0426 Publ 5530 (PDF)

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p5530.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

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Dollars in Thousands

1 FY 2025 represents the Operating Plan level before the Inter-Appropriations Transfer (IAT) of up to $272 million from Enforcement to Taxpayer Services. Other Resources and Full-time Equivalents (FTE) reflect actuals.

2 FY 2027 User Fees will be allocated as follows: $1B to Enforcement and $256M to Taxpayer Services.

3 These amounts are adjusted to exclude IRA recoveries.

4 Unobligated balances from prior years includes unexpired amounts that remain available for obligation in the year shown (FY 2026 actual of $631 million and FY 2027 estimate of $70 million).

5 Reflects the rescissions to enforcement including $1.4 billion from the Fiscal Responsibility Act of 2023 (P.L. 118-5), $20.2 billion from the Further Consolidated Appropriations Act, 2024 (P.L.118-47), $20.2 billion from the Full-Year Continuing Appropriations and Extensions Act, 2025 (P.L. 1194), and $11.661 billion from the Consolidated Appropriations Act, 2026 (P.L. 119-75). In addition, this includes the proposed budget cancellation of $371 million of unobligated balances from Energy Security appropriated by P.L. 117-169.

6 Resources from Other Accounts reflect planned spending from Private Collection Agency retained earnings.

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The FY 2027 Budget requests $9.8 billion from Congress, a decrease in funding of $1.4 billion or 12.2 percent from the FY 2026 Enacted level of $11.2 billion. When including other resources, the total request of $15.9 billion represents a change of -2.5 percent from FY 2026.

The FY 2027 Congressional Justification represents a comprehensive assessment of the IRS’s financial condition and underscores its stewardship of public resources in service of the American people. Central to the Administration’s economic agenda is the implementation of the One Big Beautiful Bill Act (OB3) and Working Families Tax Cuts, which deliver historic tax relief measures such as No Tax on Tips, No Tax on Overtime, and expanded deductions for seniors and families. Throughout FY 2025, IRS employees focused on ensuring these benefits were delivered accurately, efficiently, and on time. To support this mission, the IRS aligned its efforts around three strategic priorities: data-driven enforcement, a simplified digital-first taxpayer experience, and a renewed commitment to taxpayer privacy.

Through modernized systems and advanced analytics, including artificial intelligence, the IRS strengthened its ability to identify fraud, reduce non-compliance, and protect taxpayers from identity theft, allowing enforcement staff to focus on higher-value work. At the same time, the IRS significantly improved taxpayer service by expanding online account capabilities and enhancing guidance and resources, while maintaining strong phone and in-person support. These efforts contributed to exceptional operational results in FY 2025, including the collection of more than $5.3 trillion in revenue, the processing of over 271 million returns and forms, and the issuance of approximately 113 million refunds totaling nearly $358 billion. Service improvements culminated in the most successful filing season in years, with telephone assistors answering 87 percent of calls and an average wait time of just three minutes.

These achievements were realized through smarter spending and operational discipline. An all-inclusive review of the IRS technology portfolio eliminated roughly $2 billion in planned, mostly one-time, IT spending, reduced inefficiencies tied to outdated paper processes, and redirected resources toward modernization. The IRS also maintained strong financial accountability, earning an unmodified audit opinion for the 26th consecutive year and demonstrating reliable internal controls over financial reporting. As the IRS continues its transformation, it remains focused on advancing technology, strengthening its workforce, and fostering a culture of efficiency, integrity, and accountability—laying the foundation for a modern IRS that Americans can trust to fulfill its mission. IRS is also modernizing how we measure customer service by sunsetting our legacy Customer Service Representative Level of Service measure and replacing it with new enterprise metrics to reflect new technologies and service channels.

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• Pre-Filing Taxpayer Assistance and Education funds expenses to assist with tax form preparation, including tax law interpretation, publication, production, and advocate services.

  • Filing and Account Services funds programs that provide filing and account services to taxpayers, process paper and electronically submitted tax returns, issue refunds, and maintain taxpayer accounts.

• Investigations funds the Criminal Investigative (IRS-CI) programs that investigate potential criminal and civil violations of tax laws, enforce criminal statutes relating to violations of tax laws and other financial crimes, and recommend prosecution as warranted.

  • Examinations and Collections funds programs that enforce the tax laws and increase compliance through Examination and Collection programs, which ensure proper payment and tax reporting.

  • Regulatory funds the development of published IRS guidance materials; interpretation of tax laws; internal advice to IRS on general non-tax legal issues; enforcement of regulatory rules, laws, and approved business practices; and support for taxpayers in the areas of pre-filing agreements, determination letters, and advance pricing agreements.

