-year adjustment to the discretionary spending 

allocation for the IRS Enforcement and Operations Support accounts. The total 

adjustment would be $6.7 billion over the budget window. The proposed allocation 

adjustment for 2022 would fund $417 million in enforcement and compliance initiatives 

and investments above current levels of activity. The adjustment would cover inflation 

and the cost to sustain the new initiatives and investments through 2031.

In addition, the Administration proposes to provide the IRS $72.5 billion in mandatory 

funding over the budget window. A portion of these proposed IRS resources would fund 

improvements and expansions in enforcement and compliance activities. The proposed 

mandatory funding would also provide the IRS with resources to enhance its 

information technology capability, including implementation of the proposed financial 

information reporting regime, and to strengthen taxpayer service.

The proposal would direct that additional resources go toward enforcement against 

those with the highest incomes, rather than Americans with actual income of less than 

$400,000.

Details about these IRS funding programs are provided elsewhere in the Budget.

IRS Centralized Services Fund / Working Capital Fund

The Budget includes appropriations language to establish a working capital fund for IRS 

centralized services. The fund will allow the IRS to achieve cost savings, promote 

economies of scale, establish more consistent processes and policies, and improve how 

it delivers facility services, technology, and other centralized services for its business 

units. For FY 2022, the fund proposes to start with several pilot projects that would test 

use of the fund, including potentially IT development and operations projects, facilities 

projects, and/or postage funding
IRS - 44

F – Evidence Building Activity

The Foundations for Evidence-Based Policymaking Act requires agencies to assess their 

ability and infrastructure to carry out evidence-building activities. This capacity 

assessment will be published in conjunction with the FY 22-26 Strategic Plan. The law 

also requires agencies to monitor and use the results of these activities. 

In addition to the projects listed below, IRS is also working with the Department of 

Treasury and OMB on several evaluation projects related to Executive Order 13985, “On 

Advancing Racial Equity and Support for Underserved Communities Through the Federal 

Government

Type of Evidence 

Building Activity

Major Activities and Planned 

Projects

Resource Types Use

Evaluation 

Collection and analysis 

of data to assess 

effectiveness and 

efficiency of programs, 

policies, or procedures

Estimated share of 

all EvidenceBuilding Activities:

 20 %

Major activities:

• Notice Redesign Using 

Behavioral Insights (A) 

• Customer Callback Initiative 

(A)

Occupational Series:

Management and Program 

Analysis

Information Technology 

Management

Miscellaneous Administration 

and Program

Operations Research

Economist

Program Manager 

Mathematical Statistics

Computer Science

Statistics

Social Science

☒ For internal policy 

 decision-making

☒ During internal 

 strategic management 

 processes

☐ By external partners 

 (government)

☐ By external partners 

 (non-government) 

☐ By unaffiliated 

 external researchers

☐ Other (describe)

FY21 and FY22 projects: 

• Marginal Revenue/Cost 

Case Selection (A)

• Measuring the Impact of 

Proactive Outreach and 

Education (P)

• Online Accounts usability 

testing (A)

• Employee misclassification 

modeling (A)

• Issue Recommender for 

Examination Program 

Enhancement (A)

• Evaluating Equity and 

Fairness in IRS workload 

section models (P)

Research 

Modeling or other 

systematic use of data 

to explore emerging 

issues or potential 

scenarios to generate 

new knowledge

Estimated share of 

all EvidenceBuilding Activities:

Major activities:

• Taxpayer Experience 

Strategy Initiative (A)

• Network Approaches for 

Emerging and Undetected 

Identify Theft Selections (A)

• Small Business/Self 

Employed Emerging Issues 

(A)

• Tax Gap research initiatives 

(A)

• Measuring Indirect Effects of 

enforcement activities (A)

Occupational Series:

Management and Program 

Analysis

Information Technology 

Management

Miscellaneous Administration 

and Program

Operations Research

Economist

Program Manager 

Mathematical Statistics

Computer Science

Statistics

☒ For internal policy 

 decision-making

☒ During internal 

 strategic management 

 processes

☒ By external partners 

 (government)

☐ By external partners 

 (non-government) 

☐ By unaffiliated 

 external researchers

☐ Other (describe)
IRS - 45

Type of Evidence 

Building Activity

Major Activities and Planned 

Projects

Resource Types Use

 35 % FY21 and FY22 projects: 

• Promoting Productivity in 

Nonfiler Programs (A)

• Exam Planning Scenario 

Tool (A)

Social Science

Analysis 

Routine and frequent 

use of data that 

produces insights for 

decision making and 

program management

 25 %

Major activities:

• Performance Measurement 

(A)

• Employment Tax 

noncompliance study (A)

Occupational Series:

Management and Program 

Analysis

Information Technology 

Management

Miscellaneous Administration 

and Program

Operations Research

Economist

Program Manager 

Mathematical Statistics

Computer Science

Statistics

Social Science

☒ For internal policy 

 decision-making

☒ During internal 

 strategic management 

 processes

☒ By external partners 

 (government)

☒ By external partners 

 (non-government) 

☐ By unaffiliated 

 external researchers

☐ Other (describe)

FY21 and FY22 projects: 

• Power of Attorney fraud 

analysis (A)

• Graphic Database 

Visualization studies (A)

Statistics 

Collection, 

compilation, and 

processing of data for 

describing or 

estimating 

characteristics or 

insights concerning 

groups

Estimated share of 

all EvidenceBuilding Activities:

 20 %

Major activities:

• Statistical Research Program 

(A)

• SOI Statistics on Individual, 

tax-exempt organizations, 

and government bonds (A)

• SOI Statistics on 

Corporation, small business, 

and Farms (A)

Occupational Series:

Management and Program 

Analysis

Information Technology 

Management

Miscellaneous Administration 

and Program

Operations Research

Economist

Program Manager 

Mathematical Statistics

Computer Science

Statistics

Social Science

☒ For internal policy 

 decision-making

☐ During internal 

 strategic management 

 processes

☒ By external partners 

 (government)

☒ By external partners 

 (non-government) 

☒ By unaffiliated 

 external researchers

FY21 and FY22 projects: ☐ Other (describe)

• None
IRS - 46

Section II – Budget and Performance Plan

A – Strategic Alignment

IRS FY 2018-2022 Strategic Goals

The Internal Revenue Service (IRS) FY 2018 – 2022 Strategic Plan articulates the IRS 

vision for accomplishing our mission and will guide the IRS’s strategic decision-making. 

The plan includes six strategic goals organized around three foundational areas: 

Mission, People, and Foundation. 

Mission:

• Empower and enable all taxpayers to meet their tax obligations. 

• Protect the integrity of the tax system by encouraging compliance through 

administering and enforcing the tax code. 

People:

• Collaborate with external partners proactively to improve tax 

administration. 

• Cultivate a well-equipped, diverse, flexible, and engaged workforce.

Foundation: 

• Advance data access, usability, and analytics to inform decision making 

and improve operational outcomes. 

• Drive increased agility, efficiency, effectiveness, and security in IRS 

operations. 

Strategic Alignment

In accordance with the Government Performance and Results Act Modernization Act 

(GPRAMA) of 2010, the Department of the Treasury is currently developing the FY 2022 
IRS - 47

– 2026 Departmental Strategic Plan for publication in 2022. The Annual Performance 

Plan will be updated in the FY 2023 President’s Budget to reflect new departmental 

strategic goals and objectives. The IRS will publish a component plan that aligns bureau 

activities and priorities to the Department’s by the spring of 2022.

FY 2021 and FY 2022 Initiatives:

The FY 2021 and FY 2022 initiatives contribute to three IRS strategic focus areas: Putting 

Taxpayers First, Modernizing the IRS, and Improving Compliance, as well as all six IRS 

strategic goals. The FY 2021 and FY 2022 initiatives build on each other and seek to 

transform IRS operations to improve taxpayer and employee experience and provide 

digital tools to increase voluntary compliance. Also, Modernization and improved 

Customer Experience remain top priorities and key drivers of transformation for the IRS.

The table on the next page summarizes key FY 2021 and FY 2022 initiatives under their 

relevant strategic focus area.

Putting Taxpayers First Modernizing the IRS Improving Compliance

Taxpayer First Act (FY 2021/FY 2022)

• FY21: Planning for the 

implementation of TFA provisions 

and developing the Taxpayer 

Experience Strategy, the 

comprehensive training strategy, and 

the organizational re-design plan. 

• FY22: Implementing the Taxpayer 

Experience Strategy, and other key 

provisions.

• FY22: The IRS will consolidate exam 

operations and processes that 

currently span across multiple 

business units. This consolidated 

exam office will be responsible for all 

examination processes across all 

taxpayer segments but would 

maintain some degree of 

specialization to address unique

taxpayer needs and emerging highrisk compliance areas. The 

consolidated exam office will bring 

together resources and expertise 

needed to address the more 

complex tax returns, including Global 

High Wealth individuals, large and 

multi-national corporations and, 

partnerships.

Improve Live Assistance (FY22)

• Improving the Telephone Level of 

Service (LOS) to 75%, reducing 

correspondence inventory, and 

optimizing staffing at Taxpayer 

Assistance Centers (TAC).

IRS Integrated Business Modernization 

Plan (FY21/22)

• Continuing progress on the overall 

Modernization Plan, and specifically 

making digital communication 

improvements to transform the 

taxpayer experience and support the 

IRS Taxpayer Experience Strategy 

implementation.

Reducing the Tax Gap (FY21/22)

• Providing robust civil and criminal 

enforcement to protect against those 

who pursue overly aggressive tax 

positions, while ensuring honest 

taxpayers have access to the services 

they need.

Program Integrity Allocation 

Adjustment (FY21/22)

• Expanding and improving the 

effectiveness and efficiency of the 

IRS’s tax enforcement program.

Ensure Fairness of the Tax System 

(FY22)

• Expanding enforcement efforts to 

cover large corporations, global high 

wealth, cyber-crime, and tax-exempt 

areas.
IRS - 48

Collaboration with Other Agencies:

• Providing Pandemic Relief to Taxpayers 

o The IRS cooperates with the Bureau of Fiscal Service (BFS), Social Security 

Administration, and the Department of Veterans Affairs to share data in 

order to quickly and efficiently send Economic Impact Payments (EIP) to 

taxpayers, and reduce the burden/ barriers in some taxpayers being able 

to receive the payments. 

• IRS also works closely with BFS on strategies to achieve the FY 21-22 goals.

• Evidence Act 

o IRS collaborates with Tobacco Tax and Trade Bureau (TTB) on Treasury’s 

Learning Agenda 

o IRS Research Director serves as the Chief Statistical Officer on Treasury’s 

Chief Data Council

o IRS Research provides data support and analysis for Treasury’s Office of 

Tax Policy 
IRS - 49

Taxpayer Services 

Appropriation Description

The Taxpayer Services appropriation provides funding for taxpayer service activities and 

programs. This includes printing forms and publications, processing tax returns and 

related documents, offering filing and account services, taxpayer assistance, and 

providing taxpayer advocacy services. 

The Taxpayer Services budget request for FY 2022 is $2,940,876,000 in direct 

appropriations and 29,838 FTE, excluding the proposed program integrity allocation 

adjustment. This amount is an increase of $353,270,000, or 13.65 percent, and an 

increase of 3,849 FTE, or 14.81 percent from the FY 2021 Operating Plan level (posttransfer) of $2,587,606,000 and 25,989 FTE.

2.1 – Budget Adjustment Table

Dollars in thousands

Taxpayer Services

Summary of Proposed FY 2021 Request FTE Amount

FY 2021 Operating Plan 25,989 $2,587,606

Changes to Base:

Maintaining Current Levels (MCLs) $75,138

Pay Annualization (1.0% average pay raise) 5,930

Pay Raise (2.7% average pay raise) 48,152

Non-Pay 4,138

FERS Contribution Increase 16,918

Efficiencies/Savings: (409) ($5,494)

Increase e-File Savings (101) (5,494)

Personnel Savings (308)

Subtotal FY 2022 Changes to Base (409) $69,644

FY 2022 Current Services 25,580 $2,657,250

Program Changes:

Program Increases

Putting Taxpayers First 55 35,459

User Authentication 27,000

Taxpayer Experience Strategy 55 8,459

Improve Live Assistance 4,203 248,167

Subtotal FY 2022 Program Increases 4,258 $283,626

Total FY 2022 Budget Request 29,838 $2,940,876

See footnotes in 1.1 -- Appropriations Detail Table
IRS - 50

2.2 – Object Classification Obligations

Dollars in thousands

Taxpayer Services

Object Classification

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

11.1 Full-Time Permanent Positions 1,562,252 1,599,165 1,808,921

11.3 Other than Full-Time Permanent Positions 46,130 53,855 55,591

11.5 Other Personnel Compensation 72,365 122,409 132,558

11.8 Special Personal Services Payments

11.9 Personnel Compensation (Total) 1,680,747 1,775,429 1,997,070

12.1 Personnel Benefits 628,759 576,632 667,191

13.0 Benefits to Former Personnel 27,645 19,887 20,340

Total Personnel and Compensation Benefits $2,337,151 $2,371,948 $2,684,601

21.0 Travel 12,649 5,162 9,710

22.0 Transportation of Things 697 671 685

23.1 Rental Payments to GSA 1

23.3 Communications, Utilities, & Misc 1,347 1,289 1,318

24.0 Printing & Reproduction 9,624 9,791 10,026

25.1 Advisory & Assistance Services 41,007 45,729 74,006

25.2 Other Services 21,773 25,190 25,729

25.3 Purchase of Goods & Services from Govt. Accounts 58,228 68,677 74,064

25.7 Operation & Maintenance of Equipment 249 51 56

26.0 Supplies and Materials 4,135 4,209 4,817

31.0 Equipment 244 400 406

41.0 Grants, Subsidies 48,000 54,000 54,960

42.0 Insurance Claims & Indemnities 449 489 498

Total Non-Personnel $198,403 $215,658 $256,275

New Appropriated Resources $2,535,554 $2,587,606 $2,940,876

Budget Activities:

Pre-filing Taxpayer Assistance & Education 647,066 657,618 713,346

Filing & Account Services 1,888,488 1,929,988 2,227,530

New Appropriated Resources $2,535,554 $2,587,606 $2,940,876

FTE 26,816 25,989 29,838

See footnotes in 1.1 -- Appropriations Detail Table

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million 

under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated 

Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million 

Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.
IRS - 51

2.3 – Appropriation Detail Table

2A – Pre-Filing Taxpayer Assistance and Education ($713,346,000 in direct 

appropriations and an estimated $1,557,000 in reimbursable programs): This budget 

activity funds direct labor and some non-labor expenses to assist with tax return 

preparation, including tax law interpretation, publication, production, and advocate 

services. The program activities include: 

• Pre-Filing Services Management supports headquarters staffing and support for 

Taxpayer Advocate Service and Customer Assistance Relationship and Education 

(CARE) program activities. CARE provides pre-filing taxpayer assistance and 

education. 

• Taxpayer Communication and Education researches customer needs; develops 

and manages educational programs; establishes partnerships with stakeholder 

groups; and disseminates tax information to taxpayers and the public through a 

variety of media, including publications and mailings, websites, broadcasting, and 

advertising. 

• Media and Publications develops and produces notices, forms, and publications 

for printed and electronic tax materials, and provides media production services 

to taxpayers. 

Dollars in thousands

Taxpayer Services

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Pre-Filing Taxpayer Assistance and Education 4,524 647,066 4,514 657,618 4,777 713,346 (263) 55,728 5.83% 8.47%

Filing and Account Services 22,236 1,888,488 21,475 1,929,988 25,061 2,227,530 (3,586) 297,542 16.70% 15.42%

Subtotal New Appropriated Resources 26,760 $2,535,554 25,989 $2,587,606 29,838 $2,940,876 (3,849) $353,270 14.81% 13.65%

Other Resources:

Reimbursables 660 73,347 674 67,501 696 71,214 22 3,713 3.26% 5.50%

Offsetting Collections - Non Reimbursables

User Fees 1,521 99,900 71 3,900 (1,450) (96,000) -95.33% -96.10%

Recovery from Prior Years 11 59 59

Unobligated Balances from Prior Years 4,737 1,142 (1,142) -100.00%

Transfers In/Out

Recoveries Paid 3 3

Resources from Other Accounts

Subtotal Other Resources 660 $78,095 2,195 $168,605 767 $75,176 (1,428) ($93,429) -65.06% -55.41%

Total Budgetary Resources 27,420 $2,613,649 28,184 $2,756,211 30,605 $3,016,052 (5,277) $259,841 8.59% 9.43%

See footnotes in 1.1--Appropriations Detail Table

Change % Change

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

FY 2021 to FY 2022 

Request

FY 2021 to FY 2022 

Request

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the Coronavirus Aid, Relief, and 

Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American 

Rescue Plan (ARP) (P.L. 117-2), the $417 million Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.
IRS - 52

• Taxpayer Advocacy provides advocate services to taxpayers by identifying the 

underlying causes of taxpayer problems and participating in the development of 

systematic and/or procedural remedies. 

• Account Management and Assistance – Field Assistance provides face-to-face 

assistance, education, and compliance services to taxpayers. It includes return 

preparation, answering tax questions, resolving account and notice inquiries, and 

supplying forms and publications to taxpayers. 

• Taxpayer Advocate Case Processing provides advocate services to taxpayers to 

resolve taxpayer problems through prompt identification, referral, and 

settlement. 

• Wage and Investment (W&I) HQ Management and Administration provides 

staffing, training, and direct support for W&I management activities of strategic 

planning, communications and liaison, finance, human resources, equity, diversity 

and inclusion, business modernization, and embedded training. 

• Taxpayer Services Research provides resources to support taxpayer services by 

conducting taxpayer behavioral studies, data analysis, and uses advanced 

analytics to deliver results and conclusions to inform business decisions to 

improve IRS products and services. 

• National Distribution Center processes orders for IRS forms and publications 

received from individual taxpayers, tax practitioners, and IRS tax return 

preparation partners. 

Description of FY 2020 Performance – Pre-Filing and Taxpayer Assistance

In FY 2020, the Timeliness of Critical Individual Filing Season (CIFS) Tax Products to the 

Public (i.e., tax forms, schedules, instructions, and publications) was 78.4 percent (69 out 

of 88 products delivered timely), falling short of the FY 2020 target of 89 percent by 12 

percent. The December 20, 2019 enactment of Public Law 116-94 did not allow enough 

time to incorporate the new laws into the tax products by the measure date of January 

20, 2020. The legislation effected over 160 tax products; 34 (40 percent) of these were 

CIFS, many of which had already been released to the public. Despite prioritization, 

workload planning, and the use of overtime, compensatory hours, and credit hours by 

IRS employees on weekdays, weekends, and holidays, the results fell just short of the 

annual target. The IRS expects to achieve a target of 85 percent for FY 2021 and 89 

percent for FY 2022. 

In FY 2020, the IRS Timeliness of Critical Tax TE/GE and Business (CTB) Filing Season Tax 

products to the Public was 96 percent, exceeding the target of 89 percent. These results 
IRS - 53

were achieved through the prioritization of critical products to ensure those products 

were available by the start of filing season, exceptional workload planning and 

monitoring by management and the extraordinary efforts of our employees, and 

overtime, credit, and compensatory time during workdays and weekends. Public Law 

116-94, enacted on December 20, 2019, had less of an impact on CTB tax products. 

While the legislation impacted over 160 tax products, only 12 of these were CTB. The IRS 

expects to achieve a target of 85 percent for FY 2021 and 89 percent for FY 2022. 

The FY 2020 Enterprise Self-Assistance 

Participation Rate (ESAPR) was 90.6 

percent, exceeding the FY 2020 target by 

10.5 percent and the FY 2019 result by 6 

percent. The web services that had the 

highest increases were Interactive Tax 

Assistant (128 percent), Where’s My 

Refund (37.1 percent), and Get Transcript 

Online (74.6 percent). Compared to 

FY 2019, total services increased by 

26.8 percent, self-assisted services 

increased by 34.5 percent and assisted 

services fell 18.5 percent due, in part, to 

the Coronavirus (COVID-19) pandemic as 

the IRS had several employee-assisted services either shutdown or reduced. Beginning 

in FY 2020, five new components were added to the methodology: Web applications 

ID-Verify, IP PIN, Online Account Sessions, Tax Withholding Estimator, and Employee 

Services Taxpayer Protection Program (TPP) calls. The ESAPR FY 2021 and FY 2022 target 

is set at 89 percent.

106.6 86.9

624.7

85.4%

840.4

90.6%

0

200

400

600

800

1000

FY 2019 FY 2020

Enterprise Self-Assistance Participation Rate

(in Millions)

Assisted Services Self-Assisted Services
IRS - 54

FY 2022 Changes by Budget Activity

2.1.1 – Budget and Performance Report and Plan

Dollars in thousands

Pre-Filing Taxpayer Assistance & Education FTE Amount

FY 2021 Operating Plan 4,515 $657,618

Changes to Base:

Maintaining Current Levels (MCLs) $19,453

Pay Annualization (1.0% average pay raise) 1,415

Pay Raise (2.7% average pay raise) 11,491

Non-Pay 1,785

FERS Contribution Increase 4,762

Efficiencies/Savings $8,492

Increase e-File Savings

Personnel Savings 8,492

Subtotal FY 2022 Changes to Base $27,945

FY 2022 Current Services 4,515 $685,563

Program Increases:

Putting Taxpayers First 13 1,498

Taxpayer Experience Strategy 13 1,498

Improve Live Assistance 350 26,285

Subtotal FY 2022 Program Increases 363 $27,783

Total FY 2022 Request 4,878 $713,346

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 363 $55,728

Percent Change FY 2022 Request over FY 2021 Operating Plan 8.04% 8.47%

Dollars in thousands

Pre-Filing Taxpayer Assistance & Education FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating 

Plan Request

Appropriated Resources1 $609,445 $594,962 $640,379 $621,907 $632,893 $657,618 $713,346

Reimbursable Resources2 13 4 260 118 578 1,476 1,557

User Fees2

Budget Activity Total $609,458 $594,966 $640,639 $622,025 $633,471 $659,094 $714,903

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

Pre-Filing Taxpayer Assistance & Education FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measure Actual Actual Actual Actual Actual Target Target Target

Timeliness of Critical Filing Season Tax Products to the Public 

(Ot)1 92.5% 93.1% 59.6% 92.6% 78.4% 89.0% 85.0% 89.0%

Timeliness of Critical TE/GE & Business Tax Products to the 

Public (Ot)1 98.0% 96.7% 100.0% 96.1% 96.0% 89.0% 85.0% 89.0%

Enterprise Self Assistance Participation Rate (E) (L)2 89.0% 79.0% 82.0% 85.4% 90.6% 82.0% 89.0% 89.0%

1Modified for FY 2019

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Strategic Goal Measure

2 Starting in FY 2017, the IRS modified the Taxpayer Self Assistance Rate measure (renamed to Enterprise Self Assistance Participation Rate) to include additional selfservice channels including Get Transcript and payment applications such as Direct Pay and Online Payment Agreements. As new self-assistance applications are 

provided to the public, they will be added to the methodology.
IRS - 55

2B – Filing and Account Services

($2,227,530,000 in direct appropriations, $69,657,000 from reimbursable programs, and 

$3,900,000 from user fees): This budget activity funds direct labor and non-labor 

expenses that provide filing and account services to taxpayers, process paper and 

electronically-submitted tax returns, issue refunds, and maintain taxpayer accounts. The 

public continues to file more returns electronically (more than 90 percent of individual 

returns were filed electronically during the 2018 filing season). The program activities 

include:

• Filing and Account Services Management administers filing and account services 

programs. 

• Submission Processing processes paper and electronically submitted tax returns 

and supplemental documents, accounts for tax revenue, processes information 

documents, and issues refunds and tax notices. 

• Account Management and Assistance – Electronic/Correspondence Assistance 

provides education and assistance to taxpayers and resolves accounts and notice 

inquiries through telephone, paper, and internet correspondence. 

• Electronic Products and Services Support (EPSS) provides centralized operations 

and support capabilities for the IRS suite of electronic products, including e-help 

desk, technology support, and operations support. 

• Electronic Tax Administration (ETA) markets and administers electronic tax 

administration products and services. 

• Health Care Tax Administration provides funds to administer the health insurance 

tax credit portion of the Trade Adjustment Assistance Reform Act of 2002. 

• Joint Operations Center (JOC) provides service, support, and technology for 

telephone, correspondence, and electronic media inquiries; real time monitoring 

and routing of inbound calls; monitoring of Customer Service Representative 

(CSR) accuracy; and management of the enterprise telephone database. 
IRS - 56

Description of FY 2020 Performance – Filing and Account Services

Millions of business taxpayers file their 

returns electronically. The IRS achieved a 67.4 

percent business e-file rate in FY 2020 

surpassing the target of 60 percent. The IRS 

processed 30.7 million business returns 

electronically—a five-year high and a 5.7 

percent increase from FY 2019. Employment 

tax returns (Form 941, Employer’s Quarterly 

Federal Tax Return), continue to increase as a 

share of business returns filed from 

39 percent in FY 2016 to 41 percent in FY 

2020. The IRS will continue to promote the benefits of e-filing (i.e., faster refunds, 

greater accuracy, secure and confidential submission, and quick confirmation). Starting 

in FY 2021, the business e-file rate measure will be discontinued from budget reporting 

as it is reported elsewhere.

