Robert Kovacev, former senior litigation counsel in the Tax Division of the U.S. Department of Justice (DOJ), discussed the Internal Revenue Service's (IRS) recently released strategic operating funding plan which mentions more enforcement in areas that include employment taxes. Kovacev said businesses should start planning for audits now. He further stated that, "[a]ny taxpayer that the IRS has targeted for enforcement needs to start getting ready for audits now." Kovacev acknowledged that the urgency for audit preparation is "because now [employers] have a chance to… improve their compliance and make sure they are following the rules." Now that the agency has funding that includes an estimated $4.8 billion for business system modernization and $25.3 billion for operations support, the employment tax audit process is likely to improve and may involve using more technology in selecting who will be subject to an examination. Kovacev discussed how an artificial intelligence (AI) algorithm could look through thousands of tax returns and isolate "certain areas where there are anomalies and could do that in milliseconds," and added that audit targets based on statistical models will become more the norm. Kovacev suggested "the question is, what degree of human intervention is going to be involved?" He noted that the past use of algorithms at the IRS has at times "come up with results that were just incorrect" and stressed that a key issue when using AI for audit decisions would be if "there is meaningful supervision." Kovacev said that a way for businesses to test their level of compliance with employment tax law is to conduct internal and external audits. He noted there is merit to both of these types of audits. He said that larger employers with an "in-house" tax department responsible for filing tax returns and other levels of compliance "should absolutely be working on [internal audits]." For smaller employers without an integrated and internal tax system, Kovacev advised seeking outside help with an external audit, but also noted how larger employers could benefit from an external audit as well. A universal benefit of conducting an external audit is that these tax experts "see things from a variety of clients that may cut across industry groups… and would be able to use that knowledge to tell other taxpayers" that certain issues are being probed.