• Infrastructure funds administrative services related to space and housing, rent and space alterations, building services, maintenance, guard services, security countermeasures and non-IT equipment.

  • Shared Services and Support funds policy management, administration, IRS-wide research support; strategic planning; communications and liaison; protection of sensitive information and the privacy of taxpayers and employees; finance, human resources, printing and postage; business systems planning; and procurement.

  • Information Services funds staffing, equipment, and related costs to manage, develop, modernize, enhance, maintain, and operate the information systems supporting IRS critical business operations and tax administration programs.

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Dollars in Thousands

FTE Amount

FY 2026 Enacted 59,880 $11,195,365

Changes to Base:

FY 2027 Maintaining Current Levels (MCLs): $22,969

Pay Annualization (1.0% average pay raise) $22,969

Subtotal Changes to Base $22,969

FY 2027 Current Services 59,880 $11,218,334

Program Changes:

Program Increases 1,132 $94,363

Maintain Customer Service 1,132 $94,363

Program Decreases (4,875) ($1,481,329)

Reduction to Offset Unfunded FY 2026 MCLs (161) ($22,969)

Staff Reductions (4,714) ($777,841)

Non-Labor Reductions ($680,519)

Subtotal FY 2027 Program Changes (3,743) ($1,386,966)

FY 2027 President's Budget Request 56,137 $9,831,368

Pay Annualization (1.0% in 2026) +$22,969,000 / 0 FTE

• Per guidance issued by the Office of Management and Budget, funds are requested for annualization of the January 2026 1% average pay raise.

Maintain Customer Service +$94,363,000 / +1,132 FTE

• This investment will provide funding to meet OB3-related phone and online demands, to implement OB3-related outreach activities that inform taxpayers about new legislative initiatives and provide support to taxpayers and tax practitioners on multiple platforms that encourage voluntary tax compliance.

• Implementing the OB3 is a coordinated and involved effort to turn new law into stellar services for taxpayers and tax practitioners. OB3 implementation updates involve careful planning, clear communication, and strong coordination across IRS Business Units to ensure the IRS is responsive to taxpayers’ needs while improving the taxpayer experience.

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• The IRS toll-free telephone customer service operation is one of the world’s largest service providers and is a key part of the IRS’s service delivery. Taxpayer experience research continues to indicate phone service as a preferred service channel. If the IRS does not receive full funding, taxpayers will experience longer telephone wait times, delayed responses on the IRS’s online service portals and to correspondences. Historically, when taxpayers are unable to access streamlined and efficient service channels, telephone and online communication demands shift to higher cost service channel options such as paper correspondence. Taxpayers’ use of less efficient service channels will negatively impact taxpayers’ ability to remain tax compliant.

Reduction to Offset Unfunded FY 2026 MCLs  -$22,969,000 / -161 FTE

• The IRS will reduce staffing to offset the unfunded FY 2027 annualization cost of the FY 2026 1.0% pay raise.

Staff Reductions  -$777,841,000 / -4,714 FTE

• IRS is in the process of conducting workforce restructuring efforts that will result in fewer staff by the end of FY 2027. This effort will yield significant savings to the taxpayer, once fully implemented.

Non-Labor Reductions -$680,519,000 / 0 FTE

• IRS is in the process of conducting workforce restructuring efforts that will result in reduced non-labor spending by the end of FY 2027.

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Key: B – Baseline; I – Indicator; TBD – To Be Determined; N/A Not Applicable

1 New FY 2026. Baseline in FY 2026 and report as a measure with a target starting FY 2027.

2 Audits of high-income individuals may take a revenue agent upwards of 250 hours to complete.

3 Due to the timing of hiring and the start date of the lengthy training cycle, the impact of hiring on performance is not immediate.

4 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.

5 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).

6 Target based on industry standard.

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 agency for greater resilience and sustained effectiveness.

In FY 2025, the IRS advanced its mission across Taxpayer Services, Enforcement, and Technology and Operations Support while operating under resource constraints and continuing modernization. Performance reflects strong digital adoption, efficient compliance activity, and measurable operational efficiencies. FY 2026 baselines and FY 2027 targets emphasize enterprise-wide service metrics and a more risk-based enforcement strategy. Beginning in FY 2026, the IRS will introduce two new enterprise service measures, Assistor Service Rate and Enterprise Service Completion Rate, to better capture performance across live and automated service channels and more accurately capture how the IRS serves taxpayers today. Both measures will establish baseline results in FY 2026, with performance targets beginning in FY 2027.

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Publication 5530 (Rev. 4-2026) Catalog Number 37696Q Department of the Treasury Internal Revenue Service www.irs.gov