Congressional Budget Justification & Annual Performance Report and Plan
Section II – Annual Performance Plan and Report
0426 Publ 4450 (PDF) · 2026-10-03 edition · updated 2026-10-04 · United States
A – Budget and Performance¶
Treasury carries a great responsibility for fostering prosperity and security for the American people. The IRS plays a critical role both in the U.S. economy and globally to meet the needs of the nation. The Treasury Strategic Plan 2026–2030 1 charts a course to guide meeting the responsibilities to the public. As the Bureau Strategic Plans are finalized, more information on measures such as validation and verification of data and explanations of results will be developed. Subsequently, the IRS will release its Strategic Plan 2026-2030, which focuses our efforts on delivering a modern taxpayer experience, strengthening compliance, modernizing our operations, providing a renewed commitment to taxpayer privacy, and addressing the tax gap.
2.1 – Budget Activities¶
Dollars in Thousands
Taxpayer Services Resource Level
Pre-Filing Taxpayer Assistance and Education
FY 2021
Actual
FY 2022
Actual
FY 2023
Actual
FY 2024
Actual
FY 2025
Actual
FY 2026 Enacted
FY 2027 Request
$674,187 $685,038 $765,860 $891,895 $959,064 $854,152 $797,159
Appropriated 658,343 677,927 732,797 765,985 757,316 782,013 782,013 Resources
Reimbursables 142 75 176 277 74 139 146
Unobligated Balances 1,500 15,000 29,324 11,000 15,000 15,000 from Prior Years
IRA Funding Usage 17,063 96,308 190,674 57,000
Resources from Other 14,202 7,036 823 Accounts 1
Filing & Account $2,574,103 $2,645,899 $3,142,688 $3,304,501 $3,479,760 $2,968,306 $2,773,944 Services
Appropriated 1,927,220 2,111,293 2,118,270 2,390,038 2,358,301 2,254,593 2,348,956 Resources
Reimbursables 39,307 32,505 27,069 27,220 22,916 42,861 45,004
User Fees 64,900 78,900 3,900 520,404 2,900 256,400
Unobligated Balances 9,055 2,129 9,783 1,494 89,553 91,000 55,000 from Prior Years
IRA Funding Usage 1,073 872,050 365,346 1,006,091 579,852 68,584
Resources from Other 533,622 420,000 111,616 Accounts
Budget Activity Total $3,248,291 $2,646,584 $3,908,547 $4,196,396 $4,438,824 $3,822,458 $3,571,103
Full-time Equivalents 32,025 31,658 37,469 38,760 39,012 31,058 30,565 (FTE)
1 Includes Emergency Paid Leave, PCA, and Covid Supplemental Funds.
1 home.treasury.gov/about/budget-financial-reporting-planning-and-performance/strategic-plan
Section II – Annual Performance Plan and Report 15
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
Dollars in Thousands
Enforcement Resource Level
FY 2021
Actual
FY 2022
Actual
FY 2023
Actual
FY 2024
Actual
FY 2025
Actual
FY 2026 Enacted
FY 2027 Request
Investigations $725,362 $792,024 $865,341 $993,932 $1,085,710 $1,026,553 $1,084,908
Appropriated 630,093 674,705 720,335 730,339 723,167 809,106 676,237 Resources
Reimbursables 1,950 2,152 45,400 34,562 38,329 53,266 55,929
Offsetting Collections 57,370 64,628 6,372 13,539 39,874 50,152 52,659 (Non-reimbursable)
User Fees 300,000
Unobligated Balances 27,591 45,603 28,889 24,684 18,589 35,000 from Prior Years
IRA Funding Usage 34,548 182,096 256,921 78,946
