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IRS Discloses Plan to Simplify Notices to Millions of Taxpayers Ahead of Filing Season

Mar 13, 2024 | Blog

IRS Discloses Plan to Simplify Notices to Millions of Taxpayers Ahead of Filing Season

The launch of tax season is merely days away, and almost every tax professional and tax attorney in San Jose is aware of the Internal Revenue Service’s plans to unveil newer and more simplified versions of certain notices that millions of taxpayers receive annually. Previously more complicated, the new, easier to understand correspondence is a sample of the agency’s efforts to modernize its various functions.

Multibillion-Dollar IRS Overhaul

Bay Area tax attorneys have learned that the less complicated versions of these notices are part of the IRS’s multibillion-dollar overhaul that began last year when the agency reviewed and redesigned hundreds of form letters. These included notices about filing errors, delinquent taxes, amounts owed, unfiled returns, and other notices concerning a broad range of issues that the average filer may face during any tax season. 

Broad Range Goals Aimed at Quicker Issue Resolution

The long-term goals of the IRS’s modernization of its functions, as well as its paper correspondence, is to make it easier for taxpayers to resolve issues in a timely, uncomplicated manner. It is believed that making these processes simpler, including making paperwork easier to understand, will lead to an increase in compliance among various blocks of taxpayers.

Treasury Secretary Answers Questions During Press Call

Janet Yellen, IRS Treasury Secretary, answered questions during a press call on Tuesday, and indicated that taxpayers should notice an immediate difference upon logging into their online accounts or opening their traditional mail. Yellen stated that the newly redesigned notices will be easier to understand, clearer, and even shorter in length.

Program to Cover Approximately 170-Million Notices

The program is referred to by the IRS as the “Simple Notice Initiative,” and, according to the agency, it will eventually cover approximately 170-million notices received each year by United States taxpayers.

In advance of the 2024 tax filing season, the IRS has already redesigned over 30 notices. It reported that during the 2022 calendar year, roughly 20 million revised notices were sent. However, the aim is to redesign, review, and deploy new notices for almost all IRS letters sent to taxpayers by the year 2025, and it is confident that this goal is within reach. However, based on the letters reviewed by our tax pros so far this season, these notices do not seem any less ominous or intimidating.  The simplified correspondence, tells the taxpayer that they owe money , and may face tax levies or other problems in much simpler language.  It actually makes it easier to understand the a person is in over their head, and should call for tax help.

Program Part of IRS Paperless Processing Initiative

The simplified notices initiative is another layer built on the IRS’s paperless processing initiative that was announced last year in the month of August. This new initiative makes it possible for filers to respond to IRS notices via the Internet. Yellen stated that the second step was the creation of the aforementioned simplified notices.  

During a press call on Tuesday, IRS Commissioner Danny Werfel indicated that IRS notices need to be worded using “plain language” so that taxpayers can better grasp what’s being communicated. He stated that this will help taxpayers understand the message of the notice without necessarily having to seek the advice of an IRS tax attorney. Werfel stated that the simplified forms are expected to reduce in-person visits, phone calls, and taxpayer stress, and ultimately free up IRS staff to assist other taxpayers. 

The National Taxpayer Advocate’s yearly report was released this past January after being submitted to Congress, and it indicated that taxpayer services have been dramatically improved since 2020. The clearer notices are expected to continue this trend and improve compliance, ultimately bringing in uncollected tax revenue by assisting taxpayers to achieve better understanding concerning how much they owe. Anyone facing issues or problems with tax returns should contact an attorney for the California Franchise Tax Board or a back-taxes attorney at their earliest convenience.