In FY 2020, Customer Accuracy – Tax Law Phones was at 91 percent, 1.1 percent below 

the target of 92 percent. All Tax Law toll-free applications were inactive from April 1 

through June 12 due to the shutdown of toll-free sites at the beginning of the 

pandemic. When the Tax Law toll-free sites resumed operations on Monday, June 15, 

the inactivity due to the COVID-19 pandemic impacted the Enterprise quality. The IRS 

will continue to monitor results through data-driven analysis of reports obtained from 

the Embedded Quality Review System to ensure achievement of future goals. Ongoing 

efforts have and will continue to focus on production meetings with field sites, 

promoting coding consistency of product reviews, and providing training to managers 

and employees to ensure quality service to customers. For FY 2021 and FY 2022, the IRS 

set a Customer Accuracy – Tax Law Phones target of 90 percent. 

For Customer Accuracy – Accounts (Phones), the IRS answered 93.5 percent of account 

questions over the telephone correctly, 0.5 percent below the FY 2020 target of 94 

percent. The IRS closed all toll-free lines on March 31 to stop the spread of COVID-19 

and began opening with limited staffing in early May with services limited to the 

Taxpayer Protection Program lines only. Other lines resumed operations throughout 

May and June. Taxpayer Assistance Centers was the last product line to reopen on June 

26. The IRS continues to monitor Account Telephone Customer Accuracy results through 

data-driven analysis of reports obtained from Embedded Quality Review System to 

achieve future goals. To ensure quality service to customers, IRS is conducting 

production meetings with field sites, promoting coding consistency of product reviews, 

50.0% 52.9% 55.6% 57.8%

67.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Business E-File Rate
IRS - 57

and providing training to managers and employees. For FY 2021 and FY 2022, the IRS 

set an accounts accuracy target of 91 percent. 

Customer Service Representative 

(CSR) Level of Service (LOS) 

measures the relative success rate 

of taxpayers wanting to speak with 

a CSR. CSR LOS includes telephone 

lines answered by Accounts 

Management Customer Service 

Representatives. These telephone 

phone lines service 78 percent of 

all telephone traffic. In FY 2020, the 

CSR LOS was 53.1 percent, which is

lower than the target of 60.0 

percent. This was primarily due to 

actions taken in response to the COVID-19 pandemic and the additional phone calls and 

correspondence inventory generated by EIP, changes to the filing season deadline, and

other tax-law changes that were implemented to help individuals and businesses during 

the pandemic. Starting March 16, IRS implemented COVID-19 pandemic safety 

measures by closing call sites incrementally. On March 31, IRS closed all sites and tollfree lines. Throughout May and June, IRS took a phased approach to reopen Accounts 

Management phone lines as it increased telework capacity for more employees.

Taxpayer Assistance Center lines reopened June 26. IRS also extended the filing season 

deadline to July 15. Due to the impact the pandemic had on the workforce and the 

resulting changes in IRS operating procedures to protect the workforce, the increased 

work due to a second and third rounds of EIPs in December and March 2021, and a 

dramatic increase in call volume as taxpayers sought information on EIPs and other tax 

changes, the IRS will lower its FY 2021 LOS target for CSR LOS to 32 percent. At a 

32 percent LOS, the IRS can maintain a manageable correspondence inventory level of 

approximately 1.4 million, which will help prevent additional demand and/or duplicate 

correspondence from taxpayers waiting for resolution. The FY 2022 target is set at 

75 percent.

The IRS’ Enterprise level of service (LOS) metric measures the relative success rate of 

taxpayers calling to speak with an IRS Assistor on any public facing toll-free line. 

Part of the Enterprise LOS are the phone lines used to calculate the CSR LOS. 

Additionally, the Automated Collection System (ACS) line for compliance related 

inquiries, is part of the Enterprise LOS but not part of the CSR LOS. For FY 2020 

Enterprise LOS was 51.2 percent, CSR LOS was 53.2 percent, and the ACS LOS was 

39.8 percent. Due to COVID-19 evacuation orders, most toll-free phone operations 

were closed in mid-March 2020 and began a phased reopening in May 2020. 

53.4%

77.1%

75.9%

65.4%

53.1%

30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

CSR LOS
IRS - 58

The Taxpayers Satisfied with the IRS 

indicator – the All Individual Tax Filers 

Score, is based on the annual American 

Customer Satisfaction Index (ACSI) 

Survey, which is the only uniform, 

cross-industry/government measure of 

customer satisfaction with the quality of 

goods and services available to U.S. 

residents. The measure is calculated as 

a weighted combination of the ACSI 

Individual Electronic Tax Filer and 

Individual Paper Tax Filer Customer 

Satisfaction Index scores based on a 100-point scale. The Taxpayers Satisfied with the 

IRS measure rebounded a point in 2020 to 74, due to a statistically significant increase in 

the electronic filer score. 

FY 2022 Changes by Budget Activity

Dollars in thousands

Filing and Account Services FTE Amount

FY 2021 Operating Plan 21,474 $1,929,988

Changes to Base:

Maintaining Current Levels (MCLs) $55,686

Pay Annualization (1.0% average pay raise) 4,515

Pay Raise (2.7% average pay raise) 36,661

Non-Pay 2,354

FERS Contribution Increase 12,156

Efficiencies/Savings (409) ($13,986)

Personnel Savings (308) (8,492)

Subtotal FY 2022 Changes to Base (409) $41,700

FY 2022 Current Services 21,065 $1,971,688

Program Increases:

Putting Taxpayers First 42 33,960

User Authentication 27,000

Taxpayer Experience Strategy 42 6,960

Improve Live Assistance 3,853 221,882

Subtotal FY 2022 Program Increases 3,895 $255,842

Total FY 2022 Request 24,960 $2,227,530

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 3,486 $297,542

Percent Change FY 2022 Request over FY 2021 Operating Plan 16.23% 15.42%

0

10

20

30

40

50

60

70

80

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Taxpayers Satisfied with the IRS
IRS - 59

2.1.2 – Budget and Performance Report and Plan

Dollars in thousands

Filing and Account Services FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating Plan Request

Appropriated Resources1 $1,550,027 $1,564,488 $1,712,511 $1,872,175 $1,901,467 $1,929,988 $2,227,530

Reimbursable Resources2 28,555 30,147 34,905 62,794 72,769 66,025 69,657

User Fees2 160,342 40,553 69,987 3,900 99,900 3,900

Budget Activity Total $1,738,924 $1,635,188 $1,817,403 $1,938,869 $1,974,236 $2,095,913 $2,301,087

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

Filing and Account Services FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measures Actual Actual Actual Actual Actual Target Target Target

Percent of Business Returns Processed Electronically (Oe) 50.0% 52.9% 55.6% 57.8% 67.4% 60.0% Discontinued Discontinued

Customer Accuracy - Tax Law (Phones) (Ot) 96.4% 96.7% 95.5% 91.6% 91.0% 92.0% 90.0% 90.0%

Customer Accuracy - Accounts (Phones) (Ot) 96.1% 96.0% 96.1% 94.3% 93.5% 94.0% 91.0% 91.0%

Customer Service Representative Level of Service (Oe)1 53.4% 77.1% 75.9% 65.4% 53.1% 60.0% 32.0% 75.0%

Taxpayers Satisfied with the IRS (based on a 100 point scale)2 74 74 74 73 74 Indicator Indicator Indicator

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Long Term Goal

1CSR LOS is computed based on Accounts Management telephone phone lines only. These telephone phone lines service 78% of all telephone traffic. The FY20 Enterprise LOS is 51.2%. 

The Enterprise LOS measures the relative success rate of taxpayers calling to speak with an IRS Assistor on any IRS toll-free line—not just those answered by Accounts Management 

CSRs. 

2Based on the American Customer Satisfaction Index (ACSI) survey; the All Individual Tax Filer score is calculated from separate ACSI Individual Paper Filer and Electronic Filer customer 

satisfaction index scores; available on an annual basis at the end of January and computed on a 100-point scale. 
IRS - 60

Enforcement

Appropriation Description 

The Enforcement appropriation provides funding for the examination of tax returns, 

both domestic and international; administrative and judicial settlement of taxpayer 

appeals of examination findings; technical rulings; monitoring of employee pension 

plans; determination of qualifications of organizations seeking tax-exempt status; 

examination of tax returns of exempt organizations; enforcement of statues relating to 

detection and investigation of criminal violations of the internal revenue laws; 

identification of underreporting of tax obligations; securing of unfiled tax returns; and 

collection of unpaid accounts. 

The Enforcement budget request for FY 2022 is $5,462,823,000 in direct appropriations 

and 36,905 FTE, excluding the proposed program integrity allocation adjustment. This 

amount is an increase of $458,201,000, or 9.16 percent, and 1,916 FTE more than the FY 

2021 Operating Plan level (post-transfer) of $5,004,622,000 and 34,989 FTE.
IRS - 61

2.1 – Budget Adjustments Table

Dollars in thousands

Enforcement

Summary of Proposed FY 2021 Request FTE Amount

FY 2021 Operating Plan 34,989 $5,004,622

Changes to Base:

Maintaining Current Levels (MCLs) $148,473

Pay Annualization (1.0% average pay raise) 11,650

Pay Raise (2.7% average pay raise) 94,603

Non-Pay 6,725

FERS Contribution Increase 35,495

Subtotal FY 2022 Changes to Base $148,473

FY 2022 Current Services 34,989 $5,153,095

Program Changes:

Program Increases

Putting Taxpayers First 96 36,294

Taxpayer Experience Strategy 96 36,294

Ensure Fairness of the Tax System 1,820 270,858

Electric Vehicles and Associated Infrastructure 2,576

Subtotal FY 2022 Program Increases 1,916 $309,728

Total FY 2022 Budget Request 36,905 $5,462,823

PIAA Program Increases

Increase Audit Coverage 1,028 109,317

Increase Collection Coverage 1,164 113,122

Expand Coverage in the Tax-Exempt Sector 244 29,952

Enhance Return Review Program 60 3,388

Enhance Enforcement Operations 23 31,673

Subtotal FY 2022 PIAA Program Increases 2,519 $287,452

Total FY 2022 Request Including PIAA 39,424 $5,750,275

See footnotes in 1.1 -- Appropriations Detail Table
IRS - 62

2.2 – Object Classification Obligations

Dollars in thousands

Enforcement

Object Classification

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

11.1 Full-Time Permanent Positions 3,164,876 3,130,581 3,386,406

11.3 Other than Full-Time Permanent Positions 33,239 26,773 27,748

11.5 Other Personnel Compensation 116,058 145,294 154,439

11.8 Special Personal Services Payments 20,474 29,500 30,173

11.9 Personnel Compensation (Total) 3,334,647 3,332,148 3,598,766

12.1 Personnel Benefits 1,241,318 1,327,650 1,452,470

13.0 Benefits to Former Personnel 578 323 330

Total Personnel and Compensation Benefits $4,576,543 $4,660,121 $5,051,566

21.0 Travel 93,954 55,527 99,618

22.0 Transportation of Things 9,021 8,580 18,758

23.2 Rent Payments to Others 328 282 303

23.3 Communications, Utilities, & Misc 2,146 4,208 4,354

24.0 Printing & Reproduction 2,690 2,770 2,995

25.1 Advisory & Assistance Services 123,021 173,410 153,013

25.2 Other Services 50,531 34,826 50,054

25.3 Purchase of Goods & Services from Govt. Accounts 15,111 30,394 36,989

25.4 Operation & Maintenance of Facilities 4 5 5

25.6 Medical Care 8 125 125

25.7 Operation & Maintenance of Equipment 1,421 1,966 6,851

26.0 Supplies and Materials 18,234 20,830 23,141

31.0 Equipment 10,770 6,108 9,479

32.0 Land and Structures 1

42.0 Insurance Claims & Indemnities 1,217 970 989

91.0 Unvouchered 4,500 4,500 4,583

Total Non-Personnel $332,957 $344,501 $411,257

New Appropriated Resources $4,909,500 $5,004,622 $5,462,823

Budget Activities:

Investigations 648,819 698,193 773,605

Exam & Collections 4,081,409 4,120,886 4,497,709

Regulatory 179,272 185,543 191,509

New Appropriated Resources $4,909,500 $5,004,622 $5,462,823

FTE 35,448 34,989 36,905

See footnotes in 1.1 -- Appropriations Detail Table

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million 

under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated 

Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million 

Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.
IRS - 63

2.3 – Appropriation Detail Table

2C – Investigations

($773,605,000 in direct appropriations, and an estimated $42,615,000 from reimbursable 

programs): This budget activity funds the Criminal Investigation (CI) programs that 

explore potential criminal and civil violations of tax laws; enforce criminal statutes 

relating to violations of tax laws and other financial crimes; and recommend prosecution 

as warranted. The program activities include: 

• General Management and Administration supports the headquarters 

management activities of strategic planning, communications, finance, and 

human resources for CI activities. 

• Identity Theft, through CI's collaboration with internal and external business 

partners, combats the inherent risks of Stolen Identity Refund Fraud (SIRF) by 

focusing on significant tax investigations, prosecutions to maximize deterrence, 

and preventing the IRS from issuing fraudulent refunds. 

• CI supports the enforcement of criminal statutes relating to violations of internal 

revenue laws and other financial crimes. CI investigates cases of suspected intent 

to defraud involving both legal and illegal sources of income and recommends 

prosecution as warranted. This includes the investigation and prosecution of tax 

and money-laundering violations associated with narcotics organizations. 

• Criminal Tax Legal Support provides legal advice and support from IRS Counsel 

to CI. 

Dollars in thousands

Enforcement

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Investigations 2,971 648,819 3,012 698,193 3,175 773,605 163 75,412 5.41% 10.80%

Exam and Collections 31,467 4,081,409 30,987 4,120,886 32,736 4,497,709 1,749 376,823 5.64% 9.14%

Regulatory 950 179,272 990 185,543 994 191,509 4 5,966 0.40% 3.22%

Subtotal New Appropriated Resources 35,388 $4,909,500 34,989 $5,004,622 36,905 $5,462,823 1,916 $458,201 5.48% 9.16%

Other Resources:

Reimbursables 49 41,734 63 40,394 65 42,615 2 2,221 3.17% 5.50%

Offsetting Collections - Non Reimbursable 6,728 21,300 22,472 1,172 5.50%

User Fees 2,454

Recovery from Prior Years 4,962 1,114 1,114

Recoveries Paid 3,392 3,392

Unobligated Balances from Prior Years 329 69,806 200,055 200,256 201 0.10%

Transfers In/Out 137 140 140

Resources from Other Accounts 272 434 96,190 434 70,942 (25,248) -26.25%

Subtotal Other Resources 650 $125,821 497 $362,585 499 $340,931 2 ($21,654) 0.40% -5.97%

Total Budgetary Resources 36,038 $5,035,321 35,486 $5,367,207 37,404 $5,803,754 1,918 $436,547 5.40% 8.13%

See footnotes in 1.1--Appropriations Detail Table

FY 2021 to FY 2022 

Request

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security 

(CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 

million Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.

FY 2021 to FY 2022 

Request

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

Change % Change
IRS - 64

• International Investigations supports international investigations involving U.S. 

citizens residing abroad, non-resident aliens, expatriates (U.S. citizens living 

abroad who have renounced their citizenship), and investigations involving other 

international issues, including legal support (e.g., Foreign Tax Credit and Foreign 

Earned Income Exclusion, Corporations, Non-Profits, Pension Plans, etc.). 

• Cybersecurity supports CI’s cyber-efforts around inherent risks to CI’s networks 

and systems, while focusing enforcement and investigative actions on the 

criminals that pose those threats. This activity also supports security program 

management that protects the safeguarding of all data and systems within CI 

while adhering to all federal regulatory security compliance mandates and local 

security policies. 
IRS - 65

Description of FY 2020 Performance – Investigations

Criminal Investigation (CI) serves the American public by investigating potential criminal 

violations of the Internal Revenue Code and related financial crimes in a manner that 

fosters confidence in the tax system and compliance with the law. CI uses the following 

measures to evaluate its success in achieving its mission. 

In FY 2020, CI completed 2,624 criminal investigations, falling just short of the year-end 

target of 2,700, a 6.2 percent decrease compared to FY 2019. Cases related to legal

source income, illegal source income, and narcotics source income completed through 

the fourth quarter decreased 4.1 

percent, 7.4 percent, and 8.0 percent, 

respectively, compared to the same 

period in FY 2019. Legal source cases 

include people that earn their 

income legally, but willfully violate 

the tax laws (tax evasion). Examples 

of illegal cases include 

embezzlement, mortgage fraud, 

telemarketing fraud, and money 

laundering. Narcotics cases are like 

illegal cases; however, these cases 

are specific to profits and financial 

gains of organized drug groups 

involved in narcotics, narcotics trafficking, and money laundering. Year-end performance 

for criminal investigations completed is currently projected at 2,600 for FY 2021 and FY 

2022. Year-end projections account for recent hires, attrition levels, impact of on-the-job 

instructors and current performance trends. They also account for setbacks and 

challenges presented because of the COVID-19 pandemic and its impact on future 

performance. In FY 2020, the pandemic impacted daily investigative activities and 

contributed to a higher cycle time for investigations completed. CI also focuses on 

traditional tax case programs which tend to have a higher cycle time. Despite these 

challenges, CI continues to use proven case development strategies, expand case 

development efforts, and leverage interagency partnerships to identify, initiate, and 

complete significant criminal investigations in all program areas.

 -

 500

 1,000

 1,500

 2,000

 2,500

 3,000

 3,500

 4,000

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Criminal Investigations Completed 

and Associated FTE

Criminal Investigations Completed

FTE for Criminal Investigations
IRS - 66

The FY 2020 conviction rate 

of 90.4 percent was 1.7

percent below the year‐end 

target of 92 percent and 

reflects a 0.8 percentage 

point decrease compared 

to FY 2019. In response to 

the pandemic, courts 

closed temporarily 

throughout the country. As 

a result, fewer criminal 

cases were heard in court resulting in a lower number of convictions in FY 2020 denoted 

by the blue bars. Additionally, decreases in the number of special agents in previous 

years resulted in fewer cases initiated and consequently recommended for prosecution. 

Nonetheless, appropriate case selection and effective field performance continue to 

positively affect the quality of cases, resulting in a high conviction rate. CI's rate of 

conviction continues to be a strong indicator of investigative quality given that it is one 

the highest in federal law enforcement. CI will continue to coordinate with the 

Department of Justice (DOJ) Tax Division and U.S. Attorney Offices (USAO) regarding 

prosecutorial priorities and the appropriate development of investigations to maintain a 

high rate of conviction. The FY 2021 and FY 2022 targets for Conviction Rate will remain 

at 92 percent based on historical averages. Future performance depends on DOJ and 

USAO. CI does not prosecute its own cases. DOJ and USAO must accept cases for 

prosecution. DOJ and USAO may have to respond to other legislative and prosecutorial 

priorities and they cannot always prosecute CI cases.

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

 -

 500

 1,000

 1,500

 2,000

 2,500

 3,000

 3,500

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Convictions vs. Conviction Rate
IRS - 67

FY 2022 Changes by Budget Activity

2.1.3 – Budget and Performance Report and Plan

Dollars in thousands

Investigations FTE Amount

FY 2021 Operating Plan 3,012 $698,193

Changes to Base:

Maintaining Current Levels (MCLs) $20,454

Pay Annualization (1.0% average pay raise) 1,492

Pay Raise (2.7% average pay raise) 12,113

Non-Pay 1,515

FERS Contribution Increase 5,334

Subtotal FY 2022 Changes to Base $20,454

FY 2022 Current Services 3,012 $718,647

Program Increases:

Putting Taxpayers First 2 $247

Taxpayer Experience Strategy 2 $247

Ensure Fairness of the Tax System 160 $52,135

Convert Vehicle Fleet to Electric $2,576

Subtotal FY 2022 Program Increases 162 $54,958

Total FY 2022 Request (Before PIAA) 3,174 $773,605

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 162 $75,412

Percent Change FY 2022 Request over FY 2021 Operating Plan 5.38% 10.80%

Dollars in thousands

Investigations FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating 

Plan Request

Appropriated Resources1$591,449 $589,295 $581,680 $595,686 $619,227 $698,193 $773,605

Reimbursable Resources229,053 33,618 28,295 27,749 41,233 40,080 42,284

User Fees2

Budget Activity Total $620,502 $622,913 $609,975 $623,435 $660,460 $738,273 $815,889

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

Investigations FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measures Actual Actual Actual Actual Actual Target Target Target

Criminal Investigations Completed (Ot) 3,721 3,089 3,051 2,797 2,624 2,700 2,600 2,600

Conviction Rate (Oe) 92.1% 91.5% 91.7% 91.2% 90.4% 92.0% 92.0% 92.0%

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and interappropriation transfers.

Key: Oe - Outcome Measure, Ot - Output/Workload Measure
IRS - 68

2D – Exam and Collections

($4,497,709,000 in direct appropriations, and an estimated $28,000 from reimbursable 

programs): This budget activity funds programs that enforce the tax laws and increase 

compliance through examination and collection programs that ensure proper payment 

and tax reporting. This budget activity also includes campus support of the 

Questionable Refund program and appeals, and litigation activities associated with 

exam and collection. The program activities include: 

• Compliance Services Management supports management associated with exam 

and compliance program activities. 

• Payment Compliance – Correspondence Collection supports IRS collection 

activities by initiating contact and collecting delinquent taxpayer liabilities 

through written notices and other means. 

• Automated Collections and Support initiates contact and collects delinquent 

taxpayer liabilities through the centralized Automated Collection System (ACS). 

• Payment Compliance – Field Collection conducts field investigations and 

collection efforts associated with delinquent taxpayer and business entity 

liabilities, including direct taxpayer contact and outreach programs to protect the 

interest of the federal government in delinquent tax liability situations. 

• Tax Reporting Compliance – Document Matching supports the Automated 

Underreporter (AUR), Combined Annual Wage Reporting (CAWR), Federal 

Unemployment Tax Act (FUTA), and other document matching programs. 

• Tax Reporting Compliance – Electronic/Correspondence Exam initiates written 

correspondence with taxpayers related to tax issues arising from claims on their 

tax returns. 

• Tax Reporting Compliance – Field Exam compares taxpayer income levels and 

corresponding tax liabilities to ensure the accuracy of taxpayer returns. 

• Fraud/Bank Secrecy Act enforces the anti-money laundering provisions of the 

Bank Secrecy Act of 1970 (BSA) and the USA Patriot Act of 2001. It examines nonbank financial institutions for compliance with these laws, receives and processes 

more than 15 million financial reports annually, and manages a centralized 

database of that information for the Financial Crimes Enforcement Network. The 

Fraud program follows the money trail to support the criminal investigation of tax 

evasion operations. Fraud technical advisors and revenue agents supply 

investigative leads and referrals to federal, state, and local law enforcement 

agencies. 

• Appeals supplies an administrative review process that provides a channel for 

impartial case settlement before a case is docketed in a court of law. 
IRS - 69

• Litigation provides legal support for the IRS in litigation of cases, including 

interpretation of the tax law. 

• Specialty Programs – Exams examines federal tax returns of businesses and 

individuals responsible for the filing and payment of employment, excise, estate, 

and gift taxes. 

• International Collection supports international field collection efforts associated 

with delinquent taxpayer and business entity liabilities from U.S. citizens residing 

abroad, non-resident aliens, expatriates (U.S. citizens living abroad who have 

renounced their citizenship), and those involving other international issues (e.g., 

Foreign Tax Credit and Foreign Earned Income Exclusion). 

• International Exams supports the international exam program involving U.S. 

citizens residing abroad, non-resident aliens, expatriates, and other examinations 

involving other international issues including legal support (e.g., Foreign Tax 

Credit and Foreign Earned Income Exclusion, Corporations, Non-Profits, Pension 

Plans, etc.). 

• Enforcement Research provides resources for market-based research to identify 

compliance issues, for conducting tests of treatments to address noncompliance, 

and for the implementation of successful treatments of taxpayer non-compliant 

behavior. 

• Unit General Management and Administration provides staffing, training, and 

direct support for headquarters management activities of strategic planning, 

communication and liaison, finance, human resources, equity, diversity and 

inclusion, business system planning, and embedded training. 

• EITC Management and Administration supports headquarters management 

associated with EITC. 

• Integrity & Verification Operations supports civil fraud detection and prevention 

efforts in a pre-refund environment including monitoring performance and 

developing policy, procedures, and guidance for processing civil revenue 

protection programs. 

