Wealth Summit 2023 - Full Day Live Event
Sun, Dec 10, 2023
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$40 to $75
In a significant move toward modernization, the IRS is transitioning to a paperless tax filing system, allowing taxpayers to file major forms online and receive their refunds more quickly. The initiative, backed by funding from the Inflation Reduction Act, is set to streamline the tax filing process and enhance efficiency.
The project was granted $80 billion from the Inflation Reduction Act, part of which could be subject to reduction due to a political agreement regarding the debt ceiling. The IRS had faced criticism during the pandemic for its sluggish processing of a substantial backlog of paper files, leading to delayed returns. However, operations are now returning to normal, paving the way for this transformative digital transition.
By the upcoming 2024 tax filing season, taxpayers will be able to submit letters, non-tax forms, and responses to the IRS digitally, excluding their actual tax returns. This transition aims to make 94% of taxpayers free from the need to send physical mail to the IRS. Additionally, around 20 of the most popular non-tax forms can be accessed and submitted through mobile devices.
The IRS will simultaneously pilot its new free tax prep software, offering taxpayers the option to digitally file their returns, similar to existing software like TurboTax. Looking ahead to the 2025 tax season, the IRS plans to process all returns digitally, expanding the range of forms that can be completed and submitted via mobile phones.
The agency anticipates that embracing a fully paperless approach will significantly cut processing times in half and considerably reduce the time required to receive tax refunds. Currently, the IRS manages most refunds within a few weeks, but the waiting period can be considerably longer for paper filers.
While the shift to paperless filing doesn't mandate taxpayers to submit their documents online, it introduces new scanning technology that digitizes paper forms quickly. This advanced scanning allows IRS agents to process forms more efficiently without manually inputting information into outdated systems, expediting the entire process.
Treasury Secretary Janet Yellen clarified that taxpayers will always have the option to submit documents by paper if they choose. However, for those seeking swift tax refunds, embracing digital filing is likely the optimal choice. As the IRS takes bold steps into the digital age, this initiative promises to revolutionize the tax filing experience, enhancing efficiency and reducing waiting times for taxpayers across the nation.