Transfers In/Out 136 85 119 67 51 83 83
Resources from Other 8,222 4,852 29,678 8,645 8,780 Accounts 1
Exam & Collection $4,302,694 $4,544,349 $4,785,362 $5,503,737 $6,102,057 $4,486,170 $4,175,349
Appropriated 3,987,323 4,268,195 4,196,705 4,160,701 4,006,797 4,033,962 3,299,780 Resources
Reimbursables 1,719 1,371 1,966 288 1,859 2,208 2,319
User Fees 667,000
Unobligated Balances 143,195 181,127 177,873 49,087 107,677 190,000 from Prior Years
IRA Funding Usage 261,300 1,133,938 1,782,909 57,000
Resources from Other 170,458 93,657 147,517 159,723 202,815 203,000 206,250 Accounts 1
Regulatory $158,990 $201,989 $167,792 $199,332 $210,614 $184,458 $159,910
Appropriated 132,507 176,447 127,446 132,224 150,238 155,932 126,358 Resources
Reimbursables 222 243 60 86 442 526 552
User Fees 33,000
Unobligated Balances 26,189 25,000 37,000 47,735 22,000 25,000 from Prior Years
IRA Funding Usage 3,142 19,287 37,933 3,000
Resources from Other 72 300 144 Accounts 1
Budget Activity Total $5,187,046 $5,538,363 $5,818,494 $6,697,001 $7,398,381 $5,697,181 $5,420,167
Full-time Equivalents 35,492 36,017 33,969 39,310 43,479 29,718 28,582 (FTE)
1 Includes Emergency Paid Leave, PCA, and Covid Supplemental Funds.
16 Section II – Annual Performance Plan and Report
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
Dollars in Thousands
Technology and Operations Support Resource Level
FY 2021
Actual
FY 2022
Actual
FY 2023
Actual
FY 2024
Actual
FY 2025
Actual
FY 2026 Enacted
FY 2027 Request
Infrastructure $937,590 $933,687 $1,042,452 $1,096,769 $952,442 $1,108,492 $953,498
Appropriated 885,606 912,624 890,992 901,871 886,698 892,795 331,060 Resources
Reimbursables 854 564 596 634 591 697 732
Unobligated Balances 16,656 5,343 16,422 1,745 5,225 20,000 from Prior Years
IRA Funding Usage 100,351 150,111 4,709 140,000 566,706
Resources from Other 34,474 15,156 34,091 42,408 55,219 55,000 55,000 Accounts 1
Shared Services $1,406,233 $1,381,274 $1,310,927 $1,467,098 $1,491,788 $1,380,606 $1,354,309
Appropriated 1,040,954 1,141,596 1,133,584 1,137,436 1,117,077 1,143,908 1,143,908 Resources
Reimbursables 27,874 28,433 42,146 41,177 25,177 29,698 31,183
Unobligated Balances 29,297 1,000 22,571 20,982 74,409 30,000 from Prior Years
User Fees 37,454
IRA Funding Usage 12,289 108,893 265,247 263,922 166,000 168,218
Resources from Other 308,107 160,501 3,734 2,257 11,204 11,000 11,000 Accounts 1
Information Services $2,852,713 $2,910,329 $3,499,991 $3,795,329 $4,246,628 $4,079,035 $3,882,670
Appropriated 2,061,216 1,988,182 2,047,004 1,587,191 1,552,614 1,123,056 1,123,056 Resources
Reimbursables 26,344 27,036 27,562 30,188 27,641 32,605 34,235
User Fees 408,044 291,706 9,872
Recoveries from Prior 9 10,132 6,620 6,620 Years
Unobligated Balances 35,134 112,959 67,422 135,919 186,398 225,000 from Prior Years
IRA Funding Usage 48,676 1,275,636 2,040,842 2,467,164 2,688,754 2,716,009
Resources from Other 321,975 441,771 72,496 1,180 2,679 3,000 2,750 Accounts 1
Budget Activity Total $5,196,536 $5,225,290 $5,853,370 $6,359,196 $6,690,858 $6,568,133 $6,190,477
Full-time Equivalents 11,867 12,041 12,369 13,118 13,919 9,550 9,585 (FTE)
