It’s TaxQuips time from TaxMama.com® .
Today TaxMama® wants to talk to you about how the IRS is spending some of the money they got from the Inflation Reduction Act
When Congress granted the IRS about $80 billion dollars as part of the Inflation Reduction Act (IRA), I heard a lot of screaming and griping. Especially concerns about more aggressive collections and audit actions.
On the other hand, we have all had our complaints about how hard it is to reach the IRS; the IRS losing documents when you send them paper forms or responses; about how many tax forms could not be efiled; and how frustrating it is that you cannot simply respond to the IRS online.
There weren’t many objections from the public when Congress took back about $20 billion from the IRS ($10 billion from each of the next 2 years).
What taxpayers don’t really understand is – these funds are/were being used to make OUR lives easier.
An immediate example is this exciting announcement from the IRS about their paperless project initiative, effective 2024 and 2025 .
As we came to realize, rather forcefully, during the COVID19 shutdowns, the overwhelming mountain of paper tax returns and paper correspondence was choking the system. Even without COVID19 shutdowns, so many documents were either lost, misplaced, or never (MANUALLY) scanned or keyed into a taxpayer’s account. Yes, they had to be scanned manually, or keyed in manually, so even in normal times, it could take 3 months for paper submissions to appear on a taxpayer’s transcript or in an account.
Many of us in the tax community have been begging the IRS, for years, to be able to submit responses to notices online (some of that finally starting happening last year); to submit disclosures and attachments electronically – so that they can be found in the transcripts and correspondence files; and to make it possible to file several more tax forms electronically.
Well, it’s finally happening. The current IRS Commissioner, Danny Werfel, is moving forward rapidly to bring about the technological improvements that might bring the IRS into the 20th century. (Perhaps we’re not quite ready for the 21st century?)
One of his targets is to make many more tasks accessible to taxpayers with mobile phones. He has become aware that, while most people seem to have mobile phones, they might not have access to a reliable (or any) Internet connection at home. Being able to access IRS log-ins, file tax returns, upload copies of documents, and more – this would make it possible for more taxpayers to address some of their own basic filing, correspondence, and responses to simple notices.
The promise for 2024 is that Taxpayers will be able to digitally submit all correspondence, non-tax forms, and responses to notices; as a result, the IRS estimates more than 94% of individual taxpayers will no longer ever need to send mail to the IRS.
For 2025, expect that half of paper-submitted correspondence, non-tax forms, and notice responses will be processed digitally. Achieving this milestone will enable up to 60 million paper documents to be processed digitally every year. All paper documents—correspondence, non-tax forms, and notice responses–will be processed digitally by filing season 2026.
And what about paper documents from the past? Up to 1 billion historical documents will be digitized, improving customer service, giving taxpayers access to their data, and ultimately saving IRS approximately $40 million in annual storage costs.
Always liking to look for the silver lining – I think this is fabulous news. Add this digitization to Chuck Rettig’s initiative to expand communications into many more languages – and fewer taxpayers will feel helpless when interacting with the IRS.
And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion
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