• ID Theft Victim Assistance has end-to-end responsibility and accountability for 

identity theft victim assistance policy and operations, which includes paper 

inventories from tax-related ID theft, the Identity Theft Protection Specialized 

Unit, and Return Preparer Misconduct. 

• Whistleblower Office provides staffing, training, and direct support to process, 

assess, and analyze tips from individuals who identify tax problems during their 

daily business, regardless of where encountered (including workplace). 
IRS - 70

• Communications and Liaison coordinates local government and liaison 

relationships; manages congressional, state, and national stakeholder 

relationships and issues; coordinates crosscutting issues, including audit 

management and legislative implementation; manages national media contacts 

and local media relationships; and ensures compliance with disclosure and 

privacy laws. 

• Return Integrity, Verification & Program Management provides policy and 

program oversight of revenue protection efforts such as detection, prevention, 

and treatment of improper refunds (identity theft and non-compliance), including 

managing systemic solutions regarding payment of valid refund claims and the 

development of innovative technology solutions supporting IRS-wide revenue 

protection strategies. 

Description of FY 2020 Performance – Exam

The Examination program provides taxpayers top quality service by helping them 

understand and meet their tax responsibilities and by applying the tax law with integrity 

and fairness. The performance metrics IRS uses to gauge the Examination program’s 

performance are discussed below.

In FY 2020, Individual Exam Coverage was 0.29 percent which was below the target of 

0.48 percent. The effects of the 

pandemic shutdown drove 

closures 33 percent lower than 

FY 2019 while tax return filings 

continued to rise. From April 1 

through July 15, 2020, the IRS’s 

People First Initiative provided 

taxpayers experiencing COVID19 related hardships relief from 

certain collection actions and 

processes.

For FY 2021, the IRS is considering discontinuing the reporting of this measure for 

budget purposes and replacing it with a measure that allows IRS to highlight the

strategic direction, including putting greater emphasis on large business, highincome/high-wealth taxpayers, and partnerships.

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

0

5,000

10,000

15,000

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Individual Exam Closures with Coverage Rates

Exam Closures (hundreds) Exam Coverage Individual
IRS - 71

Examination Coverage – Business (Assets > $10 million) measure is calculated by taking 

the total number of Large Business and International (LB&I) returns with assets of more 

than $10 million, including all partnerships examined and closed by LB&I during the 

current fiscal year, divided 

by total filings for the prior 

calendar year. In FY 2020, 

Business Examination 

Coverage was 1.3 percent, 

below the target of 1.7 

percent. Coverage for large 

business returns is below 

target as a result of several 

non‐examination activities 

including: new hires in 

training and examiners 

conducting new hire training; examiners taking make-up Tax Cuts and Jobs Act of 2017 

(TCJA) training; hiring new and moving current managers to new training groups; and 

loss of productivity due to the COVID-19 working environment and the People First 

Initiative, which includes reduced contacts with taxpayers. 

For FY 2021, the IRS is considering discontinuing the reporting of this measure for 

budget purposes and replacing with a measure that allows IRS to highlight the strategic 

direction, including greater emphasis on large business, high-income / high-wealth 

taxpayers, and partnerships.

In FY 2020, Exam Efficiency - Individual (the number of closures divided by the total

Exam FTE) was 76, below the target of 115 and down 30 percent from FY 2019, primarily 

due to the pandemic. The IRS set a target of 111 in FY 2021 and a target of 117 in FY 

2022. IRS will monitor starts and inventory to meet its targets in the upcoming fiscal 

years.

Automated Underreporter Coverage ended FY 2020 at 0.6 percent, below the target of 

1.7 percent, due to office closures because of COVID-19. When employees returned to 

the office, they prioritized screening since they did not have access to all 

correspondence due to backlogs in mailrooms. Early in the year, the number of closures 

decreased due to fewer cases being available because of the FY 2019 lapse in 

appropriations. Starting in FY 2021, this measure will be discontinued from budget 

reporting, as automated underreporter coverage is factored into two other indicators: 

Time to Resolve Compliance Issue After Filling and Time to Start Compliance Resolution.

-1.00%

1.00%

3.00%

5.00%

0

5,000

10,000

15,000

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Business Exam Closures with Coverage 

Rates

Exam Closures Exam Coverage Business
IRS - 72

The Time to Start Compliance Resolution is a new indicator for FY 2020 and is defined as

the percentage of all individual income tax enforcement cases started within six months 

of the return posting date. It reflects the effect of expedited issue detection and more 

integrated enforcement approaches. 

It supports expedited document 

matching, enhanced anomaly detection 

leading to faster issue identification, and 

data and analytics to improve issue 

identification and treatment selection. For 

FY 2020, the percent of individual enforcement cases started within 6 months was 66.3

percent compared to 60.9 percent for FY 2019.

Time to Resolve Compliance Issue After Filing is a new indicator for FY 2020 and is 

defined as the median time it takes to 

close all individual income tax enforcement 

cases in days. This measure reflects the 

complete life cycle from return filing to 

resolution. It also reflects the effect of 

process enhancements, such as new selfcorrection capabilities, including Online 

Account. It supports expedited document 

matching and enhanced anomaly detection, which will lead to faster issue identification

and resolution. For FY 2020, the overall Time to Resolve Compliance Issue After Filing 

was 491 days up from 469 days in FY 2019.

Repeat Non-Compliance Rate is a new indicator for FY 2020 and is defined as the 

percentage of individual taxpayers 

with repeat non-compliance two 

years after the initial tax year for 

filing, payment, or reporting 

compliance. This measure supports 

expedited document matching, 

enhanced anomaly detection leading to faster issue identification, and Enterprise Case 

Management. It also promotes improved customer service through expanded access to 

new self-correction capabilities and improved behavioral analytics. It allows the IRS to 

better understand and change non-compliant taxpayer behavior. For FY 2020, the 

Repeat Non-Compliance Rate was 35.6 percent compared to 31.4 percent for FY 2019.

Time to Start 2017 2018 2019 2020

Collection 86.2% 86.7% 80.1% 85.6%

 Bal Due 90.1% 90.3% 90.5% 90.2%

AUR 0.1% 0.1% 0.1% 0.1%

Exam 40.9% 41.8% 39.3% 39.3%

Total 58.8%60.1%60.9%66.3%

Time to Resolve 2017 2018 2019 2020

Collection: Bal due 

notice 379 368 330 400 

Collection: non-notice 650 755 373 345 

AUR 556 581 602 618 

Exam 507 502 551 597 

Total 491 494 469 491 

Repeat Non-Compliance 

Rate 2017 2018 2019 2020

Reporting 7.3% 7.4% 7.7% 8.1%

Filing 39.1% 38.1% 39.8% 43.9%

Payment 30.0% 30.5% 29.9% 28.6%

Total 29.2% 30.0% 31.4% 35.6%
IRS - 73

Description of FY 2020 Performance ‒ Collection

The Collection program collects delinquent taxes, secures delinquent tax returns 

through the fair and equitable application of tax laws, and provides education to 

customers to promote future compliance. The performance goals that the IRS uses to 

gauge collection program performance are discussed below. 

The Collection Coverage measure is calculated by taking the total volume of collection 

work completed divided by total collection work available. Collection Coverage was 34.9 

percent, below the FY 2020 target of 39.7 percent because of a decrease in collection 

dispositions related to COVID-19 and a decrease in available inventory. Total new 

receipts were down 20 percent while available inventory decreased 11.7 percent. 

Collection coverage is expected to meet the FY 2021 and FY 2022 target of 33 percent 

based on the projected case closures calculated on the work and staffing plans.

The Cost to Collect to $100 is 

computed as total operating 

costs divided by gross 

collection and then multiplied 

by 100. Total operating costs 

include dollars obligated, 

expended, and disbursed 

against appropriated funds, 

and excludes costs 

reimbursed by other federal 

agencies and private entities 

for services performed for 

these external parties. Gross 

collections are before refunds 

are issued and include 

penalties and interest in 

addition to taxes collected. For FY 2020, IRS total operating costs were approximately 

$12.3 billion while gross collections were approximately $3.45 trillion. The FY 2020 Cost 

to Collect $100 was 35 cents—24 percent below the 61-year average cost of 46 cents.
IRS - 74

FY 2022 Changes by Budget Activity

2.1.4 – Budget and Performance Report and Plan

Dollars in thousands

Exam and Collections FTE Amount

FY 2021 Operating Plan 30,987 $4,120,886

Changes to Base:

Maintaining Current Levels (MCLs) $122,895

Pay Annualization (1.0% average pay raise) 9,764

Pay Raise (2.7% average pay raise) 79,287

Non-Pay 4,828

FERS Contribution Increase 29,016

Subtotal FY 2022 Changes to Base $122,895

FY 2022 Current Services 30,987 $4,243,781

Program Increases:

Putting Taxpayers First 94 $36,047

Taxpayer Experience Strategy 94 36,047

Ensure Fairness of the Tax System 1,656 217,881

Subtotal FY 2022 Program Increases 1,750 $253,928

Total FY 2022 Request (Before PIAA) 32,737 $4,497,709

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 1,750 $376,823

Percent Change FY 2022 Request over FY 2021 Operating Plan 5.65% 9.14%

Dollars in thousands

Exam and Collections FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating Plan Request

Appropriated Resources1 $3,945,578 $3,901,041 $3,875,098 $3,907,290 $3,933,597 $4,120,886 $4,497,709

Reimbursable Resources2 456 450 3,289 240 249 27 28

User Fees2 36 42 2,454

Budget Activity Total $3,946,070 $3,901,491 $3,878,387 $3,907,572 $3,936,300 $4,120,913 $4,497,737

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

Exam and Collections FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measures Actual Actual Actual Actual Actual Target Target Target

Examination Coverage - Individual (Oe)1 0.7% 0.6% 0.6% 0.45% 0.29% 0.48% Discontinued Discontinued 

Examination Coverage - Business (Assets > $10 million) 

(Oe)1 3.0% 2.5% 2.2% 1.6% 1.3% 1.7% Discontinued Discontinued 

Examination Efficiency - Individual (E) 143 121 131 109 76 115 111 117

Automated Underreporter (AUR) Coverage (E)2 2.3% 2.2% 2.0% 1.3% 0.6% 1.7% Discontinued Discontinued 

Time to Start Compliance Resolution (E, L)3 58.8% 60.1% 60.9% 66.3% Indicator Indicator Indicator

Time to Resolve Compliance Issue After Filing (E)3 491 494 469 491 Indicator Indicator Indicator

Repeat Non-Compliance Rate (Ot)3 29.2% 30% 31.4% 35.6% Indicator Indicator Indicator

Collection Coverage - Units (Ot) 43.4% 42.2% 41.6% 41.3% 34.9% 39.7% 33.0% 33.0%

Cost to Collect $100 (E) $0.35 $0.34 $0.34 $0.33 $0.35 Indicator Indicator Indicator 

1Requested discontinuing measure for FY 2021 budget reporting; new measures under development for FY 2021

2Discontinued in FY 2020

3New measure added for FY 20; historical data provided for comparative purposes.

Key: Oe - Outcome Measure, E - Efficiency Measure, L - Strategic Plan Goal, Ot - Output/Workload Measure
IRS - 75

2E – Regulatory

($191,509,000 in direct appropriations and an estimated $303,000 from reimbursable 

programs): This budget activity funds the development of published IRS guidance 

materials; interpretation of tax laws; internal advice to IRS on general non-tax legal 

issues; enforcement of regulatory rules, laws, and approved business practices; and 

support for taxpayers in the areas of pre-filing agreements, determination letters, and 

advance pricing agreements. The activities include: 

• Tax Law Interpretation and Published Guidance interprets tax law through 

published guidance, technical advice, and other technical legal services. 

• General Legal Services provides advice to the IRS on non-tax legal issues, 

including procurement, personnel, labor relations, equal employment 

opportunity, fiscal law, tort claims and damages, ethics, and conflict of interest. 

• Rulings and Agreements applies the tax law to specific taxpayers in the form of 

pre-filing agreements, determination letters, advance pricing agreements, and 

other pre-filing determinations and advice. 

• International Regulatory Legal Support supports Counsel’s work in tax law 

interpretation and rulings and agreements related to international issues. 

• Return Preparer Strategy provides staffing, training, and direct support associated 

with the Return Preparer Strategy. 

• Office of Professional Responsibility identifies, communicates, and enforces 

Treasury Circular 230 standards of competence, integrity, and conduct of those 

who represent taxpayers before the IRS, including attorneys, Certified Public 

Accountants (CPAs), enrolled agents, enrolled actuaries and appraisers, and other 

professionals. 
IRS - 76

Description of FY 2020 Performance - Regulatory

In FY 2020, IRS published 172 items: 120 Priority Guidance Plan (PGP) projects and 

52 ministerial rulings. Ministerial projects are publications that only involve ministerial 

matters (such as applicable federal interest rates and monthly bond factor amounts). 

They are usually published on an annual basis. Many items published in FY 2020 

involved complex and novel issues. For example, four of the published items pertain to a 

provision revised by the Tax Cuts and Jobs Act (TCJA) limiting the business interest 

deduction. Two items addressed the new Opportunity Zone provisions of the TCJA, 

which provide preferential tax treatment to investments made in economically 

distressed communities. Over twenty items were published to implement the Families 

First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic 

Security Act (CARES) and provided relief in response to the COVID-19 pandemic 

emergency. The 2020-2021 PGP, published on November 17, 2020 and covering July 

2020 through June 2021, lists 191 projects.

To help improve the taxpayer experience, the IRS remains firmly committed to educating 

tax professionals about their responsibilities and limitations under Treasury Department 

Circular 230, Regulations Governing Practice before the Internal Revenue Service 

(Circular 230), and their ethical obligations to taxpayers and tax administration . A 

regulation project is underway to revise Circular 230 to, reflect adverse litigation and 

align its rules with modern practice standards. In addition, the Administration has 

proposed legislation to allow the IRS to regulate paid tax return preparers by imposing 

minimum standards, thereby increasing the quality of return preparation and related 

advice provided to taxpayers. These standards will also enable the agency to more 

effectively combat the problems to tax administration caused by untrained and 

unscrupulous preparers.

During FY 2020, the IRS performed its outreach activities through in-person and virtual 

presentations conducted through on-line webinars, telephonic operations, and 

electronic media. The IRS created a new webinar titled, The Office of Professional 

Responsibility: Circular 230 and What You Need to Know About Practicing before the 

IRS, viewed by more than 11,300 tax professionals. The IRS educated tax professionals 

about Circular 230 provisions at numerous events, including the IRS Nationwide Tax 

Forums. In FY 2020, the IRS reached nearly 31,900 tax professionals and IRS employees 

during 25 events, which consisted of in-person, telephonic, and electronic media.
IRS - 77

FY 2022 Changes by Budget Activity

2.1.5 – Budget and Performance Report and Plan

Dollars in thousands

Regulatory FTE Amount

FY 2021 Operating Plan 990 $185,543

Changes to Base:

Maintaining Current Levels (MCLs) $5,124

Pay Annualization (1.0% average pay raise) 394

Pay Raise (2.7% average pay raise) 3,203

Non-Pay 382

FERS Contribution Increase 1,145

Subtotal FY 2022 Changes to Base $5,124

FY 2022 Current Services 990 $190,667

Program Increases:

Ensure Fairness of the Tax System 4 $842

Subtotal FY 2022 Program Increases 4 $842

Total FY 2022 Request (Before PIAA) 994 $191,509

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 4 $5,966

Percent Change FY 2022 Request over FY 2021 Operating Plan 0.40% 3.22%

Dollars in thousands

Regulatory FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating Plan Request

Appropriated Resources1 $137,245 $131,662 $170,222 $174,624 $157,374 $185,543 $191,509

Reimbursable Resources2 202 160 593 412 252 287 303

User Fees2 9,233 9,537

Budget Activity Total $146,680 $141,359 $170,815 $175,036 $157,626 $185,830 $191,812

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.
IRS - 78

Operations Support

Appropriation Description 

The Operations Support appropriation provides funding for overall planning, direction, 

and support for the IRS, including shared service support related to facilities services, 

rent payments, printing, postage, and security. This appropriation funds headquarters 

policy and management activities such as corporate support for strategic planning; 

communications and liaison; finance; human resources; equity, diversity, and inclusion; 

research and statistics of income; and necessary expenses for information systems and 

telecommunication support, including development, security, and maintenance of the 

IRS’s information systems. 

The Operations Support budget request for FY 2022 is $4,448,195,000 in direct 

appropriations and 12,193 FTE, excluding the proposed program integrity allocation 

adjustment. This is an increase of $344,093,000, or 8.38 percent, and 156 FTE more than 

the FY 2021 Operating Plan level of $4,104,102,000 and 12,037 FTE (post-transfer).
IRS - 79

2.1 – Budget Adjustments Table

Dollars in thousands

Operations Support

Summary of Proposed FY 2021 Request FTE Amount

FY 2021 Operating Plan 12,037 $4,104,102

Changes to Base:

Maintaining Current Levels (MCLs) $100,219

Pay Annualization (1.0% average pay raise) 4,699

Pay Raise (2.7% average pay raise) 38,157

Non-Pay 42,546

FERS Contribution Increase 14,817

Efficiencies/Savings: ($91)

Increase e-File Savings (91)

Subtotal FY 2022 Changes to Base $100,128

FY 2022 Current Services 12,037 $4,204,230

Program Changes:

Program Increases

Putting Taxpayers First 143 104,333

Taxpayer Experience Strategy 143 104,333

Ensure Fairness of the Tax System 13 69,409

Improve Live Assistance 69,833

Electric Vehicles and Associated Infrastructure 390

Subtotal FY 2022 Program Increases 156 $243,965

Total FY 2022 Budget Request 12,193 $4,448,195

PIAA Program Increases

Increase Audit Coverage 15 39,493

Increase Collection Coverage 20 46,334

Expand Coverage in the Tax-Exempt Sector 7,998

Enhance Return Review Program 34,953

Enhance Enforcement Operations 667

Subtotal FY 2022 PIAA Program Increases 35 $129,445

Total FY 2022 Request 12,228 $4,577,640

See footnotes in 1.1 -- Appropriations Detail Table
IRS - 80

2.2 – Object Classification Obligations

Dollars in thousands

Operations Support

Object Classification

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

11.1 Full-Time Permanent Positions 1,318,072 1,339,822 1,404,468

11.3 Other than Full-Time Permanent Positions 5,990 5,350 5,536

11.5 Other Personnel Compensation 19,400 33,940 35,886

11.8 Special Personal Services Payments 172 181 185

11.9 Personnel Compensation (Total) 1,343,634 1,379,293 1,446,075

12.1 Personnel Benefits 441,837 483,805 515,146

13.0 Benefits to Former Personnel 57 30 31

Total Personnel and Compensation Benefits $1,785,528 $1,863,128 $1,961,252

21.0 Travel 16,823 7,938 10,161

22.0 Transportation of Things 14,068 14,036 15,333

23.1 Rental Payments to GSA 590,108 579,736 602,332

23.2 Rent Payments to Others 11,833 6,914 7,147

23.3 Communications, Utilities, & Misc 317,460 311,545 350,039

24.0 Printing & Reproduction 20,283 19,746 20,984

25.1 Advisory & Assistance Services 490,855 638,496 686,961

25.2 Other Services 30,051 29,188 44,673

25.3 Purchase of Goods & Services from Govt. Accounts 71,176 56,744 63,564

25.4 Operation & Maintenance of Facilities 186,179 199,037 215,468

25.6 Medical Care 14,267 14,973 16,943

25.7 Operation & Maintenance of Equipment 61,774 66,088 73,796

26.0 Supplies and Materials 9,145 7,240 10,501

31.0 Equipment 227,335 255,972 317,302

32.0 Land and Structures 37,632 32,645 50,778

42.0 Insurance Claims & Indemnities 483 676 961

91.0 Unvouchered

Total Non-Personnel $2,099,472 $2,240,974 $2,486,943

New Appropriated Resources $3,885,000 $4,104,102 $4,448,195

Budget Activities:

Infrastructure 881,670 886,713 971,008

Shared Services & Support 990,690 1,024,654 1,088,217

Information Services 2,012,640 2,192,735 2,388,970

New Appropriated Resources $3,885,000 $4,104,102 $4,448,195

FTE 12,036 12,037 12,193

See footnotes in 1.1 -- Appropriations Detail Table

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million 

under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated 

Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million 

Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.
IRS - 81

2.3 – Appropriation Detail Table

2F – Infrastructure

($971,008,000 in direct appropriations and an estimated $1,235,000 from reimbursable 

programs): This budget activity funds administrative services related to space and 

housing, rent and space alterations, building services, maintenance, guard services, and 

non-IT equipment. The program activities include:

• Building Delegation oversees and manages the IRS GSA-delegated buildings, 

including cleaning, maintenance, utilities, protection, administrative, and 

recurring and one-time repair costs. 

• Rent provides resources for all IRS rent needs. 

• Space and Housing/Non-IT Equipment provides management of all IRS building 

services, maintenance, space alterations, guard services, custodial overtime, utility 

service needs, and non-IT equipment. 

• Security covers all physical security costs, including guard services, security 

equipment and maintenance, countermeasures, Homeland Security Presidential 

Directive 12 (HSPD-12) and Treasury Enterprise Identity Credential and Access 

Management (TEICAM). 

Dollars in thousands

Operations Support

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Infrastructure 881,670 886,713 971,008 84,295 9.51%

Shared Services and Support 4,947 990,690 5,122 1,024,654 5,140 1,088,217 18 63,563 0.35% 6.20%

Information Services 7,023 2,012,640 6,915 2,192,735 7,053 2,388,970 138 196,235 2.00% 8.95%

Subtotal New Appropriated Resources 11,970 $3,885,000 12,037 $4,104,102 12,193 $4,448,195 156 $344,093 1.30% 8.38%

Other Resources:

Reimbursables 81 64,571 71 71,864 73 75,816 2 3,952 2.82% 5.50%

Offsetting Collections - Non Reimbursables

User Fees 4 374,671 15 455,844 15 431,500 (24,344) -5.34%

Recovery from Prior Years 2,104 10,328 10,328

Recoveries Paid 6 6

Unobligated Balances from Prior Years 66,455 87,247 90,238 2,991 3.43%

Transfers In/Out

Resources from Other Accounts 2 26,849 27,211 362 1.35%

Subtotal Other Resources 87 $507,801 86 $652,138 88 $635,099 2 ($17,039) 2.33% -2.61%

Total Budgetary Resources 12,057 $4,392,801 12,123 $4,756,240 12,281 $5,083,294 158 $327,054 1.30% 6.88%

See footnotes in 1.1--Appropriations Detail Table

FY 2020 to FY 2021 

Request

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security 

(CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 

million Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.

FY 2021 to FY 2022 

Request

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

Change % Change
IRS - 82

Description of FY 2020 Performance - Infrastructure

Rent

The Rentable Square Feet per Person is the amount of rentable square feet the IRS 

maintains per person requiring space. After payroll, rent is the IRS’s largest operating 

expense; therefore, the IRS continues to take steps to reduce its total office space. 

Through FY 2020, the Rentable Sq. Ft. per Person was 278 compared to 298 in FY 2019. 

The IRS continued to use data to select the best opportunities to release excess facility 

space by leveraging the timing of expiring leases and planned renovation projects, and 

by analyzing IRS housing needs to plan building closures and consolidations. In FY 2020, 

the IRS released 600,000 square feet of space including the closure of eight buildings 

from its portfolio and the closure of the former submission processing building in 

Covington, Kentucky. The FY 2021 target is set at 280 sq. ft. while the FY 2022 target is 

270 sq. ft.

Security

Security of taxpayer data and providing a secure environment for employees are of 

utmost importance to the IRS. Unlike any other filing season, the IRS had to modify key 

operations in response to the COVID-19 pandemic, such as closing Taxpayer Assistance 

Centers, tax processing centers, and offices nationwide. Nonetheless, core IRS functions 

continued, and the IRS continued to deliver the filing season.

Throughout the COVID-19 pandemic, technology was the cornerstone of the IRS’s ability 

to continue mission-critical work to support the American taxpayer. In FY 2020, the IRS 

ensured continuity of services and support to taxpayers by: 

• Accelerating an initiative to enable customer service representatives (CSR) and tax 

examiners (TE) to telework. By June 2020, the IRS had supplied telework 

equipment for more than 11,300 CSRs and TEs, representing about 81 percent of 

this workforce. 

• Establishing the Crisis Relief Hotline, a voice mailbox for the IRS Chief Counsel to 

address taxpayer concerns related to COVID-19 relief. 

• Standing up a new phone line to answer the most common questions about 

Economic Impact Payments.

• Supplying about 20,000 laptops to newly teleworking employees, enabling 

continuity of critical services. 

• Delivering an IRS-wide solution to enable secure email with attachments. This 

enables taxpayers and the IRS to communicate electronically and exchange 

information securely. 

• Expanding enterprise electronic fax capabilities to support existing programs, 

such as income verification express service and setting up new fax numbers to 
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support advanced refundable credits, Small Business Administration disaster 

claims, and other tax forms as part of the CARES Act. The IRS can accept 90,000 

faxes a day. 

