The Internal Revenue Service (IRS) has unveiled a series of initiatives aimed at bolstering tax enforcement efforts and advancing technological modernization. Funded by the Inflation Reduction Act, these initiatives are designed to ensure that large corporations fulfill their tax obligations while simultaneously enhancing service quality and embracing innovative technology. The IRS’s proactive approach reflects its commitment to fostering tax compliance and keeping pace with the evolving landscape of business taxation. Optima Tax Relief breaks down how the IRS plans to enforce against large corporations.
Table of Contents
Key Initiatives
- Leveraging Inflation Reduction Act Funding: The IRS is tapping into the resources provided by the Inflation Reduction Act to launch initiatives focused on large corporations. This strategic allocation of funds underscores the government’s commitment to addressing tax challenges and promoting fairness in the corporate tax landscape.
- Enhanced Tax Enforcement for Large Corporations: A primary focus of these initiatives is to bolster tax enforcement measures, particularly targeting large corporations. By ensuring that these entities fulfill their tax obligations, the IRS aims to create a level playing field and maintain the integrity of the tax system.
- Improving Service Quality: In addition to enforcement measures, the IRS is actively working to enhance service quality. This includes providing better support to taxpayers, streamlining processes, and ensuring that businesses receive the assistance they need. The goal is to make the tax system more accessible and user-friendly.
- Modernizing Technology with the Business Tax Account: The launch of the Business Tax Account is a significant step toward modernizing the IRS’s technological infrastructure. This digital platform aims to provide businesses with a more efficient and streamlined way to interact with the IRS, offering a user-friendly interface for managing tax-related activities.
- Expansion of Large Corporate Compliance program: The LCC program involves specialized audits to identify potential areas of non-compliance or tax avoidance. The LCC program specifically focuses on corporations with assets worth more than $24 billion and an average taxable income of about $526 million per year.
- Emphasis on High-Income Cases: The IRS is emphasizing enforcement geared toward high-income and high-wealth individuals who have not filed or paid their taxes. Specifically, the IRS is targeting those with incomes over $1 million and tax debt over $250,000. As of September 2023, the IRS has assigned 1,600 of these cases. They have collected $122 million in just 100 of the 1,600 cases.
- Launch of Mobile-Friendly IRS Forms: As of September 2023, the IRS has launched three mobile-friendly IRS forms, which taxpayers can submit electronically when completed. These forms include Form 15109, Request for Tax Deferment, Form 14039, Identity Theft Affidavit, and Form 14242, Reporting Abusive Tax Promotions and/or Preparers. They plan to launch Form 13909, Tax-Exempt Organization Complaint by the end of 2023. An additional 20 forms will launch early next year.
Conclusion
The IRS’s latest initiatives, fueled by funding from the Inflation Reduction Act, signify a commitment to strengthening tax enforcement for large corporations and simultaneously improving service quality. The launch of the Business Tax Account is a noteworthy step toward modernizing technology and providing businesses with a more user-friendly and efficient means of engaging with the IRS. As the tax landscape continues to evolve, these initiatives position the IRS as an adaptive and proactive entity, dedicated to ensuring tax compliance, fairness, and technological innovation in the business taxation sector.
