What to Expect from the IRS Paperless Processing Initiative

Aug 8, 2023 | Blog

Virtually any San Jose tax lawyer knows the Internal Revenue Service has announced plans to provide digital correspondence for next year’s tax season. Over the last decade, the IRS has been attempting to improve their overall service, and this most recent goal of “paperless processing” is one of the many steps along the way.

Paperless Processing on the Horizon

The IRS claims they are on target for full, paperless processing by 2025, for both tax returns and information returns, the latter of which are utilized by financial institutions and employers. They have stated that they believe this new way of processing filers’ returns will eliminate approximately 200 million sheets of paper each year.

Processing Times Predicted to Decrease Substantially

According to tax lawyers in San Jose, the IRS currently receives a significant number of paper tax returns each year, estimating that approximately 76 million returns are filed manually on an annual basis. In addition, responses to forms and notices result in about 125 million extra pieces of correspondence each year on top of the actual tax returns. The agency has stated that this has contributed significantly to backlogs and delays, and that switching to paperless processing will speed the rate at which refunds are received by several weeks. ON WEDNESDAY, the US Department of the Treasury announced that they believe the new system will cut down processing times by 50 percent.

The Key to All-Around Improvement

On Wednesday, Treasury Secretary Janet Yellen stated that paperless processing will almost certainly lead to vast improvements in other areas, essentially saying that this is the key to an overall improvement in customer service. Yellen stated that taxpayers will be able to save time and money by securely accessing their data and being able to review their documents whenever they choose.

The CEO of Intuit also indicated that the upcoming changes are a good thing, stating that they will reduce tax processing errors, expedite refunds, and deliver a more responsive and seamless customer service experience overall.