The IRS worked on several initiatives related to the Security Summit, a collaborative 

effort between the IRS, state tax administrators and private-sector tax partners. In FY 

2020, the IRS:

• Held its annual Security Summit meeting in December 2019. The Security Summit 

continues to demonstrate the strength of the public-private partnership to 

combat identity theft.

• Continued the Identity Theft Tax Refund Fraud – Information Sharing and 

Analysis Center (ISAC) initiative, which is an important platform for the IRS and its 

partners in their daily efforts to combat identity theft by sharing current data on 

emerging trends.

• Hosted a Virtual Currency Summit that brought together stakeholders to discuss 

virtual currency industry issues and subsequently issued several pieces of 

guidance, including Notice 2014-21 and Revenue Ruling 2019-24. The IRS sent 

about 10,000 letters to virtual currency owners advising them to file amended 

returns and pay back taxes if they omitted or inaccurately reported virtual 

currency transactions.

FY 2022 Changes by Budget Activity

Dollars in thousands

Infrastructure FTE Amount

FY 2021 Operating Plan $886,713

Changes to Base:

Maintaining Current Levels (MCLs) $17,868

Pay Annualization (1.0% average pay raise) 1

Pay Raise (2.7% average pay raise) 7

Non-Pay 17,859

FERS Contribution Increase 1

Efficiencies/Savings $1

Personnel Savings 1

Subtotal FY 2022 Changes to Base $17,869

FY 2022 Current Services $904,582

Program Increases:

Putting Taxpayers First 3,743

Taxpayer Experience Strategy 3,743

Ensure Fairness of the Tax System 29,340

Improve Live Assistance 33,343

Subtotal FY 2022 Program Increases $66,426

Total FY 2022 Request (Before PIAA) $971,008

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan $84,295

Percent Change FY 2022 Request over FY 2021 Operating Plan 9.51%
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2.1.6 – Budget and Performance Report and Plan

2G – Shared Services and Support

($1,088,217,000 in direct appropriations, and an estimated $35,558,000 from 

reimbursable programs): This budget activity funds policy management, IRS-wide 

support for research, strategic planning, communications and liaison, finance, human 

resources, and equity, diversity, and inclusion programs. It also funds printing and 

postage, business systems planning, security, legal services, and procurement. The 

program activities include:

• National Headquarters Management and Administration directs the 

management activities of strategic planning, communications and liaison, 

finance, human resources, equity, diversity and inclusion programs, business 

systems planning, embedded training, and the Treasury Franchise Fund. It sets 

policies and goals, provides leadership and direction for the IRS, and builds 

partner relationships with key stakeholders (Congress, GAO, and OMB). It 

provides policy guidance for conducting planning and budgeting strategies, 

conducting analyses of programs and investments to support strategic 

decision-making, and developing and managing human resources. It also 

includes official reception and representation expenses. 

• Facilities Management & Security Services provides facilities and security 

services to deliver a safe, secure, and optimal work environment to IRS 

employees. 

• Procurement supports the procurement function of the IRS. 

Dollars in thousands

Infrastructure FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating 

Plan Request

Appropriated Resources1 $838,048 $856,655 $870,360 $891,140 $867,354 $886,713 $971,008

Reimbursable Resources2626 634 662 681 747 1,170 1,235

User Fees2999

Budget Activity Total $838,674 $857,289 $871,022 $892,820 $868,101 $887,883 $972,243

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

Infrastructure FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measure Actual Actual Actual Actual Actual Target Target Target

Rentable Square Feet per Person (Ot, L) 297 301 298 278 298 280 270

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and interappropriation transfers.

Key: Ot - Output/Workload Measure L - Strategic Plan Goal
IRS - 85

• Equity, Diversity, and Inclusion Field Services provides staffing, training, and 

direct support to plan and manage the IRS’s Equity, Diversity, and Inclusion 

program. 

• Communications and Liaison coordinates local government and liaison 

relationships; handles congressional, state, and national stakeholder 

relationships and issues; coordinates cross-cutting issues, including managing 

audits and legislative implementation; handles national media contacts and 

local media relationships; and ensures IRS-wide compliance with disclosure and 

privacy laws. 

• Employee Support Services plans and manages financial services, including 

relocation, travel, purchase cards, corporate express, and employee clearances. 

• Treasury Complaint Centers plan and manage the Treasury Complaint centers. 

• Shared Support not provided by Facilities Management & Security Services 

provides resources for shared cross-functional support, such as postage meters, 

shredders, courier services, and post office boxes. 

• Printing and Postage – Media and Publications provides operating divisions 

with printing and postage, including shipping of taxpayer and internal-use 

materials. 

• Statistics of Income provides resources for researching annual income, financial, 

and tax data from tax returns filed by individuals, corporations, and tax-exempt 

organizations. 

• Research provides resources for market-based research to identify compliance 

issues, for conducting tests of treatments to address noncompliance, and for 

the implementation of successful strategies to address taxpayer noncompliance 

behavior. 

• Protection of Sensitive Information manages and oversees the staffing, training, 

equipment, and direct support for the protection of IRS employees, facilities, 

and assets, and the protection and proper use of identity information. 

• W&I Business Modernization Support provides staffing, training, and support 

for W&I’s enterprise-wide business modernization efforts, including reengineered business processes. 
IRS - 86

Description of FY 2020 Performance – Shared Services and Support

Operations Support continues to provide shared services to all IRS programs. 

Human Capital 

The future of the IRS depends on a workplace culture that empowers employees to 

improve the taxpayer experience and uphold the tax code fairly. In FY 2020, the IRS: 

• Developed practical COVID-19 safety measures that included temporarily 

scaling back in-person meetings, closing Taxpayer Assistance Centers, and 

suspending telephone lines. The IRS frequently reminded employees that tools 

were available to them through the Employee Assistance Program (EAP) and 

encouraged them to use the EAP. Frequent town halls, news alerts, and humaninterest features in monthly publications encouraged all employees to stay in 

touch during the pandemic period. 

• Revitalized its Enterprise Workforce Planning Program (WFP) to improve 

talent management agency-wide, with an agile IRS workforce responsive to 

current and future operational requirements and changes as its primary goal. The 

Enterprise WFP promotes integrating human capital management business 

strategies, processes, and procedures to inform Talent Management function and 

enables the delivery of a sustainable workforce planning capability.

• Developed and deployed Career+ career pathing and career broadening 

experiences. The newly created Enterprise Talent Development Program provides 

career management for similar occupational series to align career goals with 

developmental and training opportunities.

• Entered a new partnership with Gallaudet University to expand Disability 

Service Division employees’ knowledge and understanding of the “deaf culture” 

customer experience and expectations. In fostering a diverse and inclusive 

workforce, the IRS encouraged employees to self-identify known disabilities and 

update the human resources system to obtain accurate demographics for IRS 

employees with disabilities. 

Research 

The IRS invests in research projects to help its leaders make data and evidence-driven 

improvements to IRS operations and taxpayer services. In FY 2020, the IRS:

• Developed new features for the graph database that included a pattern search 

capability and enhanced reporting on specific compliance issues. The graph data 

environment currently supports identity theft detection, evaluations of money 

laundering issues for field examination, with a planned expansion to detect 

changes in the tax structures of large corporations.
IRS - 87

• Developed its first learning agenda, which outlines key research questions that 

align to its FY 2018-2022 Strategic Plan goals and objectives. This was the first 

learning agenda of any bureau within Treasury and is a significant step in the 

implementation of the Foundations for Evidence-Based Policymaking Act of 2018.

• Created a forecasting tool to leverage sets of data to provide a balanced 

workforce planning approach. Data sets used in the forecasting tool included 

projected retirements and anticipated hiring and training needs to accurately 

identify human resource needs.

• Developed data-driven methodologies to prioritize and validate IRS Mission 

Critical positions. The results of this initiative inform the IRS’s initial workforce 

planning service delivery model and business processes.

FY 2022 Changes by Budget Activity

Dollars in thousands

Shared Services and Support FTE Amount

FY 2021 Operating Plan 5,122 $1,024,654

Changes to Base:

Maintaining Current Levels (MCLs) $29,687

Pay Annualization (1.0% average pay raise) 1,829

Pay Raise (2.7% average pay raise) 14,853

Non-Pay 7,167

FERS Contribution Increase 5,838

Efficiencies/Savings ($10,057)

Personnel Savings (10,057)

Subtotal FY 2022 Changes to Base $19,630

FY 2022 Current Services 5,122 $1,044,284

Program Increases:

Putting Taxpayers First 5 1,760

Taxpayer Experience Strategy 5 1,760

Ensure Fairness of the Tax System 13 16,096

Improve Live Assistance 6,840

Convert Vehicle Fleet to Electric 390

Subtotal FY 2022 Program Increases 18 $25,086

Total FY 2022 Request (Before PIAA) 5,140 $1,069,370

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 18 $44,716

Percent Change FY 2022 Request over FY 2021 Operating Plan 0.35% 4.36%
IRS - 88

2.1.7 – Budget and Performance Report and Plan

2H – Information Services

($2,388,970,000 in direct appropriations, $39,023,000 in reimbursable resources, and 

$431,500,000 from user fees): This budget activity funds staffing, equipment, and related 

costs to manage, maintain, and operate the information systems critical to the support 

of tax administration programs. This includes the design and operation of security 

controls and disaster recovery planning. This budget activity funds the development and 

maintenance of the millions of lines of programming code that support all aspects and 

phases of tax processing and the operation and administration of mainframes, servers, 

personal computers, networks, and a variety of management information systems. The 

program activities include: 

• Enterprise Program Management Office (EPMO) provides oversight and project 

integration into daily IT processes for large-scale development, modernization,

and enhancement projects. It enables a coordinated, cross-functional project 

planning, implementation and performance assessment effort aimed at 

improving IT systems quality, cost, and delivery schedule. 

• Security Services ensures effective security policies and programs to safeguard 

taxpayer records, IRS employees, facilities, business processes, systems, and other 

resources. The program is responsible for corrective action efforts to establish 

adequate IRS-wide security, including Security Policy Support and Oversight, 

Mission Assurance, and Modernization Security. 

• IT Executive Oversight provides support to the immediate Office of the Chief 

Information Officer, and the Stakeholder Management (including program 

oversight). The program provides executive direction for the IT organization, 

enabling IT to be a customer-focused supplier of IT solutions that is responsive to 

customer business priorities and meets functional and operational needs 

effectively. 

Dollars in thousands

Shared Services and Support FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating 

Plan Request

Appropriated Resources1 $1,090,192 $964,702 $920,283 $900,287 $961,999 $1,024,654 $1,088,217

Reimbursable Resources219,443 19,194 27,995 30,360 27,368 33,705 35,558

User Fees2

1,000 1,000 1,000

Budget Activity Total $1,110,635 $984,896 $949,278 $930,647 $989,367 $1,058,359 $1,123,775

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation 

transfers.
IRS - 89

• Application Development performs the analysis, design, development, testing, 

and implementation of about 85,000 application programs supporting critical tax 

processing, management information reporting and financial management 

support systems for the IRS. This program also supports external trading partner 

data exchanges with federal government agencies, state and local governments, 

and other third-party entities. The program controls application source code and 

deploys applications to the production environment. 

• Enterprise Operations provides efficient and reliable computing services for all 

IRS business entities and taxpayers including the deployment and maintenance of 

infrastructure that supports critical tax processing, management information 

reporting, and financial management support systems for the IRS. It also includes 

a comprehensive disaster recovery capability to ensure continued operations in 

the event of a major interruption of service. 

• Enterprise Network provides telecommunications service delivery to all customer 

segments, including management of day-to-day operations of the 

telecommunications environment. This includes the operation of equipment and 

services to meet business user needs and the execution of routine changes for 

scheduled and unscheduled modifications to the telecommunications 

infrastructure and applications. It addresses all phases of engineering, acquisition, 

implementation, and operation of telecommunications systems and services, 

including voice, video, and data communications. 

• Enterprise Services (ES) plans and manages service and delivery methods used 

across the IT organization, including defining the current and target technology 

architecture and developing the transition strategy towards the target 

environment. ES shares in the responsibility that translates enterprise and project 

objectives into targeted, actionable investments to provide the framework and 

direction for cohesive, successful modernization across the IT enterprise. ES also 

provides systems engineering services that promote standards-based, enterprise 

technology solutions and serves as the enterprise testing authority partnering 

with customers to improve the quality of IT systems, products, and services. Also, 

ES provides shared infrastructure that leverages reusable engineering design 

patterns and best practices for standardized, virtual, and secure environments. 

These environments allow multiple BSM projects to develop, test, deploy, 

operate, and monitor in a common approach. 

• End User & Network Services maintains the IRS automated business processes at 

headquarters and field sites, effectively allowing the IRS to fulfill its mission. The 

support includes technical systems and applications software support to end 

users, maintaining legacy operations, local and corporate systems administration 
IRS - 90

activities, email, and domain user account maintenance. This activity monitors IRS 

network and systems administration by utilizing automated management tools. It 

performs asset management activities, and maintenance of the voice and data 

infrastructure at the territory offices. 

• Strategy and Planning provides the management and oversight of investments in 

IT, demand analysis, project reporting, portfolio management, strategic planning, 

financial management, acquisition planning, and other IT operational priorities. It 

also provides expertise for requirements guidance, processes, procedures, and 

tools that allows for transformation of the IT enterprise. 

• Information Technology Security Certification and Accreditation provides design 

and operations of security controls and the technical mechanisms used by the IRS 

systems and applications as part of the development of the system security plan, 

system risk assessment, and IT contingency plan. It also supports security testing 

and evaluation as part of the certification process, including time preparing 

system documentation, interviewing contractors, and responding to information 

requests. 

• Disaster Recovery supports activities related to Enterprise Disaster Recovery 

planning, including testing, evaluations, plan development, and technical and 

business assessments. 

• Infrastructure Currency (IC) funds the upgrade or replacement of outdated and 

aged technology solutions related to the IT hardware, software, and applications 

development product portfolio. 

• IT Infrastructure centralizes the resources achieved through efficiencies in various 

parts of IT to ensure that replacement of the aging infrastructure is addressed 

corporately. 

Description of FY 2020 Performance – Information Services

The Percent of Aged Hardware is a measure that shows the quantity of IT hardware in 

operation past its useful life as a percentage of total hardware in use. The IRS made 

considerable progress reducing the percentage of aged hardware within the IT 

environment from 31 percent at the end of FY 2019 to 16 percent at the end of FY 2020 

which exceeded the goal of 30 percent. This represents a reduction of nearly 

18,000 aged assets during the fiscal year through efforts such as refreshing employee 

workstations.
IRS - 91

IRS will set the target at 20 percent and in FY 2021 and FY 2022. The IRS will monitor 

progress against FY 2021 aged hardware replacement targets.

FY 2022 Changes by Budget Activity

52.2% 52.3%

45.5%

31.0%

16.0%

0

50000

100000

150000

200000

2016 2017 2018 2019 2020

Percent of Aged Infrastructure

Amount of Aged Infrastructure Total Infrastructure

Dollars in thousands

Information Services FTE Amount

FY 2021 Operating Plan 6,915 $2,192,735

Changes to Base:

Maintaining Current Levels (MCLs) $52,663

Pay Annualization (1.0% average pay raise) 2,869

Pay Raise (2.7% average pay raise) 23,296

Non-Pay 17,520

FERS Contribution Increase 8,978

Efficiencies/Savings $9,965

Increase e-File Savings (91)

Personnel Savings 10,056

Subtotal FY 2022 Changes to Base $62,628

FY 2022 Current Services 6,915 $2,255,363

Program Increases:

Putting Taxpayers First 138 98,831

Taxpayer Experience Strategy 138 98,831

Ensure Fairness of the Tax System 23,973

Improve Live Assistance 29,650

Subtotal FY 2022 Program Increases 138 $152,454

Total FY 2022 Request (Before PIAA) 7,053 $2,407,817

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 138 $215,082

Percent Change FY 2022 Request over FY 2021 Operating Plan 2.00% 9.81%
IRS - 92

2.1.8 – Budget and Performance Report and Plan

Information Services Budget and Performance Plan

Dollars in thousands

Information Services FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating 

Plan Request

Appropriated Resources1 $1,883,667 $1,950,191 $2,390,357 $2,126,973 $1,972,916 $2,192,735 $2,388,970

Reimbursable Resources2 19,660 35,307 40,600 27,153 36,456 36,989 39,023

User Fees2 263,250 201,584 204,032 222,399 374,671 441,216 431,500

Budget Activity Total $2,166,577 $2,187,082 $2,634,989 $2,376,525 $2,384,043 $2,670,940 $2,859,493

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2The FY 2016 - FY 2020 columns represent realized resources for reimbursables and user fees.

Information Services FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measures Actual Actual Actual Actual Actual Target Target Target

Percent of Aged Hardware (Ot, L)1

52.2% 52.3% 45.5% 31.0% 16.0% 30.0% 20.0% 20.0%

Key: Ot - Output/Workload Measure L - Strategic Plan Goal

1The measure definition changed in FY 2018; removing certain asset categories (fax machines, low-end printers and scanners) that are no longer being actively refreshed 

from the calculation to more accurately define the inventory that’s reflective of risk to the IT environment
IRS - 93

Business Systems Modernization

Appropriation Description 

The Business Systems Modernization (BSM) appropriation provides resources for the 

planning and capital asset acquisition of IT to modernize the IRS business systems.

The BSM budget request for FY 2022 is $305,032,000 in direct appropriations and 412 

FTE, excluding the proposed integrity allocation adjustment. This amount is an increase 

of $82,308,000, or 36.96 percent, and 18 FTE more than the FY 2021 Operating Plan level 

of $222,724,000 and 394 FTE.

2.1 – Budget Adjustments Table

Dollars in thousands

Business Systems Modernization

Summary of Proposed FY 2021 Request FTE Amount

FY 2021 Operating Plan 394 $222,724

Changes to Base:

Maintaining Current Levels (MCLs) $4,165

Pay Annualization (1.0% average pay raise) 163

Pay Raise (2.7% average pay raise) 1,327

Non-Pay 2,232

FERS Contribution Increase 443

Subtotal FY 2022 Changes to Base $4,165

FY 2022 Current Services 394 $226,889

Program Changes:

Program Increases

Integrated Modernization Business Plan 18 $78,143

Subtotal FY 2022 Program Increases 18 $78,143

Total FY 2022 Budget Request 412 $305,032

See footnotes in 1.1 -- Appropriations Detail Table
IRS - 94

2.2 – Object Classification Obligations

Dollars in thousands

Business Systems Modernization

Object Classification

FY 2020

Actuals

FY 2021

Operating Plan

FY 2022

Request

11.1 Full-Time Permanent Positions 62,085 37,340 51,033

11.3 Other than Full-Time Permanent Positions 84 29 59

11.5 Other Personnel Compensation 563 224 367

11.9 Personnel Compensation (Total) 62,732 37,593 51,459

12.1 Personnel Benefits 16,643 12,535 17,027

Total Personnel and Compensation Benefits $79,375 $50,128 $68,486

21.0 Travel 219 411 172

25.1 Advisory & Assistance Services 90,948 163,523 195,212

25.2 Other Services 11

25.3 Purchase of Goods & Services from Govt. Accounts 4

25.7 Operation & Maintenance of Equipment 581 2,018 2,592

26.0 Supplies and Materials 7 2 1

31.0 Equipment 8,855 6,642 38,569

Total Non-Personnel $100,625 $172,596 $236,546

New Appropriated Resources $180,000 $222,724 $305,032

Budget Activities:

IT Investments 180,000 222,724 305,032

New Appropriated Resources $180,000 $222,724 $305,032

FTE 426 394 412

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million 

under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated 

Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million 

Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.

See footnotes in 1.1 -- Appropriations Detail Table
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2.3 – Appropriation Detail Table

2I – Business Systems Modernization

($305,032,000 in direct appropriations): This budget activity funds the planning and 

capital asset acquisition of information technology to modernize IRS business systems 

and processes, including labor and related contractual costs, in support of the IRS 

mission. The IRS is implementing its multiyear modernization plan to address the longterm sustainability and affordability of its technological environment, eliminating 

organizational silos, and driving efficiencies and cost savings throughout the enterprise. 

The plan defines the scope of capabilities, sets timelines, and targets, describes 

milestones, and includes outcome measures for each investment. 

Description of FY 2020 Performance - BSM

The IRS’s modernization efforts focus on building and deploying advanced information 

technology systems, processes, and tools to improve efficiency and productivity. Major 

IT investments are measured by the proportion of projects within +/- 10 percent of 

budgeted cost and schedule variance. The FY 2021 and FY 2022 targets for both 

measures are 90 percent. For more detail about BSM 2020 accomplishments and 2021 

performance goals, please see Publication 5453, Information Technology (IT) Annual Key 

Insights Report, February 2021: https://www.irs.gov/pub/irs-pdf/p5453.pdf. 

Dollars in thousands

Business Systems Modernization

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Business Systems Modernization 426 180,000 394 222,724 412 305,032 18 82,308 4.57% 36.96%

Subtotal New Appropriated Resources 426 $180,000 394 $222,724 412 $305,032 18 $82,308 4.57% 36.96%

Other Resources:

Reimbursables

Offsetting Collections - Non Reimbursables

User Fees 108,872 29,500 (29,500) -100.00%

Recovery from Prior Years 9,380 5,263 5,263

Recoveries Paid 203 203

Unobligated Balances from Prior Years 56 30,191 15 29,573 15 36,805 7,232 24.45%

Transfers In/Out

Resources from Other Accounts

Subtotal Other Resources 56 $148,443 15 $64,539 15 $42,271 ($22,268) -34.50%

Total Budgetary Resources 482 $328,443 409 $287,263 427 $347,303 18 $60,040 4.40% 20.90%

See footnotes in 1.1--Appropriations Detail Table

Change % Change

FY 2021 to FY 2022 Request

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic 

Security (CARES) Act (P.L. 116-36), the $509 million provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 

117-2), the $417 million Program Integrity Allocation Adjustment, and the $79 billion mandatory funding proposal.

FY 2020

Operating Plan

FY 2021

Operating Plan

FY 2022

Request

FY 2021 to FY 2022 

Request
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Percent of Major IT Investments within +/- 10 percent Cost Variance at the 

Investment Level: Sixteen of 19 major investments (84.2 percent) were within the cost 

variance threshold in FY 2020 failing to meet the target of 90 percent. Shown below are 

the three investments falling outside the +/- 10 percent cost variance.

• Account Management Services (AMS) – IRS allocated 10 fewer full time 

equivalent (FTEs) to the AMS project, resulting in a cost variance. The FY 2020 

labor budget initially allocated 70 FTE to the project.

• Customer Account Data Engine 2 (CADE 2) – This project called for two phases 

of design, development, and test activities. FY 2020 budgeted for the increased 

resources needed for phase two. In the first quarter of FY 2020, IRS decided to 

continue with phase one resource levels. The project stabilized with the phase 

one level of resources and IRS will not allocate additional resources to the 

project.

• Foreign Account Tax Compliance Act (FATCA) – IRS categorized the FATCA 

program as a “keep the lights on” only project, pausing enhancements originally 

planned. As a result, this project underran its cost for FY 2020. 

Percent of Major IT Investments within +/- 10 percent Schedule Variance at the 

Investment Level: Eighteen of 19 major investments (94.7 percent) were within the 

schedule variance threshold at the close of FY 2020 exceeding the target of 90 percent. 

Shown below is the one investment that fell outside the +/- 10 schedule variance.

• Modernized IRS Operations Investment – IRS funds multiple modernization 

programs. Components of this investment were ahead of schedule causing a 

positive variance greater than 10 percent. 

IRS IT will closely monitor cost and schedule reporting for investments in FY 2021 to 

improve current performance levels for this measure.
IRS - 97

FY 2022 Changes by Budget Activity

2.1.9 – Budget and Performance Report and Plan 

Dollars in thousands

Business Systems Modernization FTE Amount

FY 2021 Operating Plan 394 $222,724

Changes to Base:

Maintaining Current Levels (MCLs) $4,165

Pay Annualization (1.0% average pay raise) 1,490

Non-Pay 2,232

FERS Contribution Increase 443

Subtotal FY 2022 Changes to Base $4,165

FY 2022 Current Services 394 $226,889

Program Increases:

IRS Integrated Modernization Business Plan 18 78,143

Subtotal FY 2022 Program Increases 18 $78,143

Total FY 2022 Request (Before PIAA) 412 $305,032

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan 18 $82,308

Percent Change FY 2022 Request over FY 2021 Operating Plan 4.57% 36.96%

Dollars in thousands

Business Systems Modernization FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Resource Level Actual Actual Actual Actual Actual Operating 

Plan Request

Appropriated Resources1 $190,945 $166,263 $110,000 $150,000 $180,000 $222,724 $305,032

Reimbursable Resources2

User Fees 25,464 77,418 89,713 108,872 29,500

Budget Activity Total $190,945 $191,727 $187,418 $239,713 $288,872 $252,224 $305,032

2The FY 2016 - FY 2020 columns represent realized resources for reimbursable resources and user fees.

