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2 December 2020 / COVID-19 IRS Updates

Coronavirus Delays IRS Reorganization

2 December 2020 > COVID-19 IRS Updates

COVID 19 has delayed plans for many organizations this year--including the IRS, which is in the midst of planning a reorganization following the signing of the Taxpayers First Act.

To successfully plan the reorganization, the IRS created the Taxpayer First Act office. This newly created team, consisting of employees, congressional committees, and other stakeholders, was formed as a way to start creating preliminary goals for the reorganization. While no plans have been released detailing the type of reorganization the IRS is designing, The GAO has identified challenges they believe the IRS is facing, “such as those related to areas of fragmentation, overlap, duplication, and high risk.” 

Although the IRS created a special team to work on the reorganization of the department, they announced in April that they won’t meet the original September 2020 date to announce reorganizing plans. Like many businesses and firms, COVID-19 left the IRS with workforce and operational challenges that have delayed the presentation of plans to Congress until December of 2020. 

Many are curious to see the reorganization plan that will be submitted in December. The IRS has been asked to present “outcome-oriented goals and performance measures” and to “identify specific actions to address long-standing management challenges.” It is expected that the IRS’s reorganization planning will be aimed to address long-standing issues involving improving taxpayer service and enforcement programs, as well as emerging challenges, such as those highlighted by the ongoing COVID-19 pandemic.

The reorganization is believed to be overdue, as many changes have taken place in the US since the last reorganization act was enacted in 1998. As complaints against the agency grew, the Taxpayer First Act of 2019 was signed into law on July 1, 2019. This act was created to improve strategies that were used when designing the IRS about 20 years ago. 

While no official plans have been shared, the new act is expected to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer-friendly agency by requiring it to develop a comprehensive customer service strategy, modernize its technology, and enhance its cybersecurity. With 20 years since the last major update to the agency, many are waiting for the long-awaited reorganization plan to be announced.

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Megan Weinberg

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