On November 4, 2022, the Tax Exempt and Government Entities division of the IRS (TE/GE) released its Fiscal Year 2023 Program Letter (2023 Program).

The 2023 Program is intended to dovetail with the IRS Strategic Plan FY2022-2026. Under that Strategic Plan, the IRS's Mission is: "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." The Plan includes key performance indicators in areas of Service, Enforcement, Transformation, and People. For Enforcement, the IRS's objectives are to:

  • Enforce the tax law fairly and efficiently to increase voluntary compliance and narrow the tax gap;
  • Improve operations to effectively and efficiently identify and address non-compliance;
  • Enhance enforcement efforts to collect unpaid taxes in a fair and impartial manner; and
  • Proactively identify current and emerging fraud schemes and other threats using real-time intelligence and analytics.

A key pillar of the 2023 Program is to "Strengthen Compliance Activities (Enforcement)". TE/GE will focus on collaboration with IRS divisions of Criminal Investigations; Large Business & International; Small Business/Self-Employed; and Research, Applied Analytics & Statistics. A TE/GE priority includes selecting and examining returns for compliance action. TE/GE's collaboration is aimed at creating a unified compliance plan to enable effective tax administration.

As for People, the 2023 Program indicates that TE/GE hired 187 new employees in FY2022, and TE/GE anticipates a greater number in FY2023. In the Service arena, TE/GE expects to continue with appropriate compliance workstreams – education letters, compliance checks, or exams – in order to balance TE/GE and taxpayer burdens for effective enforcement of tax laws.

As calendar year 2022 enters its end-of-life phase, the TE/GE Fiscal Year 2023 Program Letter gives tax practitioners of an idea of what we might see in the near future and into 2023, at least from a tax-exempt and governmental entities perspective.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.