In 2022, Congress enacted the Inflation Reduction Act, P.L. 117-169, which added $80 billion to the IRS's budget over the next decade. While some funds have been rescinded and others reallocated from enforcement to operations, the IRS still has more appropriated resources than it has had in decades. In the Inflation Reduction Act Strategic Operating Plan FY2023-2031 (SOP), IRS Commissioner Danny Werfel indicated that the Service's transformation objectives include:

1. Renewed enforcement focus on taxpayers believed to be major contributors to the tax gap;
2. Modernization of operations using cutting-edge technology and data; and
3. Investment in people to reverse the effects of chronic underfunding.

Almost $46 billion has been allocated to enforcement efforts. The SOP states that enforcement will focus on:
• Large corporations;
• Large partnerships; and
• High-income/high-wealth individuals, including those making greater than $400,000 annually (focus taxpayers).

This may be a welcome relief to CPA firms who don't serve these taxpayers, but things aren't always as they appear. Modernizing operations through improved technology and data analysis will likely allow the IRS to identify more errors more efficiently, and this will likely affect all taxpayers.
Clients faced with unanticipated tax bills may assert that their CPA firm is responsible for the penalties and interest owed because, had the CPA prepared the tax return correctly or if the client had been properly advised, there would not have been a liability.