Business Systems Modernization FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 FY 2021 FY 2022

Measures Actual Actual Actual Actual Actual Target Target Target

76.2% 50.0% 72.2% 88.9% 84.2% 90.0% 90.0% 90.0%

85.7% 88.9% 83.3% 88.9% 94.7% 90.0% 90.0% 90.0%

Key: E - Efficiency Measure

1The FY 2016 - FY 2020 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

Percent of Major IT Investments within +/- 10% Cost 

Variance at the Investment Level (E)1

Percent of Major IT Investments within +/- 10% Schedule 

Variance at the Investment Level (E)1
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B - FY 2020 - FY 2022 IRS Integrated Modernization Business Plan PillarBusiness Systems Modernization

Dollars in thousands

Funding

Category1

FY 2020 

 Actuals 

FY 2021 

Operating 

Plan

FY 2022 

CJ Submission

FY 2020 Actuals / FY 2021 Operating Plan / FY 2022 CJ Submission 150,436 222,724 305,032

Carryover Balance2 39,511 29,756 0

User Fees 108,939 29,500 0

Total Funding $298,886 $281,980 $305,032

Capital 233,385 208,906 232,336

Support 225 105 178

Labor 65,276 64,117 68,486

Subtotal Spend $298,886 $273,128 $301,000

 FTE 354 394 412

Management Reserve 0 8,852 4,032

Total Spend plus MR $298,886 $281,980 $305,032

Web Applications $30,266 $32,945 $30,000

Capital 20,769 21,242

16,200

Support

46 3

0

Labor 9,451 11,700

13,800

FTE

54 81 95

Taxpayer Digital Communications Outbound Notification (TDC-ON) $3,103 $8,255 $10,000

Capital 2,435 6,555 9,000

Support 0 0 0

Labor 668 1,700 1,000

FTE 4 11 6

Live Assistance $107 $0 $15,000

Capital 0 0 12,000

Support 0 0 0

Labor 107 0 3,000

FTE 1 0 18

Taxpayer Experience - Subtotal $33,476 $41,200 $55,000

FTE 58 92 119

Customer Account Data Engine (CADE 2) $95,908 $100,000 $100,000

Capital 70,635 76,767 76,227

Support 23 52 52

Labor 25,250 23,181 23,721

FTE 138 136 139

Customer Account Data Engine (CADE 2) Target State Capital $0 $0 $5,000

CADE 2 Target State will provide state-of-the-art individual taxpayer account processing and data-centric technologies 

for maintaining and balancing individual taxpayer account data to reduce operations & maintenance costs, improve 

taxpayer service quality, enhance responsiveness to legislative changes, and eliminate financial weaknesses. The 

program will allow the IRS to retire the most complex portion of the Individual Master File (IMF), a step towards fully 

retiring the IMF. 

Enterprise Case Management $63,143 $64,000 $64,000

Capital 48,031 43,318 43,475

Support 114 50 50

Labor 14,998 20,632 20,475

FTE 81 113 112

Core Taxpayer Services and Enforcement - Subtotal $159,051 $164,000 $169,000

FTE 219 249 251 Core Taxpayer Services and Enforcement

Providing modernized individual tax processing. Completion of the “Customer Account Data Engine” (CADE) Transition 

State 2 (TS2) will help modernize the technology environment that enables the IRS to process more than 150 million 

individual tax returns each year. This modernization enables enhanced data accessibility for online taxpayer services; 

implements the latest financial requirements and security controls; and, supports business units to deploy advanced 

analytical capabilities addressing key issues of compliance, fraud, and identity theft. Funding in FY 2022 will ensure the 

Individual Tax Processing Engine (ITPE) project, which is a key component of TS2, is able to convert approximately 

200,000 lines of legacy assembly language code to modern software language.

Providing a modernized case management platform . The IRS routinely interacts with individual taxpayers, small and 

large businesses, tax-exempt organizations, and a wide spectrum of intermediaries. The current case management 

environment, comprised of multiple systems that often do not communicate with each other, causes the IRS to treat 

each selected interaction as a separate case, which significantly limits the effectiveness and efficiency of each case 

interaction. This disconnect adds frustration and prolongs case resolution. Funding will ensure the complex 

undertaking of transitioning to an enterprise case management system with standard business processes. The main 

benefit is that authorized IRS employees will be able to see an individual taxpayer’s entire range of tax issues, relevant 

case data, and communications, which will ultimately resolve cases faster. Taxpayer Experience

Improving interactions and communications with taxpayers, the IRS, and third parties by providing a broad range of selfservice options, establishing secure information exchange, and building internal capabilities. By enabling authorized 

third parties and taxpayers to interact digitally with the IRS, the investment provides a better user experience and 

delivers consistent data and services. Web Apps continues to deliver additional capabilities to the taxpayer in FY 2022 

and beyond. Funding will expand on a broad range of digital services the taxpayer and their representatives can 

complete securely using their personal IRS online account. Taxpayers will be able to: update contact information, make 

tax payments; schedule and modify scheduled payments; store bank information, all within online account, thus 

improving revenue collection, and promoting voluntary compliance. 

Providing taxpayers access to fast, secure, and personalized digital communications delivered through a secure messaging 

platform. The IRS will continue developing digital notices available through a secure online account for taxpayers who 

prefer that channel over mailed correspondence. IRS will expand the capability to allow taxpayers the choice to opt in 

or opt out of receiving paper notices and receive notifications through email and text message when a notice is 

available. TDC-ON will allow the IRS to move away from paper-based notifications and allow taxpayers to navigate 

directly to IRS online payment tools, increasing the likelihood of taxpayer acts and expediting the resolution of taxrelated issues.

Implementation of Call Center technologies to improve the taxpayer experience. This includes both taxpayer-facing 

capabilities and infrastructure improvement to support the capabilities. Funding for Live Assistance ensures 

functionality that may include callback, live chat, automated chat, natural language processing, etc., which will help 

alleviate taxpayer frustration related to long wait times, when millions of phone calls are received each year via IRS' 

many toll-free numbers, especially during the filing season.
IRS - 99

1 Capital Investment funding: capital and contractor labor costs. Support funding: training, travel, supplies 

costs. Labor funding: IRS employee pay and benefits costs.

2 For the Carryover Balance, the FY 2021 Operating Plan amount reflects a reduction of $11.3K to account 

for BSM Management Reserve funding that was transferred to a Q-Fund to cover a prior year obligation.

3 Effective FY 2021, Core Infrastructure will be paid from the Operations Support appropriation because 

those expenses are enterprise costs and not specific to the BSM program.

Robotics Process Automation $983 $855 $0

Capital 607 606 0

Support 4 0 0

Labor 372 249 0

FTE 2 5 0

Application Program Interface (API) Implementation $0 $5,000 $0

Capital 0 4,730 0

Support 0 0 0

Labor 0 270 0

FTE 0 2 0

Cloud Execution $2,502 $10,000 $0

Capital 2,217 8,500 0

Support 3 0 0

Labor 282 1,500 0

FTE 1 9 0

Next Generation Infrastructure $226 $73 $15,000

Capital 0 0 14,000

Support 1 0 0

Labor 225 73 1,000

FTE 1 2 6

Modernized IRS Operations - Subtotal $3,711 $15,928 $15,000

FTE 5 17 6

Vulnerability and Threat Management $31,729 $23,171 $20,101

Capital 30,939 21,136 17,451

Support 0 0 0

Labor 790 2,035 2,650

FTE 5 12 18

Identity and Access Management $14,790 $9,123 $19,305

Capital 14,561 8,533 19,105

Support 0 0 0

Labor 229 590 200

FTE 1 4 2

Security Operations and Management $14,894 $13,705 $11,594

Capital 14,588 13,185 11,444

Support 32 0 0

Labor 274 520 150

FTE 1 3 1

Cybersecurity and Data Protection - Subtotal $61,413 $46,000 $51,000

FTE 7 19 21

Architecture, Integration, and Management $26,567 $6,000 $11,000

Capital 20,036 4,333 8,434

Support 2 0 76

Labor 6,529 1,667 2,490

FTE 33 10 15

Core Infrastructure3 $14,668 $0 $0

Capital 8,567 0 0

Support 0 0 0

Labor 6,101 0 0

FTE 32 0 0

Subtotal Supporting Projects $41,235 $6,000 $11,000

FTE 65 10 15 Cybersecurity and Data ProtectionEnabling proactive threat and vulnerability identification. This is achieved by using real-time intelligence information 

and analytics, enhance security testing and process automation, protect sensitive data at rest through encryption, and 

enhance both application and infrastructure audit capabilities to detect breaches and mitigate internal and external 

threats effectively. Funding will ensure the IRS focuses on preventing unauthorized access to tax accounts and 

unauthorized disclosure of taxpayer data. These capabilities provide full visibility into servers and endpoints for 

monitoring and analyzing data to identify and prevent threats. 

Preventing malicious and unintended access and disclosure of taxpayer and other sensitive data by establishing trusted 

and streamlined access to information through implementing Identity Access Management, Infrastructure Integrity, and 

Privilege Management capabilities. Identity and Access Management (IAM) refers to the processes, technologies and 

policies for managing users’ digital identities and controlling their use to access enterprise resources. 

Securing taxpayer data and systems. Funding security operations and management includes those activities needed to 

secure taxpayer data and the systems that handle or store that data through full visibility of hardware and software on 

the network, as well as enhance incident response and detection of internal threats to data and systems. Supporting Projects Provide system engineering management capabilities, including systems strategy, architecture, and engineering 

capabilities, across IT Infrastructure, Business Applications, Data Management, and IT Security. Provide portfolio 

control and management processes and tools, including governance, enterprise lifecycle support, tiered program 

management, and configuration/change management.

Provide shared infrastructure that leverages reusable engineering design patterns and best practices for standardized, 

virtual, and secure environments. These environments allow multiple BSM projects to develop, test, deploy, operate, 

and monitor in a common approach. Modernized IRS Operations

Automating repetitive, rule-based, manual tasks and mitigating human error risks. Robotic Process Automation (RPA) 

has emerged as an effective enabling technology to gain efficiencies by doing just this. Combining RPA with Artificial 

Intelligence (AI) has further enhanced opportunities to empower organizations to take on more complex processes and 

gain value through cognitive automation. The goal of the RPA program is to build the capability (i.e.; technology, 

people, and processes) for IRS to take advantage of these emerging technologies. IRS business units are highly 

motivated to find operational efficiencies to improve services and automate workflow for a wide range of taxpayers to 

significantly relieve administrative burden. Funding this effort will ensure that a series of initial limited use projects 

and activities will provide additional functionality and efficiency gains.

Leveraging cloud technologies to provide value and improved service to taxpayers. The IRS has adopted a cloud strategy, 

which aligns to the Federal strategy, and will migrate various workloads to the cloud as appropriate. Because the IRS 

can securely host tax applications in the cloud, even for major efforts like Enterprise Case Management, funding this set 

of capabilities will be critical to stabilizing the cost of operations and maintenance and further enhancing the agency’s 

security posture.

Providing a more efficient, scalable and flexible architecture. Funding will ensure the implementation of advanced IT 

infrastructure tools and technologies for compute, network and storage activities. The combination of these capabilities 

will help further automate and modernize the technology infrastructure and convert legacy code to modern 

programming languages.

APIs are a set of protocols, routines, functions and/or commands that programmers use to develop software or 

facilitate interaction between distinct systems. In response to growing demands to integrate systems internally and 

externally, the IRS plans to expand the use of APIs across its ecosystem. 
IRS - 100

C – Changes in Performance Measures

Performance Measure or Indicator Proposed Change and Justification

1. Rentable Square Feet per Person (RSFPP) –

modify

In previous budget submissions this measure was 

reported as an indicator with no target. IRS collected 

sufficient longitudinal data to set targets for this measure. 

RSFPP will be reported as a measure in the FY 2022 CJ.
IRS - 101

Section III – Supplemental Information

3.1 – Summary of Capital Investments

I. Introduction

The IRS Information Technology (IT) organization enables the business operations and 

modernization of the nation’s tax system. IT continues to provide the critical support 

needed as the IRS faces an ever-changing and complex tax administration environment. 

The IRS embraced the opportunity for change this year, significantly enhanced 

cybersecurity defenses, and delivered on modernization commitments. The IRS achieved 

its core mission while responding and adjusting to the needs of taxpayers and IRS 

employees facing the COVID-19 pandemic, which included extending the tax filing 

season, rapidly implementing economic impact payments and tax changes, and 

enabling a remote workforce. Simultaneously, the IRS implemented provisions of the 

Taxpayer First Act (TFA), which will significant improvements in the way the agency 

serves taxpayers, while continuing to enforce the tax laws in a fair and impartial manner. 

For IRS IT specifically, TFA implementation included developing a multi-year strategic 

plan (IT Strategic Plan), securing an independent validation and verification of major 

program plans, and implementing other provisions. The IRS IT Annual Key Insights 

Report summarizes major accomplishments delivered each year, as well as progress in

meeting key performance measures associated with the eight goals of the IRS IT 

Strategic Plan.

Given that approximately 96 percent of the gross receipts of the United States are 

processed through the IRS, the success of our country depends, in significant part, upon 

the continued success of IRS IT. The IRS Strategic Plan 2018-2022, the IT Strategic Plan, 

Enterprise Technology Blueprint, and IRS Integrated Modernization Business Plan set a 

foundation to articulate a vision for a 21st century IRS IT environment leveraging modern 

technologies and adopting IT best practices. The American Rescue Plan (ARP) Act of 

2021 provided $1.0 billion for IT modernization efforts reshape which will allow the IRS 

to modernize its technology landscape and improve cybersecurity across the IRS IT 

infrastructure. The Capital Investment Strategy outlines and expands the technology 

initiatives and IT investments to achieve this vision. The American Rescue Plan Act and 

Modernization section provides an overview of modernization enabled through the ARP. 

IV. The Enterprise Technology Blueprint section covers each of the existing 

Modernization Plan technology initiatives and IT investments. The Modernization 

Initiatives Alignment to IT Strategic Plan section presents how the initiatives and 

investments align to the IT Strategic Plan goals.
IRS - 102

II. IT Strategic Plan

As part of TFA, the IRS developed and is implementing a multi-year IT strategic plan that 

strengthens the agency’s ability to communicate and plan for long-term technology 

needs. The Plan to articulates the goals and objectives to achieve the IRS technology 

target state and deliver value to taxpayers. This plan is structured to address key factors 

driving the opportunity for change, including the need to meet the public’s 

expectations, simplify the existing IRS technology base, adopt emerging technology 

trends, stay ahead of cybersecurity threats, comply with federal mandates and 

guidelines, and support the workforce with the advanced technology training needed to 

stay current in their skills. The implementation of these goals and objectives is captured 

through the Annual Key Insights Report (AKIR) and the integrated enterprise 

architecture, which includes the Enterprise Technology Blueprint (ETB) and the Target 

Enterprise Architecture (TEA). Figure 2 summarizes IT’s strategic goals for FY 2020–2024. 

Figure 2 - IT Strategic Goals FY 2020-2024

The IT Strategic goals set the enterprise-wide technological priorities, which then inform 

the long-term technological vision published in the Enterprise Technology Blueprint.

III. Enterprise Technology Blueprint (ETB)

The Enterprise Technology Blueprint articulates the envisioned long-range technology 

environment and describes how technology will be employed in support of the strategic 

IRS business direction. The ETB depicts the adoption of advancing capabilities, 

modernizing applications and technical services within the IRS production environment. 
IRS - 103

The ETB is organized around the interrelated elements of the IRS Enterprise Architecture 

framework, as shown in Figure 3, to provide a cross-cutting frame of reference for 

analyzing the current state of IRS operations and to envision a future state. It is intended 

to facilitate dialogue among IRS business and IT leaders around future vision and 

priorities, align business and IT strategies, guide enterprise architecture planning and 

solutions development, and enable line of sight for evaluating investment proposals. 

The ETB also encompasses a set of interrelated views that depict the future of tax 

systems, IT operations, and IT services to achieve the IRS vision. The ETB is a living 

document that is continuously reviewed and updated as appropriate. 

Figure 3 IRS Enterprise Architecture Framework

In combination with the IRS and IT Strategic Plans, the ETB captures the enterprise vision 

for the IRS technology environment. The IRS Integrated Modernization Business Plan, 

described in Section VI, highlights specific technology initiatives and IT investments that 

realize this vision. 

IV. American Rescue Plan Act and Modernization

Funding provided in the American Rescue Plan (ARP) Act P.L. signed into law on March 

11, 2021 will allow the IRS to accelerate the current IRS modernization plan, transform 

foundational IRS technology to allow future innovation, and make meaningful 

improvements in taxpayer service and compliance. FY 2022 funding will support 

modernization progress across the following areas: 

• Taxpayer / Customer Experience: Enhances the taxpayer experience through 

modern platforms and capabilities aligned with the TFA Taxpayer Experience 

Strategy; expands availability for the Tax Pro portal; improves the customer 

experience for employees who support tax administration; accelerates access for: 
IRS - 104

multilingual taxpayers to IRS information/data, Enterprise Case Management 

(ECM), and Digitization efforts.

• Infrastructure: Accelerates IRS ability to leverage off-premise capabilities and 

efficiencies in the cloud; establishes off-premise infrastructure to house modern 

applications. 

• Security: Accelerates Cyber Security modernization efforts; accelerates Secure 

Access Digital Identity (SADI) expansion across all taxpayer facing applications.

• Data: Establishes new data platform to enable data analytics and data driven 

decisions across IRS for Services, Enforcement and Operations efforts; enables 

use of CADE2 data to provide near real-time access to modernized individual 

account data; expands use of intelligent automation (robotics, AI, and machine 

learning) to improve tax administration.

• Legacy Systems Modernization: Accelerates IRS technology footprint reduction 

through retirement, consolidation, and refactoring of legacy applications; 

implements IMF retirement portfolio; provides for architecture and engineering 

support for the broader portfolio. 

The ARP Modernization surge will accelerate existing work and longer-term 

modernization work. IT will continue to be fully transparent and communicate the 

investment impacts to enhance tax administration, improve operations, and positively 

contribute to the agency’s long-term success.

V. IRS Integrated Modernization Business Plan

The IRS has made significant progress on its IRS Integrated Modernization Business 

Plan. The plan was developed with a phased implementation approach that 

acknowledged the need to adjust based on emerging priorities, technology advances, 

legislation, and evolving customer expectations. the FY 2021 IRS IT Annual Key Insights 

Report (AKIR) will provide updates on how the annual funding and the $1 billion 

provided in the ARP interact with the IRS technology modernization portfolio.

Executing the IRS Integrated Modernization Business Plan strategic direction enables the 

IRS to continue to meet federal and agency mandates, while further reducing reliance 

on legacy systems and aged technology that put the broader IT infrastructure at risk. 

The IRS has made considerable progress in the initial years of the plan, delivering 19 

modernized capabilities in FY 2019, 40 capabilities in FY 2020 and on track to deliver 31 

capabilities in FY 2021. The FY 2020 AKIR (Publication 5453, Information Technology 

(IT) Annual Key Insight Report) published on April 1, 2021 summarizes the progress 

delivered by the modernization plan program and initiatives. 
IRS - 105

MODERNIZATIO

N PILLAR

KEY OBJECTIVES KEY 

PROGRAMS & 

INITIATIVES

Taxpayer 

Experience: 

Deliver a service 

experience 

comparable to 

private industry

• Help taxpayers resolve issues quickly and

efficiently

• Empower taxpayers with information 

about their account, obligations, and

payment options

• Make services available to customers

when they need them

• Protect taxpayer information anddata

• WebApps (WebApplications)

• Taxpayer DigitalCommunications

Outbound Notifications (TDC—

ON) 

• Live Assistance

Core Taxpayer 

Services & 

Enforcement: 

Streamline 

and integrate 

IT programs 

that enable 

top- quality 

service

• Integrate tax processingsystems to

increase the cost effectiveness of

operations

• Enablereal-timeprocessingand

increase transparency of returns

status

• Increase data usability and the use of

data analytics to combat fraud

• Customer Account Data Engine

(CADE) 2 Transition State 2 (TS2)

• CADE 2 Target State

• Enterprise Case Management(ECM)

• Information ReturnsProcessing

Modernized 

IRS 

Operations: 

Retire and 

decommission 

legacy 

systems in 

place of more 

sustainable 

infrastructure

• Reduce complexity of the

technical environment

• Leverage data to deliver secure, agile, and

efficient applications and services

• Strengthen organizational agility

through automation and

streamlining processes

• Robotics Process Automation(RPA)

• Application Programming

Interface

(API) Management

• CloudExecution

• Next GenerationInfrastructure

• Data Digitization

• UniversalDataHub/Analytics

Tools/Platform

Cybersecurit

y & Data 

Protection:

Continue to 

protect taxpayer 

data and 

address 

emerging 

threats

• Establish trusted and streamlined 

access toinformationthrough

identityandaccess management

technologies

• Proactivelyidentifyemergingthreats

and vulnerabilities using real-time 

intelligence information and

analytics

• Protect taxpayer data and systems via

end-to-end visibility and common 

platforms

• Vulnerability&Threat 

Management

• Identity & Access Management

(IAM)

• SecurityOperations&

Management

Figure 4 – IRS Modernization Portfolio and Pillars
IRS - 106

A. Taxpayer Experience

• Web Applications (Web Apps): The Web Apps program and initiatives 

improve interactions and communications with taxpayers, the IRS, and third 

parties by providing a broad range of self-service options, establishing secure 

information exchange, and building internal capabilities. By enabling 

authorized third parties and taxpayers to interact digitally with the IRS, the 

investment provides a better user experience and delivers consistent data and 

services through reusable Application Programming Interfaces (APIs). Web 

Apps will continue to transform the way the IRS does business by enhancing 

the taxpayer experience and delivering new digital services that allow 

taxpayers expanded capabilities in FY2022. Taxpayers will be able to update 

contact information (address and phone number) through online account, 

ensuring their information is up to date. In addition, taxpayers will be able to 

make tax payments within online account without re-authentication or leaving 

the online account experience, thus improving revenue collection, and 

promoting voluntary compliance. Additional features will allow taxpayers to 

schedule/modify scheduled payments and store bank information. As part of 

the Tax Pro effort, authorized tax professionals will benefit from the 

capabilities that modernize certain paper-based processes to help resolve 

issues with the IRS on behalf of their clients. These include the ability to 

manage new and pending authorization requests, view/print confirmation of 

submission and expiration of out-of-date authorizations, and, in future 

release, view/manage all existing authorizations. The taxpayer will be able to 

initiate Power of Attorney and Taxpayer Information Authorization forms in 

future release of Tax Pro. These capabilities will reduce the amount of paper 

forms, reduce taxpayer and tax professional burden, and reduce the time it 

takes to submit authorizations. Increased data accuracy and security will 

ensure the entire process is secure in confirming and protecting identity. The 

Modernized Installment Agreement capabilities will also expand, enabling 

taxpayers to establish long-term payment plans in Online Account.

• Taxpayer Digital Communications Outbound Notifications (TDC-ON):

TDC-ON provides taxpayers access to fast, secure, and personalized digital 

communications delivered through a secure messaging platform. The IRS will 

continue to develop more digital notices, anticipating that 50 percent of all 

outbound notice volume will be digitalized by the end of FY 2022. Taxpayers 

will be able to opt in or opt out of receiving paper notices and receive 

notifications through email and SMS when a notice is available. TDC-ON will 

allow the IRS to move away from paper-based notifications and allow 

taxpayers to navigate directly to IRS online payment tools, increasing the 
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likelihood of taxpayer action and expediting the resolution of tax-related 

issues.

• Live Assistance: IRS is engaged in several projects to enhance the experience 

for taxpayers who call IRS for live assistance, including expanding customer 

call-back, redesigned customer voice portal, and improved identity 

verification. Future live assistance enhancements will broaden service channels 

to include live text chat, virtual assistant capabilities, and video chat 

assistance. In FY 2020, the IRS finished its second successful year of offering 

Customer Callback (CCB) service. The IRS expanded CCB from one application 

to five toll-free applications and offered CCB service to 1.22 million taxpayers. 

Of these, nearly 835,000 callers accepted the CCB option, representing a 68 

percent acceptance (take rate), about 10 percentage points above industry 

averages. In total, CCB achieved a success rate of nearly 90 percent and saved 

taxpayers 486,000 hours of live hold time by allowing them to leave a callback 

number, disconnect, and await their reconnect call with an available phone 

agent. In FY 2021 IT has already expanded CCB to a total of 16 applications 

including 2 Spanish language lines. For FY 2022, IRS plans to initiate work to 

create a “Digital Customer Service” model via a "multi-channel" platform that 

provides real-time assistance to taxpayers via their choice of channel. Agent 

Desktop Modernization offers numerous benefits including the ability 

improve agent efficiency by making taxpayer knowledge easier to find, and 

the flexibility of product makes it configurable, to provide a platform that 

brings together voice, chat, secure messaging, and virtual assistance via a 

digital agent.

