Three months following the conclusion of this year’s tax filing season, the IRS provided an update on how it has been, and plans to, implement funding from the Inflation Reduction Act (PL 117-169) to expand taxpayer assistance and online capabilities. (IR 2023-126; IR 2023-127)
In a press call July 13, Commissioner Danny Werfel told reporters that the IRS is “aggressively focused on helping taxpayers” get their returns “right the first time, sparing them [a] back and forth with the agency that no one wants.” He said that before the additional funding from the 2022 inflation bill, the IRS was in a “dire situation” spurred by a “decade of budget cuts.”
During that time, Taxpayer Assistance Centers (TACs) were either shut down or understaffed, leading to “record low levels of service” underscored by paltry call center phone response rates and staggering paper return backlogs.
“Today we are putting [Inflation Reduction Act] resources to work to reverse all of these trends,” said Werfel. “And we are particularly proud of the work we’re doing with IRA resources to reach taxpayers in underserved and rural communities.”
Among new announcements made during the call was a “special series of events” called Community Assistance Visits, which will function as temporary TACs in select areas of the country with underserved communities of considerable distance from the nearest permanent TAC location. The first Community Assistance Visit was held in Paris, Texas, “more than 90 miles from the closest IRS office,” according to Werfel.
Seven other locations have already been picked for future visits: Alpena, Michigan; Hastings, Nebraska; Twin Falls, Idaho; Juneau, Alaska; Lihue, Hawaii; Baker City, Oregon; and Gallup, New Mexico. Werfel also said that since the enactment of the inflation bill, the IRS has opened 35 permanent TACs since last August, nine of which were established in the past three months. He said the IRS’ goal is “meeting taxpayers where they are.”
For more, see the IRS accompanying release published the following morning. (IR 2023-127)
As indicated in the IRS’ Strategic Operating Plan for how the agency intends to spend the $80 billion from the Inflation Reduction Act (though this total may be reduced to as low as $60 billion given reported negotiations between Biden and congressional Republicans during the latest debt ceiling talks), changes are coming to customer-facing online taxpayer portals.
“In the next five years, taxpayers will be able to securely file all documents and respond to all notices online, as well as securely access and download their data and account history,” said Werfel. “This will simplify and streamline the tax process for millions of taxpayers.”
By the end of fiscal 2023, taxpayers will be able to validate bank accounts in their online individual IRS accounts. Secure messaging, live chat, and a virtual assistant are other features coming to individual accounts.
For professional accounts, also by the end of fiscal 2023 the IRS is implementing account authorization management and payment viewing. Live chat and two-way messaging is coming sometime in fiscal 2024. Finally, “the IRS is launching the business online account and enabling businesses to view outstanding balances, make payments online, and conduct a business tax check,” Werfel said. “Business Online Account will initially be available for sole proprietors by the end of fiscal year 2023.”
Other projects are in the works for next tax filing season, including “homepage updates, filing fees and content updates, and more intuitive global site navigation,” according to Werfel. Further, in tax season 2024, third-party transmitters and software developers will be able to bulk transmit “hundreds of thousands” of Forms 1099 to the IRS Information Return Intake System, or IRIS, which was first rolled out this January.
“This is an important milestone to note because it shows how quickly the IRS can build on its new technology products,” Werfel proclaimed.
After Tax Day this April, Werfel expressed his satisfaction with how digital improvements made possible using Inflation Reduction Act fundings already made the taxpayer experience better during the filing season. National Taxpayer Advocate Erin Collins also applauded the IRS’ performance compared to recent years.
More details with highlights from this past filing season were provided in a separate release July 14. (IR 2023-126)
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