Investment in IRS Modernization Could Yield $851B, Treasury Reports
A new analysis by the Department of the Treasury and Internal Revenue Service estimates that implementing Inflation Reduction Act resources or investing in the IRS to modernize the U.S. tax system will result in about $561 billion in revenue from 2024 to 2034. If the investment is sustained, the revenue could reach up to $851 billion over the next decade. However, reducing investments in the IRS by about $20 billion could lead to a reduction in revenues of over $100 billion.
IRS Modernization could Generate $561 Billion Revenue
The Inflation Reduction Act investments are projected to modernize the IRS tax system, improving customer service and generating an estimated $561 billion in revenue between 2024 and 2034, according to a new analysis by the Department of the Treasury and Internal Revenue Service.
Increased Revenue with Sustained Investment
If the Inflation Reduction Act resources are sustained, the estimated revenue could surge to $851 billion over the coming decade, the Treasury reported on Tuesday.
Benefits of IT Modernization
The analysis states that IT modernization can lead to potential revenue benefits, including expanded data intake capacity and improved audit selection, resulting in increased enforcement productivity.
Impact of Rescinding Investment
The study points out that rescinding about $20 billion in IRS investments would result in over $100 billion reduction in revenue.
Benefits of Data Analytics and Technology Adoption
The Treasury emphasized that the new estimates reflect the advantages of data analytics and technology adoption, and the impact of deterrence on audited wealthy taxpayers.
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