B. Core Taxpayer Services and Enforcement

• CADE 2 Transition State (TS2): The Customer Account Data Engine 2 (CADE 

2) Program will modernize the taxpayer account processing environment and 

develop an integrated, near real-time processing environment to support tax 

returns, information returns, payments, and other transactions. Key TS2 

accomplishments include: 

o Implementation of common code across IRS systems to enable 

consistent and accurate Penalty and Interest calculations on financial 

statements

o Deployment of database conversion capability allowing IRS to retain 

expanded taxpayer history for approximately two billion taxpayer 

records, improving service and enhancing compliance

The Individual Tax Processing Engine (ITPE) project is a critical TS2 project 

which will convert approximately 200,000 lines of legacy assembly language
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code to modern software language. This code conversion is a major milestone 

towards retiring the Individual Master File (IMF). In FY 2022, the program will 

continue execution of the ITPE project, with a planned development end date 

of April 2023.

• CADE 2 Target State: CADE 2 Target State will provide state-of-the-art 

individual taxpayer account processing and data-centric technologies for 

maintaining and balancing individual taxpayer account data to reduce 

operations & maintenance costs, improve taxpayer service quality, enhance 

responsiveness to legislative changes, and eliminate financial weaknesses. The 

program will allow the IRS to retire the most complex portion of the Individual 

Master File (IMF), a step towards fully retiring the IMF. The CADE 2 Target 

State stand up and planning will address future capabilities that will allow 

direct visibility and access to taxpayer account detail on a near real-time basis 

and furthers the overarching effort to retire the IMF. Achieving these main 

goals of the CADE 2 program will result in enhancements to taxpayer 

experience by providing accelerated account info updates in near-real time, 

streamlined customer service operations by distributing data to downstream 

systems for accelerated issue resolution. CADE 2 Target State also aids in 

stabilizing the IRS’s legacy footprint and realizing enterprise priorities for 

legacy code conversion. The first two releases will primarily cover four 

capabilities:

1. Support Financial Reconciliation reports to confirm CADE 2 data is in

balance within accounting cycles

2. Provide taxpayer account data to downstream account management 

systems from the CADE 2 database

3. Development of specialized individual taxpayer reports and data feeds for 

refunds, transcripts, notices, and feeds to other federal agencies 

4. Establish an analytical data store of individual tax data for analytics 

platforms that support enterprise-wide data access strategy

• Enterprise Case Management (ECM): ECM provides the IRS with an 

enterprise solution for streamlining case and workload management 

processes to improve the quality and effectiveness of case interactions with 

individual taxpayers, small and large businesses, tax-exempt organizations, 

and a wide spectrum of intermediaries. ECM will digitize case information, 

provide business automation, and increase resource alignment across IRS 

business units to improve customer service and reduce the timeframe for case 

resolution. In FY 2020, ECM Release 1 delivered the foundational platform and 
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capabilities of a new cloud-based case management solution. Subsequent 

ECM releases in FY 2021 and beyond will provide integrated case 

management to a widening circle of business units across the IRS. In FY 2022, 

ECM will include the data integration with individual taxpayer account data 

needed for the Small Business/Self Employed, Appeals, and Counsel – Offer in

Compromise and Office of Professional Responsibility business processes. 

These capabilities will enable the program to scale and migrate additional 

business processes concurrently in the Release 4 timeframe. 

• Information Returns System Processing (IRSP): IRSP consists of a modern 

intake database and applications that allow for improved document matching 

to improve intake consistency. This initiative provides capabilities that will 

enable a modernized solution for acceptance, validation, perfection, 

management, and use of Information Returns (IR) data. IRSP will also enhance 

compliance processing by providing modern data distribution of IR data. The 

scope of IRSP includes evaluating the impact of IR modernization across 

multiple business processes (corporate data, submission, corporate 

processing, compliance, etc.), coordinating the IR business processes across 

intake, validation, posting, assimilation and data sharing, performing 

modernization of legacy systems that perform functions across the IR 

workflow, and designing and developing a scalable solution and modernized 

intake platform to accommodate all IR form types. IR Modernization has been 

broken into four main phases, the first of which addresses Taxpayer First Act 

(TFA) Provision 2102 mandates to develop an internet portal for 1099 

Information Returns. Phases 2-4 include modernization of extension and 

waivers, conversion of all IR compliance programs into a modern platform, 

and modern reporting and analytical capabilities, respectively. The IRSP target 

architecture transitions and replaces legacy systems to modern, adaptive, and 

sustainable technologies to reduce operations and maintenance (O&M),

provides increased architecture flexibility and elasticity to support growing IR 

volumes, types, and emerging business requirements, and increases 

availability, reliability, and distribution of IR data to support enhanced 

compliance and security processes.
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C. Modernized IRS Operations

• Robotics Process Automation (RPA): Robotic Process Automations (RPA) 

will enhance business process execution, efficiency, speed, and accuracy by 

automating repeatable manual tasks, allowing IRS employees to focus on 

higher value-added work and decreasing business cost. To prove the benefits 

of implementing automations within the IRS, a focus group of six manual 

processes across four business areas were selected for automation. These 

target automation efforts produced an average efficiency improvement of 77

percent over the manual processes, with one automation providing an 

improvement of 92 percent. During FY 2022 funding will be used to create

enterprise RPA platform and automation development approach that can 

scale to meet the growing IRS automation demand and leverage intelligent 

automation technologies like artificial intelligence and machine learning for 

the future.

• Data Digitization: Data Digitization is the process of converting analog 

information into a machine-readable digital format that can be stored digitally 

through traditional scanning processes, transcription, or other technology, 

and can be processed by a computer to be easily shared and accessed. The 

IRS achieved significant operational efficiencies by digitizing paper processes 

and increasing access to electronic data to support advanced analytics. This 

effort will implement new technology to scan and store incoming paper forms

and correspondence in an electronic format, as well as modify the paper 

processing pipeline and retire additional legacy systems. IRS seeks a 

coordinated approach to scan paper, convert it to OCR content, apply 

standardized metadata, and integrate the digital result with records and 

content management systems so that content is systematically maintained 

and easily retrieved. Data Digitization will modernize and integrate 

technologies and systems that support secure, flexible, and accurate work 

across IRS functions and promote operational efficiencies and coordination 

across business units. Data Digitization promotes centralized scanning and 

data extraction across all business units to reduce operational complexity, 

streamlines business processes and enhances portfolio rationalization by 

adopting existing systems to process both paper and electronic forms, and 

strengthens data intake capabilities to enable the validation, storage, 

protection, and sharing of data.
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• Application Programming Interface (API) Implementation: API 

Implementation incorporates efforts to drive internal and external API 

deployment. APIs allow data exchange through services via standard, reusable 

common programming code, allowing software developers to design 

applications that interact with one another and expose back-end 

data/systems in a uniform and consistent way. The implementation of 

capabilities will provide:

o Physical environments for deploying new APIs that support IRS 

business operations and stakeholders who rely on IRS data

o An environment where authorized parties have easier access to IRS 

data and streamlines the data exchange, which places the IRS in a 

better position to serve clients and helps ensure the most efficient use 

of common services 

o An environment where customers can have secure access to taxpayer 

data 

o A governance and life cycle management framework for the design, 

development, test, deployment, and maintenance of APIs

API implementation has developed the API Initial Operating Capability and 

deployed three APIs on the Enterprise Systems Access Management (ESAM) 

platform for automated registration. In the future, API Implementation will 

continue to enable Enterprise API Deployment and Management through 

tools and deployment of services for both producers and consumers of APIs 

as well as a consistent approach for API development, utilization, as well as 

management through imbedded system automation. 

• Universal Data Hub / Analytics Tools / Platform (UDH): UDH consists of a 

modernized infrastructure providing universal data access under a unified 

technology platform. This effort is instrumental to delivering on IRS’ Strategic 

Goal of using facts and data to inform decision-making and provide more 

robust access to data. This program will streamline data availability and allow 

for more data-driven business decisions. UDH will also support foundational 

architecture and technology elements that enable business capabilities like 

real-time processing, error correction, expanded online tools and data 

analytics capabilities, improved fraud detection, and other anomaly detection 

capabilities. UDH provides universal access to tax data, 3rd party metadata 

and other data in formats most suitable for operational use and analytical 

consumption. While UDH will provide analytics tools and service, the true 

value lies in establishing a data pipeline to provide data to Business and IT 
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users in a seamless and expedited fashion and make data more readily 

available for analytics and operational use.

• Cloud Execution: The Enterprise Cloud program will adopt cloud 

technologies to enable the delivery of secure, agile, and efficient service 

offerings to the enterprise and the taxpayer. The IRS Cloud Target State calls 

for achieving a hybrid, multi-cloud ecosystem with multiple Cloud Service 

Providers (CSPs), service models, and deployment models. The program has 

developed a Cloud Roadmap which is a three-year plan/view of activities to 

progress towards the IRS Cloud Target State. To mature the ecosystem, it 

completed NetHub AWS GovCloud (IRS’s cloud of choice for FY 2021) Release 

1 providing access to AWS GovCloud for cloud consumers and built a 

Continuous Integration/Continuous Development pipeline that will deploy 

containerized applications to AWS GovCloud environments and support cloud 

migrations. An application modernization approach was developed to identify 

and determine future cloud migrations and migration paths. The program has 

also developed a framework to assess impacted workforce and identify 

training needs for cloud consumers and cloud foundational capabilities 

identified in the Cloud Roadmap. Future plans include maturing the cloud 

ecosystem, introducing new or improve existing capabilities to accelerate app 

migration, enhancing cyber security resilience, and streamline provisioning of 

cloud services.

• Next Generation Infrastructure: Next Generation Infrastructure provides a 

more efficient, scalable, and flexible architecture by implementing advanced IT 

infrastructure tools and technologies for compute, network, and storage 

activities. The combination of these capabilities will help further automate and 

modernize the technology infrastructure and convert legacy code to modern 

programming languages.

D. Cybersecurity and Data Protection

• Vulnerability and Threat Management (VTM): VTM enhances the ability to 

secure taxpayer data and systems through full visibility of hardware and 

software on the network and enhances incident response and detection of 

internal threats to data and systems yielding increased vigilance and proactive 

monitoring of overall risk. VTM provided an Initial Operating Capability (IOC) 

for the Enhanced Security Testing (EST) and Process automation to deliver 

enhanced security testing throughout the system development lifecycle which 

is expected to achieve over 80 percent code vulnerability reduction and over 

85 percent review time reduction during FY 2021 filing season. VTM delivered 

IOC capabilities for analytics tools which will leverage machine learning to 
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proactively identify and respond to emerging insider threats and fraudulent 

behavior. VTM will continue to enhance security testing capabilities, with 

specific emphasis on detecting insider threats and fraudulent activity. It will 

also embed and integrate security into the system development lifecycle, so 

security concerns are identified and addressed prior to system deployment, 

and will continue to aggregate collected data from a diverse set of security 

tools, analyze and query the data, and provide overall situational awareness 

by establishing a dashboard that helps identify cybersecurity risks and enables 

rapid remediation.

• Identity and Access Management (IAM): IAM includes development of a 

common platform for secure authorization and authentication services to 

protect sensitive data at rest and in transit through discrete encryption 

capabilities. Leveraging the common platform in the organization’s 

operational architecture as well as its cloud migration plan, the IAM program 

successfully provided initial operating capability. As a result, 

prevention/mitigation of malicious or unintended access and disclosure of 

taxpayer and other sensitive data was achieved. Through continued 

modernization and phased maturation of common platform capabilities, as 

well as process improvement efforts, the IAM program will deliver final 

operating capability. The program is responsive and agile, adapting to 

changing requirements of the operational environment throughout its 

implementation. The program is currently on track to support the intended 

end-state solution for data protection at rest and in transit. A fully functional 

IAM capability allows the organization to understand who is on the network 

and is conducive to supporting the Privileged Access Management (PAM) 

function for automated provisioning/deprovisioning of access to devices on 

the network.

• Security Operations and Management (SOM): SOM provides enhanced

capability to secure taxpayer data and systems through full visibility of 

hardware and software on the network and improve incident response and 

detection of internal threats to data systems. The organizational requirement 

for effective and efficient security within systems spans across multiple 

environments. SOM establishes security standards, services, and tools 

appropriate and adaptable to an evolving technology landscape. Integration 

of security processes into service designs, operational lifecycles, and everyday 

business practices ensures delivery of systems and technology with inherent 

security-minded characteristics and features. SOM is an iterative and 

continuous business best practice focused on security measures throughout 

the enterprise and development lifecycle. Integrating security throughout the 
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delivery lifecycle requires phased testing at all stages of technological 

development, collaboration between teams to define and support secure 

approaches, and the proactive embedding of cybersecurity within new 

technologies prior to entering production. This capability is on track to deliver 

the desired end state of end-to-end visibility and common platforms. In 

concert with IAM and VTM, SOM facilitates a stronger security posture for the 

agency through technological advancement and process modernization. SOM 

provides IRS security practitioners the information needed to stay ahead of 

the curve, and to proactively build-in the system capacity for responsiveness 

and resilience against known, unknown, or unanticipated threats.
IRS - 115

VI. Modernization Initiatives Alignment to IT Strategic Plan

3.2 – Return on Investment (ROI) for IRS Major Enforcement Programs

The actual cost and actual revenue collected for FY 2016 through FY 2020 for the three 

major enforcement programs, Examination, Collection, and Automated Underreporter 

(AUR) are provided below. The activities included in these programs include:

Examination Program conducts examinations of tax returns of individual taxpayers, 

businesses, and other types of organizations to verify that the tax reported is correct. 

This includes examinations of individuals, small businesses, self-employed, large 

corporate businesses, partnerships, international, estate and gift, excise tax and 

employment tax-exempt organizations, qualified pension benefit plans, and government 

entities. The examination costs include the cost of the Field Exam, Correspondence 

Exam, IRS Chief Counsel, and Appeals functions.

Collection Program collects delinquent taxes and secures delinquent tax returns 

through the appropriate use of enforcement tools, such as lien, levy, seizure of assets, 
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installment agreement, offer-in-compromise, substitute-for-return, summons, and IRC 

section 6020(b) (which allows the IRS to prepare returns if a taxpayer neglects or refuses 

to file), and provides education to taxpayers to enable future compliance. The cost of 

the Collection program includes Automated Collection System (ACS), Field Collection, 

and Payment Compliance/Correspondence Collection.

Automated Underreporter (AUR) Program matches payer information returns (Forms 

1099, W-2, etc.) against data reported to the IRS on individual tax returns. The 

information is verified to identify any discrepancies. If a discrepancy is found, the case is 

given to a tax examiner for research and analysis. If the tax examiner is unable to resolve 

the discrepancy, the IRS issues a proposed notice and generates a proposed assessment. 

ROI is calculated by dividing revenue by cost. This information provides an indication of 

the ROI for the three major enforcement programs over time. Enforcement revenue 

collected in a fiscal year includes tax, interest, and penalties from multiple tax years. 

Some enforcement activities take more than a year to close and may generate revenue 

over several years.

In addition, these data reflect the average return on investment for these programs and 

do not include the indirect effects of IRS enforcement activities on voluntary 

compliance. Net revenue is maximized only when resources are allocated according to 

marginal direct and indirect return on investment, but those ratios are much more 

challenging to estimate than the average ROI. As a result, the IRS will continue to 

allocate enforcement resources across a range of enforcement activities to ensure 

taxpayers pay the taxes they owe.

 

Return on Investment for IRS Major Enforcement Programs

Dollars in Millions

Enforcement Program Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI

IRS Total $5,592 $54,291 9.7 $5,506 $56,914 10.3 $5,559 $59,366 10.7 $5,418 $57,523 10.6 $6,542 $51,085 7.8

Examination 3,782 12,023 3.2 3,693 15,102 4.1 3,716 15,017 4.0 3,568 10,877 3.0 4,764 8,253 1.7

Collection 1,576 37,259 23.6 1,600 36,498 22.8 1,635 38,985 23.8 1,625 41,793 25.7 1,588 38,948 24.5

Automated Underreporter 

(AUR) 234 5,009 21.4 214 5,314 24.9 208 5,364 25.7 225 4,853 21.6 190 3,884 20.4

1The cost of the enforcement programs was calculated using budget data from the IRS Integrated Financial System (IFS) and includes direct dollars and FTE from the 

Enforcement appropriation, Exam and Collections budget activity, and dollars from the Operations Support appropriation prorated using actual FTE realized for each major 

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
IRS - 117

3.3 – IRS Performance Measures Table

Performance Measures FY2016 Actual FY2017 Actual FY2018 Actual FY2019 Actual FY2020 Actual FY2020 Target FY2021 Target FY2022 Target

Customer Service Representative Level of Service (LOS)1 53.4% 77.1% 75.9% 65.4% 53.1% 60.0% 32.0% 75.0%

Customer Accuracy - Tax Law (Phones) 96.4% 96.7% 95.5% 91.6% 91.0% 92.0% 90.0% 90.0%

Customer Accuracy - Accounts (Phones) 96.1% 96.0% 96.1% 94.3% 93.5% 94.0% 91.0% 91.0%

Timeliness of Critical Filing Season Tax Products to the Public2 92.5% 93.1% 59.6% 92.6% 78.4% 89.0% 85.0% 89.0%

Timeliness of Critical TE/GE & Business Tax Products to the Public2 98.0% 96.7% 100.0% 96.1% 96.0% 89.0% 85.0% 89.0%

Percent of Business Returns Processed Electronically 3a 50.0% 52.9% 55.6% 57.8% 67.4% 60.0% Discontinued Discontinued

Enterprise Self-Assistance Participation Rate4 89.0% 79.0% 82.0% 85.4% 90.6% 82.0% 89.0% 89.0%

Taxpayers Satisfied with the IRS (based on 100 point scale) 5 74 74 74 73 74 Indicator Indicator Indicator

Examination Coverage - Individual3b 0.7% 0.6% 0.6% 0.45% 0.29% 0.48% Discontinue Discontinue

Examination Coverage - Business (Assets > $10 million)3b 3.0% 2.5% 2.2% 1.6% 1.3% 1.7% Discontinue Discontinue

Examination Efficiency - Individual 143 121 131 109 76 115 111 117

Automated Underreporter Coverage3a 2.3% 2.2% 2.0% 1.3% 0.6% 1.7% Discontinued Discontinued

Time to Start Compliance Resolution6 58.8% 60.1% 60.9% 66.3% Indicator Indicator Indicator

Time to Resolve Compliance Issue After Filing6 491 494 469 491 Indicator Indicator Indicator

Repeat Non-Compliance Rate6 29.2% 30% 31.4% 35.6% Indicator Indicator Indicator

Collection Coverage (Units) 43.4% 42.2% 41.6% 41.3% 34.9% 39.7% 33.0% 33.0%

Cost to Collect $100 $0.35 $0.34 $0.34 $0.33 $0.35 Indicator Indicator Indicator

Criminal Investigations Completed 3,721 3,089 3,051 2,797 2,624 2,700 2,600 2,600

Conviction Rate 92.1% 91.5% 91.7% 91.2% 90.4% 92.0% 92.0% 92.0%

Rentable Square Feet per Person 297 301 298 278 298 280 270 

Percent of Aged Hardware7 52.2% 52.3% 45.5% 31.0% 16.0% 30.0% 20.0% 20.0%

Percent of Major IT Investments within +/- 10% Cost Variance at the 

Investment Level 76.2% 50.0% 72.2% 88.9% 84.2% 90.0% 90.0% 90.0%

Percent of Major IT Investments within +/- 10% Schedule Variance 

at the Investment Level 85.7% 88.9% 83.3% 88.9% 94.7% 90.0% 90.0% 90.0%

2 Modified in FY 2019.

5

 Based on the American Customer Satisfaction Index (ACSI) survey; the All Individual Tax Filer score is calculated from separate ACSI Individual Paper Filer and Electronic Filer customer satisfaction index scores; available on an 

annual basis at the end of January and computed on a 100-point scale. 

IRS Performance Measures

1 These telephone phone lines service 78% of all telephone traffic. The FY20 Enterprise LOS is 51.2% . The Enterprise LOS measures the relative success rate of taxpayers calling to speak with an IRS Assistor on any IRS toll-free 

line—not just those answered by Accounts Management CSRs. 

4 Starting in FY 2017, the IRS modified the Taxpayer Self Assistance Rate measure (renamed to Enterprise Self Assistance participation Rate) to include additional self-service channels including Get Transcript and payment 

applications such as Direct Pay and Online Payment Agreements. As new self-assistance applications are provided to the public, they will be added to the methodology.

7 The measure definition changed in FY18; removing certain asset categories (fax machines, low-end printers and scanners) that are no longer being actively refreshed from the calculation to more accurately define the inventory that’s 

reflective of risk to the IT environment.

6 New measure added for FY20; historical data provided for comparative purposes.

3 a. Discontinued in FY 2020; b. Requested discontinuing measure for FY 2021 budget reporting; new measures under development for FY 2021. 
IRS - 118

Customer Service Representative (CSR) 

Level of Service

The number of toll-free callers that either speak to a Customer Service Representative or receive informational 

messages divided by the total number of attempted calls.

Customer Accuracy - Tax Law Phones The percentage of correct answers given by a live assistor on Toll-free tax law inquiries.

Customer Accuracy - Accounts (Phones) The percentage of correct answers given by a live assistor on Toll-free account inquiries.

Timeliness of Critical Individual Filing Season 

Tax Products to the Public

The percentage of Critical Individual Filing Season (CIFS) tax products available to the public seven calendar 

days before the official IRS start of the (individual) filing season. CIFS tax products are those tax forms, 

schedules, instructions, and publications required by large number of filers to prepare a complete and 

Timeliness of Critical TE/GE & Business Tax 

Products to the Public

The percentage of Critical Tax Exempt/Government Entities (TE/GE) and Business (CTB) tax products available 

to the public seven calendar days before the official IRS start of the individual filing season. CTB tax products 

are forms, schedules, instructions, and publications used by large number of TE/GE and Business filers to 

prepare a complete and reasonably accurate return or form by the filing date occurring during the fiscal year 

(e.g., income tax, excise tax, exempt organization return, etc.).

Percent of Business Returns Processed 

Electronically The percentage of electronically filed business tax returns divided by the total business returns filed.

Enterprise Self Assistance Participation Rate The percentage of taxpayer assistance requests resolved using self-assisted automated services.

Taxpayers Satisfied with the IRS (based on a 

100-point scale)

The percentage of taxpayers satisfied with the IRS according to the American Customer Satisfaction Index 

(ACSI) survey. The All Individual Tax Filer score is calculated from separate ACSI Individual Paper Filer and 

Electronic Filer Customer Satisfaction Index Scores. Based on a 100-point scale.

Examination Coverage - Individual

The sum of all individual 1040 returns closed by Small Business/Self Employed (SB/SE), Wage & Investment 

(W&I), Tax Exempt and Government Entities (TE/GE), and Large Business and International (LB&I) (Field Exam 

and Correspondence Exam programs) divided by the total individual return filings for the prior calendar year.

Examination Coverage – Business Assets 

>$10 Million)

The number of LB&I returns (C and S Corporations with assets over $10 million and all partnerships) examined 

and closed by LB&I during the current fiscal year divided by the number of filings for the preceding calendar 

year.

Examination Efficiency – Individual (1040)

The sum of all individual 1040 returns closed by SB/SE, W&I, TE/GE, and LB&I (Field Exam and 

Correspondence Exam programs) divided by the total Full-Time Equivalent (FTE) expended in relation to those 

individual returns.

Automated Underreporter (AUR) Coverage A percentage representing the total number of W&I and SB/SE contact closures (a closure resulting from a case 

where SBSE and W&I made contact) divided by the total return filings for the prior year.

Time to Start Compliance Resolution The percentage of all individual income tax enforcement cases started within six months of the return posting 

date.

Time to Resolve Compliance Issue After Filing

The median time it takes to close all individual income tax enforcement cases in days (excluding disaster, 

bankruptcy, and TEFRA cases for exam and collection cases that are not closed as full paid), starting from filing 

date.

Repeat Non-Compliance Rate The percentage of individual taxpayers in a fiscal year with additional non-compliance two years after the initial 

tax year that contains a filing, payment, or reporting compliance issue, compared to total taxpayers. 

Collection Coverage – Units The volume of collection work disposed compared to the volume of collection work available.

Cost to Collect $100 The cost of collecting $100 is computed as total operating costs divided by gross collection multiplied by 100. 

Criminal Investigations Completed

The total number of subject criminal investigations completed during the fiscal year, including those that resulted 

in prosecution recommendations to the Department of Justice as well as those discontinued due to a lack of 

prosecution potential. 

Conviction Rate The percent of adjudicated criminal cases that result in convictions.

Rentable Square Feet per Person The amount of Rentable Square Feet the IRS maintains per person requiring space.