1 Includes Emergency Paid Leave, PCA, and Covid Supplemental Funds.
Section II – Annual Performance Plan and Report 17
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
2.2 – Performance Measures¶
Percent of Reportable IT Investments within +/- 10% Schedule Variance at the Investment Level 9
100.0% 87.5% 92.8% 71.4% 30.0% 90.0% 90.0% 90.0%
Key: B – Baseline; I – Indicator; TBD – To Be Determined; N/A Not Applicable
1 New FY 2022. Historical data provided for comparative purposes.
2 New FY 2026. Baseline in FY 2026 and report as a measure with a target starting FY 2027.
3 Audits of high-income individuals may take a revenue agent upwards of 250 hours to complete.
4 Due to the timing of hiring and the start date of the lengthy training cycle, the impact of hiring on performance is not immediate.
5 The impact of hiring on performance is not immediate due to required training for new Revenue Agents and the average case cycle time of about 36 months for these large corporations.
6 The impact of hiring on performance is not immediate due to required academy, on-the-job training (6+ months), and the average time it takes to complete an investigation (400-500 days).
7 Target based on industry standard.
8 FY 2025, the name changed from Percent of Major IT Investments within +/- 10% Cost Variance at the Investment Level.
9 FY 2025, the name changed from Percent of Major IT Investments within +/- 10% Schedule Variance at the Investment Level.
18 Section II – Annual Performance Plan and Report
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
2.3 – Performance Measure Description¶
Budget Level Performance Measure Description
| Total Ending Inventory | The total number of accounts management and correspondence inventory. |
|---|---|
| Percent of Closures to Receipts | The number of adjustment cases closed divided by the number of adjustment cases received, shown as a percentage. |
| Customer Accuracy – Tax Law (Phones) | The number of correct answers given by a live assistor on Toll-free tax law inquiries divided by the total number of inquiries, shown as a percentage. |
| Customer Accuracy – Customer Accounts (Phones) |
The number of correct answers given by a live assistor on Toll-free account inquiries divided by the total number of inquiries, shown as a percentage. |
| Timeliness of Critical TE/ Tax Products to the Public |
The number of Critical Tax Exempt/ tax products available to the public seven calendar days before the offcial IRS start of the individual fling season divided by the total number of products, shown as a percentage. CTB tax products are forms, schedules, instructions, and publications used by large number of TE/ reasonably accurate return or form by the fling date occurring during the fscal year (e.g., income tax, excise tax, exempt organization return, etc.). |
| Timeliness of Critical Individual Filing Season Tax Products to the Public |
The number of Critical Individual Filing Season (CIFS) tax products available to the public seven calendar days before the offcial IRS start of the (individual) fling season divided by the total number of products, shown as percentage. CIFS tax products are those tax forms, schedules, instructions, and publications required by large number of flers to prepare a complete and reasonably accurate Individual Income Tax Return. |
| Enterprise Self Assistance Participation Rate (ESAPR) |
The number of taxpayer self-assisted services completed divided by the total number of services, shown as a percentage. |
| Assistor Service Rate (ASR) | The number of completed contacts by assistors through phone or live chat divided by contacts received, shown as a percentage. |
| Enterprise Service Completion Rate (ESCR) |
The number of completed services through phone, live chat, and bots divided by contacts received, shown as a percentage. |
| Examination Effciency – Individual (1040) |
The sum of all individual 1040 returns closed by Small Business/ Taxpayer Services, and Large Business and International (Field Exam and Correspondence Exam programs) divided by the total full-time equivalent expended in relation to those individual returns. |
| Time to Start Compliance Resolution | The number of all individual income tax enforcement cases started within six months of the return posting date, divided by the total number of cases closed, shown as a percentage. |
| Time to Resolve Compliance Issue After Filing |
The median time it takes to close all individual income tax enforcement cases in days (excluding disaster, bankruptcy, and TEFRA cases for exam and collection cases that are not closed as full paid), starting from fling date. |
