The IRS has announced significant improvements to its services by allowing taxpayers to file major tax forms online. By 2025, the IRS plans to digitize its massive paper catalog, leading to faster refunds by up to four weeks for millions of taxpayers. These enhancements have been made possible due to increased funding from President Biden’s Inflation Reduction Act. Taxpayers will now be able to complete complex tax paperwork online or directly upload related documents to their IRS accounts, eliminating the need to mail hard copies.
Processing digital tax files takes the IRS much less time, resulting in quicker and more accurate refund issuance. This move towards electronic filing has been encouraged for years to avoid the laborious task of manually inputting data into the IRS’s outdated computer system. By 2025, the IRS will immediately digitize paperwork received by mail or fax using optical scanners to upload taxpayer data directly to their IRS accounts.
Treasury Secretary Janet L. Yellen is expected to announce the “Paperless Processing” initiative, which is seen as a crucial step towards other customer service improvements. The IRS estimates that 94 percent of individual taxpayers will no longer need to send mail to the agency once the program is launched in January.
This paperless project is part of a larger effort to improve customer service at the IRS, with Commissioner Daniel Werfel prioritizing various improvements since taking office. The IRS will also introduce a pilot program in 2024 that allows taxpayers to file digital returns for free. Additionally, the upgrades are expected to save the IRS tens of millions of dollars annually by reducing paper usage and storage costs.
The Inflation Reduction Act, passed in 2022, has authorized significant funding over the next decade for the IRS to enhance tax enforcement, customer service, and technology systems. The agency has been hiring extensively and investing in scanning technology to expedite return processing. These efforts have already yielded positive results, such as a significantly improved customer call answer rate and the elimination of a large backlog of unprocessed individual tax returns.