Percent of Aged Hardware This measure shows the quantity of IT hardware in operation past its useful life as a percentage of total hardware 

in use. 

Percent of Major IT Investments within +/- 10% 

Cost Variance at the Investment Level

Number of major IT investments within +/-10 percent variance between planned total cost and projected/actual 

cost within a fiscal year divided by the total number of major IT investments in that fiscal year.

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level

Number of major IT investments within +/-10 percent variance between planned days and projected/actual days 

within a fiscal year divided by the total number of major IT investments in that fiscal year.

Budget Level Performance Measure Descriptions
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3.4 – Summary of FY 2020 Savings Realized

Increase e-File Savings 

FY 2020 Actual Savings: -$9,600,000 / -180 FTE

FY 2022 Projected Savings: -$5,585,000 / -101 FTE

The IRS realized savings of $9,600,000 and 180 FTE in FY 2020 because of the decrease 

in the number of paper returns processed/filed. The number of paper returns received 

by the IRS decreased by 2,343,531 from FY 2019 to FY 2020 which included 915,062 

fewer individual paper returns and 1,428,469 fewer business paper returns.
IRS - 120

Section IV – Appendix

4.1 - COVID-19 Supplemental Funding

Table 1: Spend Plan Including Realignments and OED through March 31, 2021

CARES Act and Families First Coronavirus Response Act (P.L. 116-36)

Beginning in mid-March 2020, IRS employees worked around the clock to implement 

major provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The 

IRS and Treasury began delivering the first round of EIPs within two weeks of the 

legislation. The IRS ultimately issued more than 160 million EIPs to taxpayers across the 

country totaling over $270 billion, while simultaneously managing an extended filing 

season. The IRS also delivered hundreds of printed products on the COVID-19 

pandemic, more than 1,300 social media postings, and more than 500 informational 

postings on IRS.gov. Working with partners in the tax professional community, the IRS 

translated key EIP information into 35 different languages. 

The 2020 filing season brought its own unique challenges, but the IRS responded by 

Appropriation

$ in Thousands Initial Spend Plan

Realignments 

through 

March 31, 2021 1

Current Spend 

Plan

OED through 

March 31, 2021

Balance 

Remaining

CARES Act and Families First Coronavirus Response

Taxpayer Services $352,900 $7,891 $360,791 $346,293 $14,498

CARES Act - Rebates (P.L. 116-136) 293,500 7,891 301,391 289,183 12,208

CARES Act - Supplemental (P.L. 116-136) 59,400 59,400 57,110 2,290

Enforcement $79,200 ($16,497) $62,703 $40,734 $21,969

CARES Act - Rebates (P.L. 116-136) 37,200 (16,497) 20,703 7,145 13,558

CARES Act - Supplemental (P.L. 116-136) 42,000 42,000 33,588 8,412

Operations Support $333,600 $8,606 $342,206 $287,554 $54,652

Families First Coronavirus Response Act (P.L. 116-127) 15,000 15,000 14,988 12

CARES Act - Rebates (P.L. 116-136) 170,000 8,606 178,606 141,746 36,860

CARES Act - Supplemental (P.L. 116-136) 148,600 148,600 130,820 17,780

Total CARES Act and Families First Coronavirus Response $765,700 $765,700 $674,581 $91,119

Consolidated Appropriations Act, FY 2021 (EIP3)

Taxpayer Services $196,435 $196,435 $157,982 $38,453

Consolidated Appropriations Act, FY 2021 (P.L. 116-260) 196,435 196,435 157,982 38,453

Operations Support $312,565 $312,565 $129,290 $183,275

Consolidated Appropriations Act, FY 2021 (P.L. 116-260) 312,565 312,565 129,290 183,275

Total Consolidated Appropriations Act, FY 2021 $509,000 $509,000 $287,272 $221,728

American Rescue Plan

Taxpayer Services $422,125 $422,125 $422,125

Advance Tax Year 2021 Child Tax Credit (P.L. 117-2) 206,300 206,300 206,300

Cost of Economic Impact Payment 3 (P.L. 117-2) 215,825 215,825 215,825

Operations Support $939,575 $939,575 $939,575

Advance Tax Year 2021 Child Tax Credit (P.L. 117-2) 190,900 190,900 190,900

Cost of Economic Impact Payment 3 (P.L. 117-2) 248,675 248,675 248,675

Cost to Integrate, Modernize, and Secure IRS Systems (P.L. 117-2) 500,000 500,000 500,000

Business Systems Modernization $500,000 $500,000 $500,000

Cost to Integrate, Modernize, and Secure IRS Systems (P.L. 117-2) 500,000 500,000 500,000

Total American Rescue Plan $1,861,700 $1,861,700 $1,861,700

Total by account

Taxpayer Services 971,460 7,891 979,351 504,275 475,076

Enforcement 79,200 (16,497) 62,703 40,734 21,969

Operations Support 1,585,740 8,606 1,594,346 416,844 1,177,502

Business Systems Modernization 500,000 500,000 500,000

Total $3,136,400 $3,136,400 $961,853 $2,174,547
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breaking records—Modernized e-File (MeF) receipts topped 303 million, including a 

single-day record that totaled more than 10 million receipts. IRS processed more than 

2.275 million e-filed returns at a record hourly rate of 631 submissions per second, 

resulting in refunds reaching taxpayers faster. IRS shifted its response to the pandemic 

by extending filing season to July 15, 2020, using innovative programming, which 

allowed us to implement the changes quickly with no impact to American taxpayers. 

Undertaking implementation of this complex legislation during the 2020 filing season 

was very resource intensive. By February 2021, IRS implemented programming changes 

in IT systems to update Recovery Refund Credit (RRC) eligibility criteria, ensuring all 

returns with a RRC claim were processed accurately in compliance with the tax law. Due 

to the closure of more than 90 percent of our buildings, IRS rescaled operations for 

activities such as paper processing and sending notices. We maintained core operations 

with about 57,000 employees teleworking and others remaining in various facilities.

Throughout the COVID-19 pandemic, technology was the cornerstone of the IRS’s ability 

to continue mission-critical work to support the American taxpayer. The IRS ensured 

continuity of services and support to taxpayers utilizing technology. As of September 

2020, 100 percent of customer service representatives were teleworking capable. IRS 

enabled more than 77,000 telework end users with remote virtual private network 

(ERAP) access to securely connect to the IRS network. 

On July 15, 2020, IRS began to test, package and then successfully deployed Zoom 

Government (Zoom.Gov) collaboration capabilities. Zoom capabilities were initially made 

available to 1,400 Office of Chief Counsel personnel, enabling attorneys to perform U.S. 

Tax Court litigation activities in a virtual environment. Ultimately, Zoom collaboration 

capabilities were extended to all employees by November 2020. This accomplishment 

provided employees enhanced video conferencing capabilities to conduct large virtual 

office collaboration meetings.

IRS expanded the ‘Live Assistance/Callback’ feature, resulting in offering 77 percent of 

filing season 2020 telephone callers the option to receive a callback, with over 85

percent of callbacks successful. For filing season 2021, IRS has worked to increase the 

scope of customer callback for toll-free taxpayer calls from 5 phone business 

applications/product lines to 16 phone applications/product lines. This should increase 

coverage from 19 percent of taxpayer calls to approximately 40 percent. Customer 

Callback for filing season 2021 went live on January 4, 2021. 
IRS - 122

Consolidated Appropriations Act, FY 2021 (P.L. 116-260)

A second round of EIPs were signed into law on December 27, 2020, and 

payments began posting to bank accounts just two days after legislation was 

enacted. IRS processed 147 million payments totaling $142 billion. As of March 

31, 2021, IRS has sent more than 138 million notices to an eligible taxpayer. IRS 

also issued approximately 36.6 million EIPs (includes reissued payments) in the 

form of paper checks or debit cards for taxpayers where the IRS did not have 

direct deposit information. Between January 25 – 28, 2021, IRS processed the 

EIP 2 Reissuance Payments of 5.2 million rebate refunds, totaling $5.8 billion.

IRS increased EIP telephone service through a contract that assists with the 

increased volume of taxpayer questions and concerns related to EIPs using an IRS 

prepared scripts to answer general EIP taxpayer questions. This allows IRS CSRs to 

focus on more complex EIP inquiries, critical filing season calls and refund 

protection concerns. Approximately 23.2 million total EIP 2 calls were answered 

through March 12 (cut-off date for EIP 2); of that volume approximately 730 

thousand were answered by IRS assistors, 17.9 million were answered through 

automation, and 4.5 million were answered by the contractor.

American Rescue Plan (P.L. 117-2) 

The American Rescue Plan was enacted on March 11, 2021, IRS was allocated $1.862 

billion. Of this, $397.2 million was for the implementation of the advance tax year 2021 

child tax credit, $464.5 million to administer the third round of economic impact 

payments (EIP 3), and $1 billion for to integrate, modernize, and secure IRS systems. As 

of May 12, 2021, the IRS, in partnership with Treasury and the Bureau of Fiscal Service, 

disbursed approximately 165 million round-three EIPS, with a total value of 

approximately $388 billion. 

In addition, the U.S. Department of the Treasury and IRS announced in May that the 

first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) 

from the American Rescue Plan will be made on July 15. Roughly 39 million households 

— covering 88 percent of children in the United States — are slated to begin receiving 

monthly payments without any further action required.

Treasury and the IRS also announced the increased CTC payments, will be made on the 

15th of each month, unless the 15th falls on a weekend or holiday, allowing families who 

receive the credit by direct deposit to plan their budgets around receipt of the benefit. 

Eligible families will receive a payment of up to $300 per month for each child under age 

6 and up to $250 per month for each child age 6 and above. Households covering more 
IRS - 123

than 65 million children will receive the monthly CTC payments through direct deposit, 

paper check, or debit cards, and Treasury and the IRS are committed to maximizing the 

use of direct deposit to ensure fast and secure delivery. While most taxpayers will not be 

required to take any action to receive their payments, Treasury and the IRS will continue 

outreach efforts with partner organizations over the coming months to make more 

families aware of their eligibility.

4.2 - Mandatory Funding and Program Integrity Allocation Adjustment Proposals

A well-functioning tax system requires that all taxpayers pay what they owe. An 

unfortunate characteristic of the current system, however, is an asymmetric adherence 

to tax law by the nature of income received. While reporting compliance is roughly 99% 

on wages, compliance across other forms of income is substantially less as the IRS has 

difficulty verifying whether income from opaque sources is properly reported. 

Noncompliance is concentrated at the top of the income distribution. A recent study 

found that the top one percent of earners failed to report 20 percent of their income 

and failed to pay nearly $175 billion in taxes owed annually.1

Lower levels of compliance not only impact the fairness of the tax system, but they also 

lower tax revenue and deteriorate our nation’s fiscal position. Left unaddressed, this tax 

gap— the difference between taxes owed to the government and taxes actually paid—

will total about $7 trillion over the course of the next decade. This massive gap in 

revenue means policymakers must choose between higher taxes elsewhere in the tax 

system, lower spending on fiscal priorities, or rising budget deficits. 

The tax gap has many underlying causes, chief among them being insufficient IRS 

enforcement. Budget cuts over the past decade have resulted in an agency that lacks 

the capacity to address sophisticated tax evasion efforts. Over this period, audit rates for 

taxpayers making over $1 million in income have fallen by almost 80 percent.

A robust and sustained investment is necessary to ensure the IRS can do its job of 

administering a fair and effective tax system. The IRS requires more resources to 

conduct investigations into underreported income and to pursue high-income taxpayers 

who evade their tax liability through complex schemes. It requires 21st century 

technology to unpack complex tax returns and track income across various opaque 

sources. The IRS also needs access to better information so that the agency can target 

its efforts at the most egregious offenders, while helping compliant taxpayers avoid 

unnecessary and costly audits. This investment will also put the IRS in a position to 

provide taxpayers with timely answers to questions.
IRS - 124

These considerations provide the basis for a series of proposals in the American Families 

Plan that overhaul tax administration and provide the IRS with the resources and 

information it needs to address tax evasion. A key component of this initiative is the 

provision of a sustained, multi-year stream of funding for tax administration. The 

President’s proposals provide roughly $80 billion to the IRS, including $72.5 billion in 

mandatory funding and a $6.7 billion program integrity allocation adjustment, over a 

decade to fund an array of priorities. The proposals also direct that additional resources 

go toward enforcement against those with the highest incomes, rather than Americans 

with actual income of less than $400,000. Specifically, the proposals will.

• Provide the IRS with the resources it needs to stop sophisticated tax 

evasion. Over the last decade, a declining IRS budget has deprived it of the 

resources it needs to effectively enforce our nation’s tax laws. After accounting 

for inflation, the IRS budget has fallen by about 20 percent, and its workforce has 

been depleted, with the number of revenue agents (who are dedicated to highend evasion and large corporate cases) falling by 35 percent. As a result, IRS 

audits have fallen across the board, and particularly for the highest earners.

The IRS has made clear that it needs additional resources to pursue costly tax 

evasion. These are not easy cases to resolve; the average investigation of a highwealth individual takes two years to complete and often requires the IRS to 

commit substantial resources. 

1

TAX EVASION AT THE TOP OF THE INCOME DISTRIBUTION: THEORY AND EVIDENCE 

http://www.nber.org/papers/w28542

Moreover, the lack of adequate investment in compliance has significant revenue 

consequences. Indeed, several hundred taxpayers who committed the most 

egregious form of evasion—failing to file taxes all together—cost the Federal 

Government $10 billion over a period of just three years. 

• Overhaul outdated technology to help the IRS identify tax evasion. Elements 

of IRS IT systems are antiquated and make it difficult for the IRS to identify those 

who are not paying their taxes and to help those who want to comply. The 

President’s proposal provides the IRS much-needed resources to modernize its 

technological infrastructure. Leveraging 21st century data analytic tools will 

enable the IRS make use of new information about income that accrues to highearners and will help revenue agents unpack complex structures, like 

partnerships, where income is not easily traced.
IRS - 125

• Improve taxpayer service and deliver tax credits. A well-functioning tax 

system requires that taxpayers be able to interact with the IRS in an efficient and 

meaningful manner. Inadequate resources often mean that IRS customer service 

representatives are unable to provide taxpayers timely answers to their tax 

questions. Service enhancement will improve the ability of the IRS to 

communicate with taxpayers securely and promptly. Importantly, the proposal 

also includes the necessary resources to ensure that the IRS effectively and 

efficiently delivers tax credits to families and workers, including newly expanded 

Child Tax Credits and Child and Dependent Care Tax Credits.

• Regulate paid tax preparers. Taxpayers often make use of unregulated tax 

preparers who lack the ability to provide accurate tax assistance. These preparers 

submit more tax returns than all other preparers combined, and they make costly 

mistakes that subject their customers to painful audits, sometimes even 

intentionally defrauding taxpayers for their own benefit. The President’s plan calls 

for giving the IRS the legal authority to implement safeguards in the tax 

preparation industry. It also includes stiffer penalties for unscrupulous preparers 

who fail to identify themselves on tax returns and defraud taxpayers (so-called 

“ghost preparers”).

The table below shows the breakdown of the proposed mandatory funding by account and by 

year.

The table below shows the revenue effects of the two proposals. These proposals will 

generate a total of $316.2 billion in direct revenue and revenue protected and will cost 

$79.2 billion over the course of a decade, for net revenue of $237.0 billion over 10 years. 

Direct revenue is the enforcement revenue generated from IRS examination and 

collection efforts. Protected revenue results when IRS enforcement actions prevent the 

release of funds in response to taxpayers’ efforts to recoup previously assessed and paid 

taxes.

In Millions

2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Total

Taxpayer Services 187 196 209 224 239 254 270 277 284 291 2,431

Enforcement - 509 1,267 2,212 3,381 4,772 6,527 8,468 10,881 11,256 49,273

Operations Support 695 857 1,012 1,177 1,367 1,867 2,103 2,349 2,631 2,672 16,730

Business Systems Modernization 260 533 547 561 576 296 303 311 319 327 4,033

$1,142 $2,095 $3,035 $4,174 $5,563 $7,189 $9,203 $11,405 $14,115 $14,546 $72,467

Mandatory Proposal by Appropriation

Mandatory total
IRS-126

Return on Investing in the IRS

$M 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Total 

Mandatory

Cost1 1,142 2,095 3,035 4,174 5,563 7,189 9,203 11,405 14,115 14,546 72,467

FTE 2,642 6,729 13,326 20,874 29,783 39,803 51,770 64,770 80,349 81,743

Direct Revenue - 631 3,098 6,959 12,435 19,758 29,903 40,730 53,721 63,780 231,015 3.2

Revenue Protected - - 214 603 1,402 2,584 4,178 6,211 8,532 11,157 34,881

Direct & Protected Revenue - 631 3,312 7,562 13,837 22,342 34,081 46,941 62,253 74,937 265,896 3.7

Program Integrity Allocation Adjustment (FY 2022 Hiring Wave Only)

Cost 417 647 643 660 677 694 712 731 750 769 6,700

FTE 2,555 5,109 5,109 5,109 5,109 5,109 5,109 5,109 5,109 5,109

Direct Revenue 334 1,690 2,826 3,538 4,099 4,565 4,954 5,279 5,554 5,794 38,633 5.8

Revenue Protected - 168 339 517 795 1,324 1,641 1,964 2,242 2,657 11,647

Direct & Protected Revenue 334 1,858 3,165 4,055 4,894 5,889 6,595 7,243 7,796 8,451 50,280 7.5

Mandatory and Allocation Adjustment Combined

Cost 1,559 2,742 3,678 4,834 6,240 7,883 9,915 12,136 14,865 15,315 79,167

FTE 5,197 11,838 18,435 25,983 34,892 44,912 56,879 69,879 85,458 86,852

Direct Revenue 334 2,321 5,924 10,497 16,534 24,323 34,857 46,009 59,275 69,574 269,648 3.4

Revenue Protected - 168 553 1,120 2,197 3,908 5,819 8,175 10,774 13,814 46,528

Direct & Protected Revenue2 334 2,489 6,477 11,617 18,731 28,231 40,676 54,184 70,049 83,388 316,176 4.0

1

All costs represent budget authority in millions.

2

Even with these adjustments, ROI estimates are a lower bound because they omit general deterrence effects that are difficult to measure.

Return 

Per Dollar 

Invested
IRS-127

4.3 - Appropriations Detail Table with Program Integrity Allocation Adjustment

In addition to the base appropriations request of $13.2 billion request, the Budget 

proposes a $417 million discretionary program integrity allocation adjustment in FY 

2022 to fund new and continuing investments in expanding and improving the 

effectiveness and efficiency of the IRS’s overall tax enforcement program. The Budget 

proposes $287 million for the Enforcement account and $129 million for the Operations 

Support account. These investments will generate and protect $50.3 billion in additional 

enforcement revenue over 10 years and will cost $6.7 billion, for a net revenue of $43.6

billion over 10 years. This return on investment (ROI) is likely understated because it 

does not reflect the effect that enhanced enforcement has on deterring noncompliance.

IRS Program Integrity Allocation Adjustment FY 2022 – FY 2031

Dollars in Millions

Return on Investment (ROI) for FY 2022 Enforcement Investments

Enforcement efforts generate and protect revenue, as well as encourage voluntary 

compliance for taxpayers who would otherwise seek to avoid meeting their tax 

obligations under the law. The IRS calculates an ROI for both revenue generating and 

revenue protecting investments. Generated revenue is from compliance efforts that yield 

direct, measurable results through enforcement activities such as examination and 

collection returns. Protected revenue is revenue the IRS protects from being refunded 

erroneously. It is associated with activities that occur before issuing a taxpayer’s refund, 

including the identification of fraud and questionable returns. 

FY 2022 Revenue Generating Investments

The allocation adjustment includes $308.2 million in investments for traditional 

enforcement and strategic revenue programs, such as examinations and collection 

activities, which are projected to generate more than $4.6 billion in revenue once the 

investments reach full potential in FY 2024 with an expected total ROI of $8.5 to $1. 

Description 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2022-2031

Base $9,334 $9,577 $9,826 $10,082 $10,344 $10,613 $10,889 $11,172 $11,462 $11,760 $105,058

Allocation $417 $647 $643 $660 $677 $694 $712 $731 $750 $769 $6,700

Outlays $375 $620 $641 $657 $676 $692 $710 $729 $749 $767 $6,616

Total (Base + Allocation) $9,751 $10,224 $10,469 $10,741 $11,020 $11,307 $11,601 $11,902 $12,212 $12,529 $111,758

Direct Revenue $334 $1,690 $2,826 $3,538 $4,100 $4,564 $4,954 $5,279 $5,553 $5,795 $38,634

Revenue Protected $0 $168 $339 $517 $795 $1,324 $1,641 $1,964 $2,242 $2,657 $11,647

Total Revenue $334 $1,858 $3,165 $4,055 $4,895 $5,888 $6,595 $7,243 $7,795 $8,452 $50,281

Dollars in Millions

Cost Revenue ROI Cost Revenue ROI Cost Revenue ROI

FY 2022 Revenue Producing Enforcement Initiatives $308.2 $723.2 2.3 $498.9 $3,621.8 7.3 $544.0 $4,645.3 8.5

PI Allocation Adjustment Enforcement Initiatives $308.2 $723.2 2.3 $498.9 $3,621.8 7.3 $544.0 $4,645.3 8.5

Immediate and Directly Measurable Revenue-Producing Initiatives $308.2 $723.2 2.3 $498.9 $3,621.8 7.3 $544.0 $4,645.3 8.5

Increase Audit Coverage 148.8 394.1 2.6 245.6 1,652.6 6.7 267.6 2,150.9 8.0

Increase Collection Coverage 159.4 329.1 2.1 253.3 1,969.2 7.8 276.4 2,494.4 9.0

First Year (FY 2022) Second Year (FY 2023) Full Performance (FY 2024) 
IRS - 128

FY 2022 Revenue Protecting Investments

The benefits of IRS activities that prevent erroneous refunds are not captured in IRS’s 

ROI calculations above. However, the IRS estimates that investment in these activities 

should protect $339.1 million in revenue that otherwise would need to be recovered 

from downstream enforcement actions for an estimated ROI of $2.4 to $1 by FY 2024. 

FY 2022 Revenue Protecting Enforcement Initiatives

Dollars in Millions

Cost Revenue ROI Cost Revenue ROI Cost Revenue ROI

Revenue Protecting Initiatives (which protect taxpayer information, prevents identity theft, and results 

in long-term revenue protection)

$108.5 $0.0 0.0 $144.0 $168.0 1.2 $140.7 $339.1 2.4

PI Allocation Adjustment Revenue Protecting Initiative $108.5 $0.0 0.0 $144.0 $168.0 1.2 $140.7 $339.1 2.4

Return Review Program 38.3 0.0 0.0 43.0 163.9 3.8 42.9 321.6 7.5

Expand Coverage in the Tax-Exempt Sector 37.9 0.0 0.0 66.7 0.0 0.0 64.5 0.0 0.0

Enhance Enforcement Operations 32.3 0.0 0.0 34.3 4.1 0.1 33.3 17.5 0.5

First Year (FY 2022) Second Year (FY 2023) Full Performance (FY 2024) 
IRS - 129

Increase Audit Coverage +$148,810,000 / +1,043 FTE

This initiative requests additional examination employees. The decline in staffing since 

FY 2010 has led to a decrease in the individual audit coverage rate from 1.0 percent in 

Tax Year 2010 to 0.43 percent in Tax Year 2017, which increases the risk to the integrity 

of the nation’s voluntary tax compliance system. As audit coverage rates have declined, 

individuals and businesses may decide that the chance of an IRS audit is minimal. Lower 

coverage rates can lead to taking riskier positions in tax reporting, especially since the 

IRS’s audit coverage decline has been 

widely reported. The additional 

resources will fund a broad range of 

compliance priorities and allow for 

earlier case assignment and 

resolution. This investment is expected 

to annually produce additional 

revenue of $2.2 billion, once the new 

hires reach full potential in FY 2024, an 

ROI of $8.0 to $1. These resources will 

help to:

• Improve the individual audit 

coverage rate by closing more 

Position Type/Other Costs FTE Positions $000

Examination Coverage 519 1,038 $85,074

Revenue Agent 449 898 74,504

Tax Technician 70 140 10,570

Correspondence Examination 169 338 $16,224

Revenue Agent 3 6 467

Tax Examiner 162 324 15,377

Manager/Support Staff 4 8 380

Document Matching 200 400 $19,060

Tax Examiner 200 400 19,060

Other Direct Costs 155 310 $28,452

Revenue Agent 38 76 7,429

Paralegal 7 14 895

Appeals Officer 6 12 1,112

Attorney 50 100 10,525

Tax Examiner 8 16 1,011

Seasonal 0 870

Support Staff 46 92 6,610

Total 1,043 2,086 $148,810
IRS - 130

than 23,700 individual field examination cases and 58,700 correspondence 

examination cases; and

• Expand the Automated Underreported (AUR) program to process more than 

570,000 additional cases (document matching of individuals decreased 80 

percent from FY 2011 to FY 2020). Note that the FY 2020 rate was also impacted 

by COVID work restrictions.

