In a recent update, the IRS announced significant advancements in taxpayer services and online tools, made possible by funding from the Inflation Reduction Act (IRA). This initiative aims to enhance the overall efficiency and accessibility of IRS services, marking a pivotal shift towards more modern and user-friendly tax administration. Optima Tax Relief reviews the new features, key milestones, and digital products. 

New Features 

The IRS is enhancing its online services to provide taxpayers with functionality similar to that of their bank or other financial institutions. Some of the key new features include the following.  

  • Individual Online Account Enhancements: Taxpayers can now access comprehensive tax information, update Identity Protection PINs via mobile devices, check audit statuses, calculate lien payoffs, complete installment agreements, and track tax refund statuses all in one place. 
  • Business Tax Account Upgrades: The Business Tax Account is now available in Spanish. Business taxpayers can view and pay their balance due in one location, and sole proprietors can download business entity transcripts. 
  • Electronic Filing and Payments: New business forms, including Spanish versions, can now be filed electronically, improving accuracy and reducing errors. IRS employees can access these returns electronically for better customer service. 
  • Document Upload Tool Milestone: The Document Upload Tool has processed over one million taxpayer submissions, allowing digital responses to IRS notices through secure online uploads. 
  • Mobile-Adaptive Forms: Thirty forms are now mobile-friendly, enabling taxpayers to fill out and submit forms via smartphones and tablets. This initiative helps reduce paper use and processing delays. 
  • Notice Redesign: The IRS has redesigned 100 of the most common notices to simplify and improve communication with taxpayers, preparing for the 2025 filing season. 

Key Milestones 

There are several key milestones that the IRS has highlighted. For example, more than 72,000 mobile-friendly forms have been submitted since September 2023. Offering common IRS forms in a new electronic format provides taxpayers with a secure and efficient way to interact with the agency. This shift supports the paperless processing initiative by reducing the need for physical mail and paperwork. Taxpayer Assistance Centers have seen a 37% increase in face-to-face visits while the IRS has seen a 9.1% increase in volunteer-prepared tax returns.  

Digital Products 

The IRS continues to undergo significant modernization efforts to enhance its operations and services: 

  • Digitalization: The IRS is advancing its digital capabilities by scanning and electronically filing paper returns, replacing outdated scanning equipment, and installing automated mail-sorter machines. This has already led to the scanning of over 2 million documents, moving towards a fully digital workflow. 
  • Online Account Payment Plans: New data services improve the Individual Online Account experience, allowing tax professionals to manage and create payment plans for individual taxpayers. 
  • HR System Upgrades: The IRS is modernizing its outdated human resources IT systems with IRA funding. This project aims to streamline HR processes, improve employee experience, and boost productivity. 
  • Network Bandwidth Expansion: The IRS has doubled network bandwidth at many sites to support increased workforce demand and enhance taxpayer services, with a goal to complete this expansion before the 2025 filing season. 

These initiatives are designed to increase efficiency, improve service delivery, and support both IRS employees and taxpayers. 

Plans for the 2025 Filing Season 

As the IRS prepares for the 2025 filing season, several key initiatives will accelerate due to the Inflation Reduction Act: 

  • Enhanced Live Assistance: The IRS will improve efficiency in call centers, reduce paper use, expand staffing at Taxpayer Assistance Centers, and increase awareness of available credits and benefits. 
  • Expanded Online Services: Features in Online Account will grow, including digital copies of notices, status updates, secure messaging, and more payment options. 
  • Accelerated Digitalization: New non-tax forms will be introduced in mobile-friendly formats, and the IRS will scan nearly all paper-filed tax returns at entry points. 
  • Increased Taxpayer Information: Efforts will be made to provide more information on tax credits, benefits, and to raise awareness about emerging tax scams. 

Further details on these improvements will be shared later this fall. Overall, the enhancements made possible by the Inflation Reduction Act funding are set to provide a more efficient, secure, and user-friendly experience for taxpayers. The IRS's commitment to modernizing its services reflects a broader effort to adapt to the evolving needs of taxpayers and improve the overall effectiveness of the tax administration system.