IRS Vows To Digitize All Taxpayer Documents By 2025 (arstechnica.com) 59
An anonymous reader writes: Today, the US Treasury Department announced that taxpayers will have the choice to go paperless for all Internal Revenue Service (IRS) correspondence in the upcoming 2024 filing season. By 2025, the IRS plans to achieve paperless processing for all tax returns, still accepting paper documents but immediately digitizing them, to "cut processing times in half" and "expedite refunds by several weeks," the Treasury Department said. "The IRS receives about 76 million paper tax returns and forms and 125 million pieces of correspondence, notice responses, and non-tax forms each year, and its limited capability to accept these forms digitally or digitize paper it receives has prevented the IRS from delivering the world-class service taxpayers deserve," the Treasury Department said.
By accelerating paperless processing, the IRS expects to simplify how Americans access their taxpayer data and save millions historically spent on storing more than a billion documents. Digitization can also help eliminate errors, the Treasury Department said, which can "result from manually inputting data from paper returns." And it will help taxpayers more quickly get answers to questions, as IRS customer service employees "do not currently have easy access to the information from paper returns." Starting in 2024, they will. Next filing season, taxpayers will have the option to e-file 20 additional tax forms among the most commonly submitted when amending returns, including forms used to submit information on things like identity theft or proof of eligibility for "key credits and deductions that help low-income households."
"Taxpayers who want to submit paper returns and correspondence can continue to do so," the Treasury Department said, but "all paper will be converted into digital form as soon as it arrives at the IRS." In 2024, the IRS estimates that "more than 94 percent of individual taxpayers will no longer ever need to send mail to the IRS." Once taxpayers arrive at the 2025 filing season, they'll have the option to e-file "an additional 150 of the most used non-tax forms," the Treasury Department said, which "will be available in digital, mobile-friendly formats that make them easy for taxpayers to complete and submit." The IRS prioritized mobile-friendly formats because the agency estimates that "15 percent of Americans rely solely on mobile phones for their Internet access." "When combined with an improved data platform, digitization and data extraction will enable data scientists to implement advanced analytics and pattern recognition methods to pursue cases that can help address the tax gap, including wealthy individuals and large corporations using complex structures to evade taxes they owe," the Treasury Department added.
By accelerating paperless processing, the IRS expects to simplify how Americans access their taxpayer data and save millions historically spent on storing more than a billion documents. Digitization can also help eliminate errors, the Treasury Department said, which can "result from manually inputting data from paper returns." And it will help taxpayers more quickly get answers to questions, as IRS customer service employees "do not currently have easy access to the information from paper returns." Starting in 2024, they will. Next filing season, taxpayers will have the option to e-file 20 additional tax forms among the most commonly submitted when amending returns, including forms used to submit information on things like identity theft or proof of eligibility for "key credits and deductions that help low-income households."
"Taxpayers who want to submit paper returns and correspondence can continue to do so," the Treasury Department said, but "all paper will be converted into digital form as soon as it arrives at the IRS." In 2024, the IRS estimates that "more than 94 percent of individual taxpayers will no longer ever need to send mail to the IRS." Once taxpayers arrive at the 2025 filing season, they'll have the option to e-file "an additional 150 of the most used non-tax forms," the Treasury Department said, which "will be available in digital, mobile-friendly formats that make them easy for taxpayers to complete and submit." The IRS prioritized mobile-friendly formats because the agency estimates that "15 percent of Americans rely solely on mobile phones for their Internet access." "When combined with an improved data platform, digitization and data extraction will enable data scientists to implement advanced analytics and pattern recognition methods to pursue cases that can help address the tax gap, including wealthy individuals and large corporations using complex structures to evade taxes they owe," the Treasury Department added.
wow (Score:2)
They are going to catch up to where all DHHS departments in California have been for a decade, wow
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Most people would rather pay an additional $20 a month and receive a "surprise" refund than to hold onto their money for 12 months and find they need to pay a $240 tax bill because they "had use" of their own money.