| Repeat Non-Compliance Rate | The number of individual taxpayers in a fscal year with additional non-compliance two years after the initial tax year that contains a fling, payment, or reporting compliance issue, divided by the total number of taxpayers, shown as a percentage. |
| Collection Coverage | The volume of collection work disposed divided by the total volume of collection work available, shown as a percentage. |
Section II – Annual Performance Plan and Report 19
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
Budget Level Performance Measure Description
| Exam Starts - High Income Individuals | The number of examinations started during the fiscal year of individuals with a total positive income of $10 million and above. |
|---|---|
| Exam Starts - Partnerships | The number of partnership examinations started during the fscal year. |
| Exam Starts - Large Corporations | The number of examinations started during the fscal year of large corporate returns reporting assets of $250 million and above. |
| Cost to Collect $100 | The cost of collecting $100 is computed as total operating costs divided by gross collections multiplied by 100. Operating costs are comprised of items charged to discretionary appropriations, mandatory appropriations, and user fees. This includes costs charged to the IRA, which was enacted August 12, 2022. |
| Criminal Investigations Completed | The total number of subject criminal investigations completed during the fscal year, including those that resulted in prosecution recommendations to the Department of Justice as well as those discontinued due to a lack of prosecution potential. |
| Conviction Rate | The total number of convictions divided by the total of adjudicated criminal cases, shown as a percentage. |
| Rentable Square Feet per Person | The amount of Rentable Square Feet the IRS maintains per person requiring space. |
| Percent of Aged Hardware | The quantity of IT hardware in operation past its useful life divided by the total hardware in use, shown as a percentage. |
| Percent of Reportable IT Investments within +/- 10% Cost Variance at the Investment Level |
Number of reportable IT investments within +/-10 percent variance between planned total cost and projected/ of reportable IT investments in that fscal year, shown as a percentage. |
| Percent of Reportable IT Investments within +/- 10% Schedule Variance at the Investment Level |
Number of reportable IT investments within +/-10 percent variance between planned days and projected/ reportable IT investments in that fscal year, shown as a percentage. |
2.4 – Performance Summary¶
In FY 2025, the IRS tracked 24 budget-level performance measures, including 18 with established targets and six indicators without targets. Overall, the IRS met or exceeded nine of the 18 targets. Performance was strongest in Taxpayer Services, mixed in Enforcement, and more limited in Technology and Operations Support.
Taxpayer Services¶
performance outcomes reflect a strong filing season execution and continued improvement in service delivery. Timeliness of Critical Individual Filing Season Tax Products to the public was 97.3 percent, exceeding the 91 percent target, with 110 of 113 products delivered on time. There were no major tax law changes affecting filing season preparation which supported this performance result. The Enterprise Self-Assistance Participation Rate reached 96.6 percent, surpassing the 94 percent target. Self-assisted services totaled approximately 2.8 billion, a 21.7 percent increase from FY 2024, while employee-assisted services declined 1.7 percent to 99.1 million. Total services provided increased 20.7 percent to approximately 2.9 billion, reflecting continued migration to digital and automated channels.
20 Section II – Annual Performance Plan and Report
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
To support a shift toward a digital-first taxpayer experience, the IRS is modernizing how it measures service performance by introducing two new enterprise metrics: the Assistor Service Rate and the Enterprise Service Completion Rate. These metrics reflect Taxpayer Services’ broader effort to modernize service channels and better align performance measurement with how taxpayers interact with the IRS today. Both measures will establish baseline results in FY 2026, with performance targets beginning in FY 2027.
Together, these metrics provide a more comprehensive and integrated view of the taxpayer service experience across both live and automated channels. The Assistor Service Rate measures the percentage of services completed by assistors through live interactions, including telephone assistance and live chat.
