The IRS is poised to take a significant leap into the digital age following an announcement by Treasury Secretary Janet Yellen. Taxpayers will soon have the opportunity to submit documents electronically, advancing the agency’s transition toward a paperless system ahead of schedule. This initiative aims to enhance customer service and streamline processing speeds for the 2024 filing season.
What Happened: Yellen shared the remarks — part of her speech due to be delivered at the IRS headquarters — emphasizing the benefits of this change, as per an AP report.
"The impact will be significant and far-reaching, and we'll speed up processing times for the system as a whole,” Yellen’s prepared remarks read.
The push for digital submission is supported by increased funding from the Inflation Reduction Act, aiming to eliminate the longstanding issue of paper-heavy backlogs within the agency.
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By 2024, the IRS expects to enable the digital submission of most documents, along with the development of an electronic free file tax return system pilot. The ultimate goal by 2025 is full digitization of tax return processing, promising error reduction, lower storage costs, and potential annual savings of around $40 million for the IRS.
Why It Matters: However, this progress faces opposition from congressional Republicans proposing a $14 billion cut to the IRS budget. Yellen had criticized this move as “irresponsible,” and President Joe Biden has indicated he would veto the bill if it reaches his desk.
The IRS’s rapid digitalization plan is a response to outdated systems and potential service disruptions. The agency’s battle with these issues, particularly during potential government shutdowns, highlights the necessity of a paperless system to ensure uninterrupted taxpayer services.
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