It only takes one year of "Oh, shit. I didn't plan for a $250 bill so soon after Christmas!" to convince people to raise their W-4 withholding a little higher.
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Slashdot moderators: please share this thief's actual email with the IRS.
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Slashdot moderators: please share this thief's actual email with the IRS.
Actually, not everyone HAS to file. If the person is under 65 and makes less than $12,950 gross earnings, they don't have to file.
A 20-something living in his parent's basement playing Fortnite all evening might not need to file.
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A $250 bill is nothing. Because my former tax people did not tell me the proper way to file medical expenses, the IRS has been sitting on an amendment for nearly two years now -- withholding my 2022 return against the balance I don't actually owe.
All filed electronically.
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If the IRS is holding your refund, it might be some information is missing or incorrect. The IRS has contact information to help clear up the problem.
If you haven't already, you can contact the Taxpayer Advocate Service at 877-777-4778. Additional information is on their website.
https://www.taxpayeradvocate.irs.gov/get-help/refunds/held-or-stopped-refunds/ [irs.gov]
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Fair enough, but please read what I wrote. They're withholding it because the prior year did not account for medical expenses the way they want, so they retroactively decided that I owed $26k. My new tax guy put in an amendment to clear that up, but they have not bothered to process that, so when the 2022 return went in, they still believed that I owed $26k so they kept the entire 2022 return. THERE IS NO MISSING OR INCORRECT INFORMATION.
I'm skeptical that I could get a human at the above number. IRS cu
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Filing taxes electronically has been the thing in Sweden for several years now.
No special software needed, just go to the web page and log in and file. If you haven't had anything special to file all you need to do is to review what the tax authority has and sign it electronically. The employers and banks are required to file your data so you don't even have to enter any numbers unless you have something extra somewhere.
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Filing taxes electronically has been the thing in Sweden for several years now.
Also, in the UK, except if you fall into a class of people who could benefit more from electronic filing: non-residents.
Re:wow (Score:4, Insightful)
I've filed electronically here in the US for probably 20 years now. But it's always been more complicated than it needs to be - largely because our taxes are more complicated than they need to be.
Problem is, no one will ever put forward a somewhat neutral tax simplification plan. Whether it's coming from the left or from the right, their agenda is always interwoven with the "simplification" - which makes any meaningful change DOA in Congress.
They can't even get a free filing thing going (Score:4)
thanks to the tax prep mafia. Now this?
"When combined with an improved data platform, digitization and data extraction will enable data scientists to implement advanced analytics and pattern recognition methods to pursue cases that can help address the tax gap, including wealthy individuals and large corporations using complex structures to evade taxes they owe," the Treasury Department added.
Lol. Don't hold your breath.
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Re:They can't even get a free filing thing going (Score:4)
The UK experience hasn't been peachy either. We're a good deal ahead of you guys, but there are so many problems...
A few years back, HMRC (UK equiv. of the IRS) started a "making tax digital" programme. In fairness to them, they've got some bits of it working quite well - you can absolutely file your taxes online, and you don't need an accountant (so long as you've got thick skin and a brain the size of a planet to understand all the tax code details).
However... there are umpteen problems. They all stem from "garbage in, garbage out" of course, and the fact that receiving your tax return is one part of the whole. There are lots of parts, and they don't play with each other AT ALL. As such, unless you've got a very simple tax situation, you'll fall between several internal systems, and the interactions between them are all prone to mistakes - that you'll have a hard time proving, at least not in anything like a sane time.
HMRC also don't do email - they'll email to tell you to log on to their impenetrable online service to read a letter, or they'll snail mail post the letter to you (about 3-4 weeks after the event that triggers them wanting to talk to you). You can't email them back, so you have to snail mail back to them. They've got such a monstrous backlog of post that in some cases they're a year behind (yes, a year!).
Because of that backlog, and because "well, everyone can file their taxes digitally!", they've decided to close their phone helpline for a few months to focus on their postal backlog. I mean you couldn't make this stuff up - you want a quick answer to something, but now you have to write in - to add to the backlog they're trying to clear. Either that or use an online chatbot (good luck!).
