National Taxpayer Advocate Erin M. Collins joined Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel in McLean, Virginia, to discuss modernizing IRS technology and the launch of a paperless processing initiative.
During the event the IRS Commissioner expressed his gratitude to the National Taxpayer Advocate, and the Taxpayer Advocate Service, for her leadership in pushing the IRS to utilize scanning technology to eliminate the challenges of paper tax return processing and improve taxpayer service.
“As the Taxpayer Advocate who is here today has noted, paper is the agency’s kryptonite,” said IRS Commissioner Danny Werfel. “We are slower and more prone to errors. To counter that, there are emerging technologies that will make it possible for us to convert the oceans of paper that arrive at our doors into a digital format before it ever leaves our mailroom. Specifically, it is now our goal that by the 2025 filing season, the IRS will achieve paperless processing, which means digitizing all paper file returns as soon as they are received.”
Additionally, Secretary Yellen announced that Inflation Act Reduction (IRA) funding has made it possible for the IRS to offer taxpayers the option to go paperless for IRS correspondence, nontax forms, and notice responses to the IRS by the next filing season (2024).
“Thanks to the IRA, we are in the process of transforming the IRS into a digital first agency,” said Secretary Yellen. “This paperless processing initiative is the key that unlocks other customer service improvements. It will enable taxpayers to see their documents, securely access their data, and save time and money. And it will allow other the parts of the IRS to rely on these digital copies to provide faster reduce errors in text processing and deliver a more seamless and responsive customer service experience, and much more.”
The National Taxpayer Advocate issued a Taxpayer Advocate Directive in March 2022, directing the IRS to implement scanning technology for the 2023 filing season, and she has advocated for machine reading paper tax returns in her Reports to Congress. In her most recent Annual Report to Congress, deploying scanning technology was one of her on her list of priority recommendations to improve the taxpayer experience over the long term.
In her the report Collins wrote, “The IRS must automate paper processing to increase efficiencies and move toward a paperless work environment, not only to assist taxpayers but for its own benefit.”
In response to the launch of the paperless processing initiative Collins said, “I am encouraged by the commitment of the IRS and the Treasury Department to bring our tax system into the 21st century. Expanding the use of scanning technology will be a game changer for the IRS and improve how the IRS serves our taxpayers.”
For more updates about the IRS’s modernization efforts and to hear from Secretary Yellen and Commissioner Werfel’s remarks, please take a look at the following video from C-SPAN: https://www.c-span.org/video/?529702-1/irs-commissioner-treasury-sec-discuss-modernizing-irs. You can also read more in the official press release from the Treasury Department.