The Enterprise Service Completion Rate expands upon this view by capturing a holistic picture of service completion across multiple service channels. In addition to live telephone assistance and live chats, the Enterprise Service Completion Rate reflects continued advancements in automated and digitally enabled services, including vendor services, voicebots, and chatbots. By evaluating performance across these various platforms, the Enterprise Service Completion Rate demonstrates how well the IRS is integrating technology with traditional service methods to meet taxpayer needs efficiently and effectively.
The introduction of these metrics strengthens the IRS’s ability to measure performance in a way that reflects today’s service environment, which combines human-assisted support with automated, self-service tools. This integrated approach enhances visibility into service delivery outcomes and supports the agency’s broader goal of delivering the best possible taxpayer experience through improved access, responsiveness, and service completion across all channels.
Enforcement¶
In FY 2025, enforcement operations demonstrated mixed results. The IRS completed 2,850 Criminal Investigations, a 14.9 percent increase from FY 2024, exceeding the 2,500 target, driven by increased staffing and a focus on shorter cycle-time cases. The criminal conviction rate declined slightly from FY 2024 and remained below target, reflecting reliance on external partners, including the Department of Justice and U.S. Attorney’s Offices, for prosecution and court outcomes. Collection Coverage was 38.8 percent, exceeding the 37.2 percent target but decreasing 0.8 percent from FY 2024; net dispositions increased 2.6 percent, while total available inventory rose 3.3 percent, supported by the resumption of delinquent return and balance due notices. Exam Starts for Large Corporations with assets of $250 million or more totaled 1,483, a 17.4 percent increase from FY 2024, exceeding the 1,375 target, with continued growth anticipated as newly trained employees reach full productivity.
Although the IRS continues to work closely with prosecutorial partners to maintain strong case selection and oversight, criminal conviction rate declined slightly from FY 2024 and remained below the FY 2025 target as resources were shifted to other priorities. IRS Criminal Investigation must depend on partners outside IRS control, including reliance on Department of Justice and U.S. Attorney's office, to accept its cases for prosecution and move them through the courts.
Section II – Annual Performance Plan and Report 21
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report…¶
Within Technology and Operations Support, the IRS notably exceeded its goal for reducing aged hardware. Percent of Aged Hardware was 13.1 percent, outperforming the 20 percent industry standard target, reflecting focused hardware refresh strategies and timely implementation to improve infrastructure reliability and operational efficiency.
In FY 2025, the IRS advanced its transformation agenda through phased development of major modernization initiatives aimed at substantially completing most efforts within the next two years. The focus is on expanding automation, strengthening enterprise data integration, and improving system interoperability to enhance taxpayer service and compliance operations. Key initiatives include the Enterprise Data Platform (EDP) to standardize and secure enterprise data access, the Zero Paper initiative to digitize paper submissions through AI-enabled processing and reduce cycle times, and the Developer Experience Platform to streamline software development and deployment across the enterprise. Combined with continued investments in cybersecurity, cloud scalability, digital intake, and legacy system replacement, these efforts position the IRS to operate as a more agile, secure, and data-driven organization while delivering a seamless and reliable taxpayer experience.
The IRS also made great progress by expanding digital scanning and e-filing capabilities to reduce backlog and speed up processing. The IRS achieved online and mobile accessibility for 21 additional non-tax forms, bringing the total to 71 available for online submission.
Overall Performance Outlook¶
The IRS remains committed to maintaining current levels of performance and service delivery while managing all resources responsibly. To support continued success, the IRS is making targeted investments to build organizational capacity, including modernizing systems and processes and strengthening the tools and infrastructure needed to operate effectively in an evolving environment. These efforts position the IRS for greater resilience and sustained effectiveness.
Continued investment in digital services is expected to strengthen service delivery across channels and improve the taxpayer experience by expanding access to self-service options and reducing reliance on assisted channels. As system integration efforts continue, these investments are expected to support improved operational efficiency, more reliable service delivery, and the IRS’s ability to respond to evolving taxpayer needs and expectations.