Other Direct Costs (+$28,452,000 / +155 FTE)

Major Activities Projected 

Revenue ($M)

Projected 

Closures

Field Examination 509.2 23,752 

Correspondence Examination 586.6 58,764 

Document Matching/AUR 1,055.1 570,826 

Total $2,150.9 653,342 

IRS Activity Cost FTE Positions Explanation

Appeals $9,553 52 104 Support examination efforts on key compliance areas focused on improving voluntary 

compliance and providing a high level of customer service.

Chief Counsel $14,212 74 148 Provide support for increases in requests for legal advice, litigation assistance, and 

published guidance on issues raised in audits.

Human Capital Office $1,643 9 9

Handle the increase in front-line positions and the expectation that new managerial 

positions will be created. LR support begins in the first year and continues throughout a 

manager's career, as needed.

SB/SE Operations Support $1,922 14 28 Support hiring, training, human capital, technology needs, data analytics and resource 

requirements for the BU.

Privacy, Governmental 

Liaison and Disclosure $1,122 6 12 Address the increase in Freedom of Information Act requests as result of increased compliance activity. 

Total $28,452 155 301

Dollars in thousands
IRS - 131

Increase Collection Coverage +$159,456,000 / +1,184 FTE

These resources will be used to improve the IRS’s capacity to work the collection 

inventory and answer taxpayer phone calls. Increased staffing will increase the overall 

collection coverage rate, which has declined 30 percent from FY 2010 to FY 2020 as 

millions of collection cases available to work were not disposed of each year due to lack 

of staffing and operational interruptions brought on by COVID in FY 2020. During the 

pandemic, collection operations were hindered by office shutdowns, a suspension of 

enforcement actions, and a suspension of balance due notices for case creation. This 

investment is expected to produce additional annual enforcement revenue of $2.5

billion, an ROI of $9.0 to $1 once the new hires reach full potential in FY 2024. These 

resources will help the IRS to:

Position Type/Other Costs FTE Positions $000

Field Collection Coverage 458 916 $73,655

Revenue Officer 458 916 73,655

ACS & ACS Support 359 718 $36,360

Customer Service Representative 284 568 28,627

Tax Examiner 64 128 6,099

Support Staff 11 22 1,634

Correspondence Collection (CSCO) 168 336 $15,497

Tax Examiner 149 298 13,768

Manager and Support Staff 19 38 1,729

Specialty Collection 25 50 $2,961

Revenue Officer 19 38 2,263

Tax Examiner 3 6 277

Manager/Support Staff 3 6 421

Other Direct Costs 174 348 $30,983

Paralegal 5 10 639

Appeals Officer 76 152 14,090

Attorney 31 62 6,341

Tax Examiner 14 28 1,770

Seasonal 726

Support Staff 48 96 7,417

OLS & EDI

Total 1,184 2,368 $159,456
IRS - 132

• Provide 916 additional 

field collection staff to 

expand programs that 

address non-filing and 

underpayment of taxes 

to handle 46,000 

additional collection 

cases. Currently, there 

are over one million 

cases in the queue with 

an aggregate assessed 

balance of more than 

$61 billion - 661,221 of 

these cases are high risk, 

which are cases that have 

a potentially higher 

collection yield and represent a higher compliance risk;

• Provide 568 additional Automated Collection System (ACS) staff to address an 

additional 378,000 ACS cases. The recent impact from COVID has further strained 

the ACS limited staff in its ability to work inventory and service taxpayers; and

• Expand several Compliance Services Collection Operations (CSCO) programs that 

address non-filing and underpayment of taxes through the notice process by 1

million notice dispositions and cases. More than 4,600 Offers-in-Compromise 

cases will also be closed, providing taxpayers another option to resolve their tax 

liability.

Major Activities Projected

Revenue ($M) Projected Closures

Field Collection 884.8 45,938 

Automated Collection System 1,455.8 378,894 

Offers In Compromise 22.1 4,672 

Compliance Services Collection Operation/Non-Filer 131.7 899,584 

Total $2,494.4 1,329,088 
IRS - 133

Other Direct Costs (+$30,983,000 / +174 FTE)

IRS Activity Cost FTE Positions Explanation

Appeals 16,960 90 180 Support Collection efforts and appropriately resolve these cases while providing a high 

level of customer service. 

Chief Counsel 8,138 48 96 Provide support for increases in requests for legal advice, litigation assistance, and 

collection due process.

Small Business/Self 

Employed Operations 

Support

2,197 16 32 Support hiring, training, human capital, technology needs, data analytics and resource 

requirements for the BU.

Privacy, Governmental 

Liaison and Disclosure 1,309 7 14 Address the increase in Freedom of Information Act requests as a result of increased compliance activity.

Human Capital Office 2,379 13 26

Handle the increase in front-line positions and the expectation that new managerial 

positions will be created. LR support begins in the first year and continues throughout a 

manager's career, as needed. 

Total $30,983 174 348

Dollars in thousands
IRS - 134

Expand Coverage in the Tax-Exempt Sector +$37,950,000 / +244 FTE

The tax-exempt sector comprises a large, diverse, and complex population, including: 

• Over 1.8 million exempt organizations, reporting over $4.5 trillion in assets and 

over $2 trillion in revenue;

• Almost 800,000 employee plans, holding over $8 trillion in assets for over 130 

million plan participants;

• Over 25,000 government bond issues, representing over $461 billion in bond 

proceeds, and over 2,750 tax-exempt private activity bond issues, representing 

over $127 billion in bond proceeds; and

• Federal, state, and local governments employing than 21 million employees. 

Position Type/Other Costs FTE Positions $000

Expand Protection and Coverage of Small Business and 

Tax Exempt Sponsored Plans 36.5 73 $5,847

Revenue Agent 31.5 63 5,103

Manager 2.5 5 383

Support Staff 2.5 5 361

Protect Tax-Exempt Sectors and Government Entities 100 200 $15,987

Revenue Agent 84 168 13,608

Tax Compliance Officer 8 16 1,155

Manager 8 16 1,224

Enhance Up-front Compliance for Applicant for TaxExempt Status 37 74 $4,293

Revenue Agent 15 30 2,105

Tax Examiner 12.5 25 970

Manager 3 6 296

Support Staff 3 6 260

Attorney 3 6 570

Appeals Officer 0.5 1 93

Increase Voluntary Compliance 58 116 $8,466

Revenue Agent 7 14 1,215

Tax Technician 22 44 3,045

Tax Examiner 21 42 3,032

Manager 3.5 7 536

Research Analyst 1 2 144

Support Staff 3.5 7 494

Other Direct Costs 12.5 25 $3,357

Special Agent 5 10 1,982

Analyst 1.5 3 192

Attorney 5 10 1,086

Support Staff 1 2 97

Total 244 488 $37,950
IRS - 135

The IRS proposes a multifaceted approach to increase taxpayer confidence and 

ultimately protect taxpayers by enhancing taxpayer education, voluntary compliance, 

and enforcement coverage for employee retirement plans, exempt organizations, taxexempt bonds, and Federal, state, and local governments. These resources will be used

to expand taxpayer education, voluntary compliance, and general compliance activities 

in the tax-exempt sector. In addition, these resources will help prevent fraud and 

ultimately improve taxpayer confidence in the tax-exempt.

Once the requested staff are fully trained, the IRS anticipates these additional resources 

will increase the number of examination closures by approximately 9,291. 

Other Direct Costs (+$3,357,000 / + 12.5 FTE)

IRS Activity Cost FTE Positions Explanation

Appeals $97 1 2

Support examination efforts on key compliance areas focused on improving voluntary 

compliance and providing a high level of customer service.

Chief Counsel $1,086 5 10 Provide support for increases in requests for legal advice, litigation assistance, and 

collection due process.

Criminal 

Investigation $2,174 6.5 13

Support Criminal Investigations pertaining to refund fraud prevention. Examination efforts 

on fraud prevention enforcement, advance complex cases, litigation advance cases and 

other tax compliance areas focused on improving high level service.

Total $3,357 12.5 25

Dollars in thousands
IRS - 136

Enhance Return Review Program +$38,341,000 / +60 FTE

This investment provides funding for staff, hardware, software, and contractual services 

for deployed Return Review Program (RRP) applications. 

Since October 2016, the RRP has been the IRS’s primary system for detecting tax return 

fraud and other anomalies in tax filings, with a current focus on individual tax return 

data. In FY 2020, RRP confirmed more than $826 million in Identify Theft and $2.3 billion 

in Non-Identity Theft fraud protection. In FY 2020 RRP had a return on investment (ROI) 

of $56 to $1.

Funding will allow the IRS to provide support for the deployed capabilities by:

• Enhancing applications, data modeling and mining, database development, 

business rules development, infrastructure support, performance engineering and 

testing, and application testing;

• Providing funds for annual maintenance from hardware vendors and purchases 

to refresh computers, network equipment, and storage;

• Updating and maintaining the system software including operating systems, 

database, data integration, and utility software; and

• Working with the service to update the rules engines and data analytics.

Position Type/Other Costs FTE Positions $000

Improve Return Review Program

Tax Examiner 60 120 5,427

Contractual Services 32,914

Total 60 120 $38,341
IRS - 137

Enhance Enforcement Operations +$32,340,000 / +23 FTE

Funding for this investment will allow the IRS’s Criminal Investigation division (IRS-CI) to: 

• Expand the use of specialized contractor support service provided by a group of 

cyber/crypto experts; 

• Build an internal dashboard for cryptocurrency/blockchain analytics; 

• Establish a One-IRS approach to cryptocurrency non-compliance around both tax 

and non-tax case development; 

• Seek private sector expertise in applied analytics, cybercrime, forensic 

accounting/discovery support, investigative support, and related consulting 

services; and 

• Support the following functions: 

Cyber/Crypto Experts 

Currently, IRS-CI has contractors to perform three distinct functions: case support and 

analysis on the highest priority cases; implementing and maintaining cyber-crimes data 

environment (operational datasets, servers, workstations, and support); and developing 

operational tools and capabilities to hunt cyber criminals. These contractors have been 

embedded within IRS-CI’s Eastern Cyber Crimes Unit (CCU) since its establishment and 

continue to be a critical lifeline for the success of the program area. In IRS-CI’s Western 

CCU, a specialized contractor assists in the development efforts to build an internal, CIowned dashboard, called STRIKES, for cryptocurrency/blockchain analytics. This tool 

harnesses the power of existing vendor products to combine them and take advantage 

of the strengths each provides. Due to the interoperability with IRS-CI data (Cyber data, 

Under Cover (UC) information, subpoenas, search warrants, Open-source intelligence 

(OSINT)), this tool will soon become an enterprise-wide capability. 

Crypto Case Development

IRS-CI, in conjunction with the Advanced Collaboration and Data Center (ACDC), will 

look to establish a One-IRS approach to cryptocurrency non-compliance around both 

tax and non-tax case development. Partnering with other IRS business units, this 

contract would bring on investigators to provide illicit activity pattern identification and 

Position Type/Other Costs FTE Positions $000

Enhance Enforcement Operations 

IT Specialist 23 46 3,340

Hardware and Software 6,000

Contractual Services 23,000

Total 23 46 $32,340
IRS - 138

monitoring. Paired with extensive intelligence gathering, these contractors would supply 

proactive lead generation around tax compliance and illegal activities involving 

cryptocurrency. Additionally, these contractors would be strategically positioned within 

the ACDC facility to leverage training and subject matter expertise. The plan would be to 

expand the scope of work and reassess the return on investment each year to determine 

continuation.

Strategic Priorities, Accelerated Results (SPAR)

The IRS must make use of technology and data to help drive case selection and 

efficiency in the critical work IRS-CI performs. Funding for SPAR will allow the IRS to use 

resources for applied analytics, cybercrimes, related consulting services, investigative 

support, and forensic accounting/discovery support, and will:

• Maintain and improve the IRS’s ability to trace virtual currency transactions in 

financial investigations and utilize emerging tools and technology to combat 

cyber enabled financial crimes;

• Modernize training of investigative staff, including special agents and 

investigative analysts, which will enable IRS-CI to improve its ability to enforce 

the law, ensure tax compliance with tax responsibilities, and aid the IRS in 

combating fraud;

• Allow investigations of large-scale fraud in a more efficient manner, utilizing 

forensic accounting jump teams to provide support as needed in significant tax 

investigations;

• Provide models, algorithms, and the means to efficiently review the millions of 

records and evidence IRS-CI obtains to help identify areas of tax fraud;

• Allow the use of data analytics and other technologies like “predictive policing” to 

help give a clearer picture to IRS-CI for future enforcement areas; and

• Modernize processes and infrastructure to allow efficient and effective use of 

resources.
IRS - 139

4.4 – Summary of IRS FY 2022 Request by Business Unit (including the Program 

Integrity Allocation Adjustment)

4.5 – Summary of IRS FY 2022 Identity Theft Budget Request

By Business Unit: Dollars % of TS

Appropriation Dollars % of ENFAppropriation Dollars % of OS

Appropriation Dollars % of BSMAppropriation Dollars % ofTotal Budget

Information Technology 2,370,703,165 53.30% 305,031,992 100.0% 2,675,735,157 20.34%

Wage & Investment 2,505,410,796 85.19% 276,687,263 5.06% 213,835,324 4.81% 2,995,933,383 22.77%

Small Business/Self-Employed 2,332,417,204 42.70% 2,332,417,204 17.73%

Facilities Management and Security 

Services

1,144,142,685 25.72% 1,144,142,685 8.70%

Large Business and International 785,308 0.03% 1,003,019,659 18.36% 1,008,138 0.02% 1,004,813,105 7.64%

Criminal Investigation 722,677,719 13.23% 3,867,431 0.09% 726,545,150 5.52%

Chief Counsel 23,388,595 0.80% 400,564,811 7.33% 34,509 0.00% 423,987,915 3.22%

Human Capital Office 310,036,846 6.97% 310,036,846 2.36%

Tax Exempt & Government Entities 8,160,951 0.28% 254,943,157 4.67% 263,104,108 2.00%

Taxpayer Advocate Service 235,058,642 7.99% 204,661 0.00% 235,263,303 1.79%

Corporate Reserve and Payments 62,261,204 2.12% 124,255,498 2.27% 36,197,915 0.81% 222,714,617 1.69%

Appeals 233,847,080 4.28% 233,847,080 1.78%

Research, Applied Analytics, and 

Statistics

2,959,519 0.10% 28,982,867 0.53% 52,159,280 1.17% 84,101,666 0.64%

Chief Financial Officer 23,549,840 0.43% 73,394,485 1.65% 96,944,325 0.74%

Privacy, Governmental Liaison and 

Disclosure

42,964,962 1.46% 2,191,749 0.04% 77,046,650 1.73% 122,203,361 0.93%

Procurement 73,691,231 1.66% 73,691,231 0.56%

Communications & Liaison 17,355,843 0.59% 5,895,867 0.11% 29,474,834 0.66% 52,726,544 0.40%

Online Services 41,179,204 1.40% 41,179,204 0.31%

Return Preparer Office 830,499 0.03% 13,951,991 0.26% 219,094 15,001,584 0.11%

Enterprise Digitalization and Case 

Management Office

27,976,853 0.51% 0.00% 27,976,853 0.21%

Equity, Diversity & Inclusion 33,559,310 0.75% 33,559,310 0.26%

Front Office2 520,467 0.02% 496,453 0.01% 21,344,524 0.48% 22,361,444 0.17%

Whistleblower Office 7,427,697 0.14% 7,427,697 0.06%

Office of the Chief Risk Officer 6,129,347 0.14% 6,129,347 0.05%

Office of Professional Responsibility 3,937,139 0.07% 3,937,139 0.03%

Taxpayer First Act Office 0.00% 1,145,961 0.03% 1,145,961 0.01%

Total 2,940,875,990 5,462,822,847 4,448,195,390 305,031,992 13,156,926,219

Note: These figures reflect full requirements before taking any proposed reductions (Operations Support Hiring Reduction/Delay, FMSS Physical Infrastructure/Security Reduction/Delay, IT Reduction/Delay).

2 Includes Commissioner, Chief of Staff, DCOS, DCSE offices, and Project Management Offices for ACA/FATCA and Services & Enforcement.

Taxpayer Services Enforcement Operations Support BSM Total

Bureau: Internal Revenue Service 

Summary of FY 2022 Request $000 FTE $000 FTE $000 FTE $000 FTE

FY 2021 Operating Plan $78,519 1,027 $116,257 1,278 $6,902 28 $201,678 2,333

Changes to Base:

Maintaining Current Levels (MCLs) $3,691 $4,113 $257 $8,061

Pay Annualization (1.0% average pay raise) 196 241 16 453

Pay Raise (2.7% average pay raise) 2,807 2,826 183 5,816

Non-Pay 1 303 9 313

FERS Contribution Increase 687 743 49 1,479

Subtotal FY 2022 Changes to Base $3,691 $4,113 $257 $8,061

FY 2022 Current Services $82,210 1,027 $120,370 1,278 $7,159 28 $209,739 2,333

Total FY 2022 Request (Before PIAA) $82,210 1,027 $120,370 1,278 $7,159 28 $209,739 2,333

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan $3,691 $4,113 $257 $8,061

Percent Change FY 2022 Request over FY 2021 Operating Plan 4.70% 3.54% 3.72% 4.00%

TAXPAYER SERVICES ENFORCEMENT OPERATIONS 

SUPPORT TOTAL
IRS - 140

4.6 – Summary of IRS FY 2022 ACA Budget Request

4.7 – Summary of IRS FY 2022 Cyber Security Budget Request

Bureau: Internal Revenue Service 

Summary of FY 2022 Request $000 FTE $000 FTE $000 FTE $000 FTE

FY 2021 Operating Plan $74,746 1,088 $14,719 139 $22,339 127 $111,804 1,354

Changes to Base:

Maintaining Current Levels (MCLs) $3,518 $584 $871 $4,973

Pay Annualization (1.0% average pay raise) 187 37 55 279

Pay Raise (2.7% average pay raise) 2,665 439 646 3,750

Non-Pay 1 2 6 9

FERS Contribution Increase 665 106 164 935

Subtotal FY 2022 Changes to Base $3,518 $584 $871 $4,973

FY 2022 Current Services $78,264 1,088 $15,303 139 $23,210 127 $116,777 1,354

Total FY 2022 Request (Before PIAA) $78,264 1,088 $15,303 139 $23,210 127 $116,777 1,354

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan $3,518 $584 $871 $4,973

Percent Change FY 2022 Request over FY 2021 Operating Plan 4.71% 3.97% 3.90% 4.45%

TAXPAYER SERVICES ENFORCEMENT OPERATIONS 

SUPPORT TOTAL

Bureau: Internal Revenue Service 

Summary of FY 2022 Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2021 Operating Plan $69,412 33 $107,796 77 $340,380 530 $53,552 19 $571,140 659

Changes to Base:

Maintaining Current Levels (MCLs) $468 $599 $6,918 $7,985

Pay Annualization (1.0% average pay raise) 15 35 233 283

Pay Raise (2.7% average pay raise) 211 414 2,720 3,345

Non-Pay 195 41 3,232 3,468

FERS Contribution Increase 47 109 733 889

Subtotal FY 2022 Changes to Base $468 $599 $6,918 $7,985

FY 2022 Current Services $69,880 33 $108,395 77 $347,298 530 $53,552 19 $579,125 659

Program Increases:

Putting Taxpayers First 27,000 45 27,045

User Authentication 27,000 27,000

Taxpayer Experience Strategy 45 45

Ensure Fairness of the Tax System 366 366

Improve Live Assistance 427 427

IRS Integrated Modernization Business Plan 5,348 2 5,348 2

Subtotal FY 2022 Program Increases $27,000 $838 $5,348 2 $33,186 2

Total FY 2022 Request (Before PIAA) $96,880 33 $108,395 77 $348,136 530 $58,900 21 $612,311 661

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan $27,468 $599 $7,756 $5,348 2 $41,171 2

Percent Change FY 2022 Request over FY 2021 Operating Plan 39.57% 0.56% 2.28% 9.99% 10.53% 7.21% 0.30%

PIAA Program Increases

Increase Audit Coverage 216 216

Increase Collection Coverage 243 243

Expand Coverage in the Tax-Exempt Sector 49 49

Enhance Return Review Program 12 12

Enhance Enforcement Operations 5 5

Subtotal FY 2022 PIAA Investments $525 $525

Total FY 2022 Request Including PIAA $96,880 33 $108,395 77 $348,661 530 $58,900 21 $612,836 661

Dollar/FTE Change FY 2022 Request Including PIAA over FY 2021 Operating Plan $27,468 $599 $8,281 $5,348 2 $41,696 2

Percent Change FY 2022 Request Including PIAA over FY 2021 Operating Plan 39.57% 0.56% 2.43% 9.99% 10.53% 7.30% 0.30%

Note: This table does not include the $15 million in the Families First Coronavirus Response Act (FFCRA) (P.L 116-127), $750.7 million under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-36), the $509 million 

provided in the Consolidated Appropriations Act, 2021 (P.L. 116-260), the $1.86 billion provided by the American Rescue Plan (ARP) (P.L. 117-2), the $417 million Program Integrity Allocation Adjustment, and the $79 billion mandatory funding 

proposal.

TAXPAYER SERVICES ENFORCEMENT OPERATIONS 

SUPPORT BSM TOTAL
IRS - 141

4.8 – Summary of IRS FY 2022 Budget Request

Bureau: Internal Revenue Service 

Summary of FY 2022 Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2021 Operating Plan $2,587,606 25,989 $5,004,622 34,989 $4,104,102 12,037 $222,724 394 $11,919,054 73,409

Changes to Base:

Maintaining Current Levels (MCLs) $75,138 $148,473 $100,219 $4,165 $327,995

Pay Annualization (1.0% average pay raise) 5,930 11,650 4,699 163 22,442

Pay Raise (2.7% average pay raise) 48,152 94,603 38,157 1,327 182,239

Non-Pay 4,138 6,725 42,546 2,232 55,641

FERS Contribution Increase 16,918 35,495 14,817 443 67,673

Efficiencies/Savings ($5,494) (409) ($91) ($5,585) (409)

Increase e-File Savings (5,494) (101) (91) (5,585) (101)

Personnel Savings (308) (308)

Subtotal FY 2022 Changes to Base $69,644 (409) $148,473 $100,128 $4,165 $322,410 (409)

FY 2022 Current Services $2,657,250 25,580 $5,153,095 34,989 $4,204,230 12,037 $226,889 394 $12,241,464 73,000

Program Increases:

Putting Taxpayers First 35,459 55 36,294 96 104,333 143 176,086 294

User Authentication 27,000 27,000

Taxpayer Experience Strategy 8,459 55 36,294 96 104,333 143 149,086 294

Ensure Fairness of the Tax System 270,858 1,820 69,409 13 340,267 1,833

Improve Live Assistance 248,167 4,203 69,833 318,000 4,203

Integrated Modernization Business Plan 78,143 18 78,143 18

Electric Vehicles and Associated Infrastructure 2,576 390 2,966

Subtotal FY 2022 Program Increases $283,626 4,258 $309,728 1,916 $243,965 156 $78,143 18 $915,462 6,348

Total FY 2022 Request (Before PIAA) $2,940,876 29,838 $5,462,823 36,905 $4,448,195 12,193 $305,032 412 $13,156,926 79,348

Dollar/FTE Change FY 2022 Request over FY 2021 Operating Plan $353,270 3,849 $458,201 1,916 $344,093 156 $82,308 18 $1,237,872 5,939

Percent Change FY 2022 Request over FY 2021 Operating Plan 13.65% 14.81% 9.16% 5.48% 8.38% 1.30% 36.96% 4.57% 10.39% 8.09%

PIAA Program Increases

Increase Audit Coverage 109,317 1,028 39,493 15 148,810 1,043

Increase Collection Coverage 113,122 1,164 46,334 20 159,456 1,184

Expand Coverage in the Tax-Exempt Sector 29,952 244 7,998 37,950 244

Enhance Return Review Program 3,388 60 34,953 38,341 60

Enhance Enforcement Operations 31,673 23 667 32,340 23

Subtotal FY 2022 PIAA Investments $287,452 2,519 $129,445 35 $416,897 2,554

Total FY 2022 Request Including PIAA $2,940,876 29,838 $5,750,275 39,424 $4,577,640 12,228 $305,032 412 $13,573,823 81,902

Dollar/FTE Change FY 2022 Request Including PIAA over FY 2021 Operating Plan $353,270 3,849 $745,653 4,435 $473,538 191 $82,308 18 $1,654,769 8,493

Percent Change FY 2022 Request Including PIAA over FY 2021 Operating Plan 13.65% 14.81% 14.90% 12.67% 11.54% 1.59% 36.96% 4.57% 13.88% 11.57%

TAXPAYER SERVICES ENFORCEMENT OPERATIONS 

SUPPORT BSM TOTAL