The Internal Revenue Service Advisory Council (IRSAC) has released its latest annual public report, setting out recommendations to the Internal Revenue Service (IRS) on 29 issues.
The council provided recommendations on new and continuing issues in tax administration. These include IRS operations, taxpayer service, compliance and administrative matters.
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IRS CEO Frank J. Bisignano said: “IRSAC members have devoted significant time and expertise to analysing complex tax administration and the transformation work under way across the IRS.
“We appreciate their thoughtful recommendations, and we look forward to reviewing the insights provided in the 2025 report.”
The report has drawn strong criticism and concern from professional groups, with several organisations arguing that it exposes deepening pressures on the tax authority.
The New York State Society of Certified Public Accountants pointed to the report’s depiction of the agency’s condition, saying it shows how repeated cuts to funding and staffing are weakening the IRS’ ability to operate, even as new duties continue to be added.
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By GlobalDataThe report describes the Inflation Reduction Act’s $80bn funding boost as a rare positive turning point. That allocation allowed the IRS to start updating outdated technology, raising service standards and recruiting specialist staff after years of constrained investment.
According to the council, more than half of that funding has since been reversed, including almost all enforcement-related resources.
The report says this has forced the IRS to halt or scale back key parts of its multi‑year strategic operating plan. The report notes that the “cumulative effect of these rescissions has significantly impacted the IRS’ ability to conduct many of the improvements” set out in the plan.
The council also flags the impact of workforce reductions. The IRS is reported to have lost more than 25% of its staff, including over 2,000 IT personnel, since 2025.
At the same time, the agency has been required to implement more than 100 tax law changes stemming from recent legislation, adding to operational strain.
The report concludes that without predictable funding and adequate staffing, modernisation efforts will remain slowed or stalled, and pressure on taxpayers and intermediaries will persist despite growing expectations of the agency.
