The IRS’ Inflation Reduction Act-funded (PL 117-169) initiative to move tax filing, correspondence, and assistance services online is coming along faster than expected, Treasury Secretary Janet Yellen said November 7 in prepared remarks on new features taxpayers can expect next tax season.
Unveiled in August, the “Paperless Filing Initiative” is how the agency is branding its efforts to use Inflation Reduction Act resources to modernize tax administration with a Service-wide shift away from the well-documented COVID-19-era piles of unprocessed filings at IRS facilities.
In prepared remarks providing a progress update, Yellen announced a self-imposed goal set forth over the summer was reached three months early. The IRS had hoped to allow taxpayers to, by the start of the filing season, respond to notices online. This project started with nine notices in February and as of October 27, 35,000 taxpayer responses were received via the Document Upload Tool. The plan was to expand the tool to all notices.
“I am proud to announce that we met this goal last month, much ahead of schedule,” Yellen said. “The impact will be significant and far-reaching. By the start of the filing season, taxpayers will be able to electronically file 20 additional tax forms, including some of the most common forms for businesses.”
This past filing season, the IRS was able to reduce call wait times, which ballooned to, on average, about 30 minutes during the pandemic. In 2022, the IRS’ Level of Service for its phone lines was around 15%, but 85% a year later as more customer service representatives were hired and voice or chat bots helped resolve a chunk of taxpayer questions without the need to wait on the phone.
85% remains the goal again for filing season 2024, “meaning the vast majority of callers will be connected to live assistors and get support,” according to Yellen. “We’ll also commit to an average call wait time of five minutes or less, and nearly all callers will be able to take advantage of a callback option in the rare situations in which the wait time is much longer.”
Voice bot technology will also be expanded to the Where’s My Refund? Tool, Yellen announced, building on existing functions like helping taxpayers set up a payment plan for outstanding tax balances. She said the bots “will provide clearer and more detailed information so taxpayers can address barriers to processing their returns and receive their refunds quickly.”
Brick-and-mortar Taxpayer Assistance Centers (TACs) have been reopened throughout the year, and new locations have been added. Saying there is “sometimes no substitute for face-to-face support,” Yellen also announced TAC availability will be expanded with a combined 8,000 more hours across the country.
“The ambitious targets we’ve set and will keep setting are achievable but by no means easy,” she said in closing. “And while we’ll all benefit, it is IRS staff who will do the hard work to get us there. So, alongside investing in customer service and new systems, we’re continuing to invest in our greatest asset: the IRS workforce. We’re hiring even more employees focused on taxpayer services” alongside enforcement staff. So far, according to Yellen, the IRS has collected $160 million in owed taxes from millionaires “in just a few months.”
These benchmarks and others, such as the Direct File pilot program and the much-anticipated online portal for Inflation Reduction Act energy credits, were highlighted in an accompanying IRS fact sheet. See here for the full release.
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