The frustrating paper-based processes that have long plagued both taxpayers and the Internal Revenue Service (IRS) may soon come to an end, providing much-needed relief.
According to an announcement by the Treasury Department on Wednesday, the IRS aims to enable taxpayers to digitally submit all agency correspondence by 2024, aligning with the next tax filing season. By the 2025 filing season, they strive to achieve paperless processing capabilities.
Furthermore, the IRS plans to digitize approximately 1 billion historical documents in its catalog by 2025, which currently incurs an annual storage cost of around $40 million.
During a visit to an IRS facility in McLean, Va., Treasury Secretary Janet Yellen emphasized the significance of the Paperless Processing Initiative and described it as a “massive transformation.” Yellen anticipates that this initiative will save 200 million pieces of paper annually, significantly reduce processing times, and expedite the refund process.
It is important to note that this initiative is voluntary, allowing taxpayers who prefer traditional paper methods to continue submitting paper returns and correspondence. However, by 2025, all incoming paper documents will be digitized.
The funds for this new initiative derive from an $80 billion allocation over the next decade authorized by the Inflation Reduction Act (IRA).
Treasury Secretary Yellen expressed her gratitude for the IRA and highlighted its role in transforming the IRS into a digital-first agency. She referred to the “Paperless Processing Initiative” as the key to unlocking additional customer service improvements.
Unfortunately, a portion of the new funding was reduced during debt limit negotiations between the White House and House Republicans. This reduction sparked outrage among lawmakers, including Rep. Chip Roy (R-Texas), who argued that reclaiming the funds would save billions in inflationary spending and protect American families and businesses.
Additonally, Secretary Yellen called on Congress to provide stable and sufficient annual funding for the IRS to maintain the agency’s modernization efforts.
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