The IRS is planning to hire as many accountants and attorneys as it takes to crack down on rich people 'that are not paying the taxes they owe'

• The IRS released its strategic plan for using Biden's $80 billion investment in the agency.
• It plans to dedicate a chunk of spending to stricter enforcement for high earners.

The Internal Revenue Service's long-awaited plan to overhaul its operations is finally here.

On Thursday, the IRS released its Strategic Operating Plan for the next decade, which details how it will use Democrats' $80 billion investment in the agency from the Inflation Reduction Act.

The plan outlines five core areas in which the IRS will dedicate the new funding, including improved customer service, digitizing the tax return process, and hiring a new workforce that is better equipped to handle taxpayers' needs. Treasury Secretary Janet Yellen said in a statement that the plan "shows how the IRS will continue this transformation by providing world-class service, upgrading decades-old technology, and reducing the tax gap by ensuring high earners play by the same rules as working and middle-class families."

Her latter point on cracking down on high earners is key in the IRS' plan. According to the press release, audits of the wealthy and large corporations have "plummeted" over the past decade due to the agency's lack of resources, and tax evasion in the top 1% surged to $160 billion per year.

"It takes up to 50 times longer for top talent to audit wealthy individuals and their related entities than to complete simple audits—up to 250 hours rather than five hours on average," the press release said. "Corporate audits similarly average hundreds of hours over two to four years. The IRS needs top talent to do this complex and time-consuming work."

That's why $41.7 billion of the $80 billion investment is dedicated to stricter enforcement actions for high earners and large corporations. Daniel Werfel, the IRS commissioner, wrote in a letter accompanying the plan that the agency will focus "enforcement resources on hiring the accountants, attorneys, and data scientists needed to pursue high-income and high-wealth individuals, complex partnerships, and large corporations that are not paying the taxes they owe."

According to the plan, households and businesses making under $400,000 will not see audit levels increase "relative to historic levels," but the IRS will improve its usage of data analytics and technology to identify individuals and businesses that are not complying with the tax code.

Werfel noted that since 2010, the IRS workforce has shrunk 20% to about 80,000 employees, leaving it significantly understaffed as the US population grew. While the Treasury Department previously estimated that Biden's investment in the agency would grow the workforce to 87,000 employees, the plan does not provide a specific estimate.

Still, Republican lawmakers have blasted the investment, with some claiming that it would target small businesses. "When House Republicans earn the majority, we will STOP Biden's army of 87,000 IRS agents hired to audit hardworking American families and small businesses," GOP Rep. Elise Stefanik wrote on Twitter in November.

Werfel told reporters on Thursday that "people who get W-2s or Social Security payments or have a small business should not be worried about some new wave of IRS audits. We're taking that off the table."

Still, the IRS' plan is partly dependent on whether it continues to receive consistent funding from Congress, and it is asking for $14.1 billion in fiscal year 2024, a 15% increase from 2023.