Over a 10-year duration, the implementation of the IRS paperless system is expected to substantially reduce the deficit.

Treasury Secretary Janet Yellen commended the IRS for its new initiative, which she believes will contribute to a $2.6 trillion reduction in the federal deficit over the next decade. This initiative builds on the Biden administration’s commitment to reduce the deficit by $1 trillion through the Inflation Reduction Act.

The IRS’s “paperless processing” program aims to alleviate the burden of handling 200 million paper documents annually and save approximately $40 million in storage costs each year. Under this program, taxpayers can digitally submit documents to the IRS, facilitating a more efficient process.

According to Yellen, this initiative is a crucial element in implementing further improvements within the system, such as reducing errors in tax processing and providing secure data access for taxpayers. To sustain and expand on this progress, Yellen urges Congress to allocate stable and sufficient annual appropriations for the IRS.

In addition, Yellen praised the Biden administration’s efforts to address the tax gap, which is projected to reach $7 trillion over the next ten years. The IRS has made it a priority to hire personnel who specialize in auditing large corporations, complex business partnerships, and affluent individuals, which requires significantly more time compared to simpler audits. So far, the agency has recovered approximately $38 million from 175 delinquent tax cases involving millionaires.

Yellen expressed her appreciation for the recent announcement by the IRS and the milestones already achieved, highlighting the dedication and effectiveness of federal employees when provided with the necessary tools and resources to succeed.

CORRECTION: This story has been updated to clarify that the IRS paperless system will contribute to the Biden administration’s effort to reduce the federal deficit by $2.6 trillion over the next decade.