Within Compliance and Technology and Operations Support, FY 2027 targets are supported by risk-based enforcement strategies, strengthened governance, and disciplined project management. The complexity and timing of high-income, partnership, and large corporate casework may contribute to year-to-year variability; however, continued use of data analytics and targeted resource alignment is expected to support steady progress in enforcement outcomes. In parallel, ongoing infrastructure modernization, reduced aged hardware, and facilities optimization are expected to enhance operational resilience, cybersecurity, and workforce productivity, supporting achievement of FY 2027 performance targets.
22 Section II – Annual Performance Plan and Report
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
B – Changes in Performance Measures¶
Performance Measure or Indicator Proposed Change and Justification
| 1. Customer Service Representative (CSR) Level of Service (LOS) (discontinue) |
Discontinue – This measure is discontinued for FY 2026 reporting in the FY 2027 CJ. The IRS is replacing LOS with Assistor Service Rate to more accurately capture how the IRS serves taxpayers today and better capture performance across live and automated service channels. |
|---|---|
| 2. LOS(A) (discontinue) | Discontinue – This measure is discontinued for FY 2026 reporting in the FY 2027 CJ. The IRS is replacing LOS(A) with Enterprise Service Completion Rate to more accurately capture how the IRS serves taxpayers today and better capture enterprise performance across all service channels. |
| 3. Assistor Service Rate (new FY 2026) | New – Assistor Service Rate is defned as the percent of services provided over the phone or through live chat completed by assistors. This measure provides information on Assistor Calls Answered, Informational Messages, Assistor Live Chat, Telephone Busies, Telephone Emergency Closed, Telephone Secondary Abandons, Telephone Disconnects, Live Chat Abandons. This measure will baseline in FY 2026 with no target reporting in the FY 2027 CJ and begin reporting a target effective for FY 2027 in the FY 2028 CJ. |
| 4. Enterprise Service Completion Rate (new FY 2026) |
New – Enterprise Service Completion Rate is defned as the percent of services provided to taxpayers through phone, bot, and live chat service channels. This measure provides information on Assistor Calls Answered, Informational Messages, Voice Bot Automation Completions, Assistor Live Chat, Chatbot Automation Completions, Telephone Busies, Telephone Emergency Closed, Telephone Secondary Abandons, Telephone Disconnects, Voice Bot Disconnects, Live Chat Abandons. This measure will baseline in FY 2026 with no target reporting in the FY 2027 CJ and begin reporting a target effective FY 2027 in the FY 2028 CJ. |
| 5. Taxpayer Satisfed with the IRS (discontinue) |
Discontinue – The interagency agreement was terminated as of 3/21/2025, leaving FY 2024 as the fnal score available for this measure; discontinued for FY 2026 reporting in the FY 2027 CJ. |
| 6. Percent of Major IT Investments within +/- 10% Cost Variance (modify) |
Modify – Name change to Percent of Reportable IT Investments within +/- 10% Cost Variance effective FY 2025; modifed for FY 2026 reporting in the FY 2027 CJ. For better alignment based on Treasury Reporting requirements, the Cost and Schedule variance data uses eligible reportable Investments. The name was changed to refect this alignment. |
| 7. Percent of Major IT Investments within +/- 10% Schedule Variance (modify) |
Modify – Name change to Percent of Reportable IT Investments within +/- 10% Schedule Variance effective FY 2025; modifed for FY 2026 reporting in the FY 2027 CJ. For better alignment based on Treasury Reporting requirements, the Cost and Schedule variance data uses eligible reportable Investments. The name was changed to refect this alignment. |
Section II – Annual Performance Plan and Report 23
This page intentionally left blank
FY 2027 Congressional Budget Justification & Annual Performance Plan and Report¶
Get a plain-English answer with a citation back to this text.
Ask AI about this code