The most sweeping and politically sensitive changes involve enforcement. The I.R.S. plans to introduce more data analytics and machine-learning technology to better detect cheating, and it aims to bolster its teams of revenue agents and tax attorneys so that the agency is not overwhelmed when auditing complicated business partnerships or corporations.
The I.R.S. plan repeatedly emphasizes that it will honor Ms. Yellen’s directive that the new money will not be aimed at increasing audit rates for taxpayers who earn less than $400,000 a year — a pledge meant to align with Mr. Biden’s promise not to raise taxes on low- and middle-income Americans. The plan echoes Ms. Yellen’s language that those audit rates will not rise above “historical levels,” but does not specify the levels, suggesting that audit rates could rise above their existing levels.
In a briefing with reporters on Thursday, however, Mr. Werfel said that in the near term, audit rates for those making less than $400,000 will not rise at all.
“We have years of work ahead of us, where we will be 100 percent focused on building capacity for higher-income individuals and corporations,” he said. “During this time, the audit rates for average taxpayers will not be increasing and as a result, we will not come close to hitting or exceeding any historic average rate.”
Honoring that commitment while enforcing the tax code could be complicated.
Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, said it would be a challenge for the I.R.S. to determine whether taxpayers reporting an income under $400,000 are doing so legitimately, without being able to audit some of them initially. Ultimately, she said, the agency will need to decide on an acceptable audit rate for people under that income level.
Mr. Werfel acknowledged that the I.R.S. would have to be alert in instances where taxpayers earn, for example, $5 million in a given year and $399,000 a year later.
“We might take a second look at that,” he said.
The plan lays out benchmarks for many of its goals but it leaves unanswered questions.
