The IRS has announced that it has started a new Digital Intake initiative with its initial efforts aimed at the digital scanning of Forms 940 (Employer’s Annual Federal Unemployment (FUTA) Tax Return) [IR-2023-41, 3/8/2023].
Making good on a plan. When the National Taxpayer Advocate urged the IRS to step up its digitalization efforts, the IRS noted that implementing digital initiatives was included in its Strategic Plan FY2022-2026 with funding secured through the Inflation Reduction Act (IRA; P.L. 117-169). The IRS noted that taxpayers continue to file paper employment tax returns with over 14 million paper returns received each quarter (see NTA Says Biggest Short-Term Opportunity to Improve E-Filing Exists With Business Tax Returns, 01/17/2023).
Digital Intake Initiative. The IRS announced that it has already scanned more than 120,000 paper Forms 940 since the beginning of 2023, 20 times more than the total for 2022. The IRS further announced that it will be moving on to scanning paper Forms 1040 and Forms 941 soon. Whiling scanning of documents at the IRS is not new, the IRS noted that it has leveraged new technologies for more efficient processing and storage. The scanning efforts are part of a multi-form, multi-solution scanning initiative known as Digital Intake. Acting IRS Commissioner Doug O’Donnell stated the IRS is “expanding scanning of more paper returns in the near future.”
Other improvements. The IRS also revealed that the Digital Intake Initiative is only one step towards transformative improvements for taxpayers. The IRS noted that it has increased staffing to telephone help lines and the Taxpayer Assistance Center. Also, the IRS is holding special Saturday hours to further aid taxpayers and has expanded the Document Upload Tool for use by individual taxpayers.
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