Back to the systems that don't talk to each other... There was a story a week or two ago about someone being told they owed millions in VAT. It turns out, the tax inspector had typed the persons VAT registration number into the "amount due" field on some system or other, so it sent a snot-o-gram email to the tax payer (and most likely triggered some late payment fees and interest charges). Now that tax payer has to contest all of it, then write in (yes, you have to write in - can't ask over the phone) to request the charges and interest be removed. They're probably facing months of work - all for an obvious and stupid mistake that should have been caught by the computer in the first place.
So... after all that... all that glitters is not gold. Don't expect much and you won't be disappointed.
It’s to be able to prosecute tax errors (Score:5, Interesting)
For years now, wealth management firms have advised clients to 1) File an Extension, always, electronically, and 2) always file a paper tax form in paper and mail it on the 3rd or 2nd last day of the extended deadline.
Why? Because the IRS never gets to the 2nd or 3rd last day of backlogs. Sometimes, they start from the end, so if you send on the last day, maybe they’ll get to it.
After three years, if they haven’t manually gotten to your tax form, typed it into their system, etc., then any accidental error you made ,well, it will be too late for them to do anything about it. And currently their backlog is like 5 years, so unless you show up on their radar and they go hunting in their warehouses, you’re probably in luck.
Digitizing everything on receipt, however, seems to counteract that, so lots and lots and lots of upper-income folks (NOT top 1%, more like Top 20%) and small to medium sized businesses that sent in their stuff by mail will be caught up in the dragnets.
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For years now, wealth management firms have advised clients to 1) File an Extension, always, electronically, and 2) always file a paper tax form in paper and mail it on the 3rd or 2nd last day of the extended deadline. ...Why? Because the IRS never gets to the 2nd or 3rd last day of backlogs. Sometimes, they start from the end, so if you send on the last day, maybe they’ll get to it.
Noting that even if you apply for/get and extension you must still estimate and pay any taxes owed by the regular filing deadline to avoid penalties. From Extension of Time To File Your Tax Return [irs.gov]:
-- An extension of time to file your return does not grant you any extension of time to pay your taxes.
-- You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties.
what are you talking about? (Score:1)
They absolutely get to tax forms eventually. During the lockdowns when they didn't have people actually processing returns the backlog got to absolutely insane levels (it took a better part of a year to get my refund) but they finally worked through it all and now processing times are back to normal. Surely you don't think that these guys work their asses off for three months when the vast bulk of returns are filed and then sit around smoking for nine months waiting for the next avalanche of filings. Of cou
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The IRS "estimated" my taxes at about $30k over what was actually owed. That's nearly half of what I actually make.
You might want reconsider who is cheating whom.
And the only take away for advocating for an obvious trail was that I must be cheating.
Fuck you too.
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Your problem is not the IRS per se. The problem lies with Congress. They made the tax code into Swiss cheese. Then the doofus's in the Republican GQP have been stiffing the IRS on funds for years to protect their fat cat campaign contributors from audits. And to make matters worse, they've helped fund those same contributors with tax decreases thus screwing up the Fed. Budget. Now when when the budget finally gives the IRS a much needed boost, those same dolts are claiming they need to take it back because
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IRS incorrectly told me that I owed way more than I did in 2021. I immediately figured out there mistake and thought I would just call them up and resolve it in a few minutes on the phone. Wrong! The IRS wouldn't talk about my case except through USPS mail. I mailed them documents and an explanation of what they had gotten wrong and they mailed me back saying they hadn't heard from me and that I was going to owe additional fines. I called them and the person explained that they probably had gotten my l
Re:It’s to be able to prosecute tax errors (Score:4, Informative)
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Other countries have digital returns and any error simply results in them in sending you a corrected notice and a schedule for payment. It's when you hide or obfuscate your income and assets, that fines and prison-time applies.
Other governments have this crazy idea that helping you pay, puts money in the government's hands: Throwing you in prison costs them money.
And everybody will still need id.me? (Score:2)
Talk about a continuing giveaway... with no alternatives in sight, despite Congress telling the IRS to drop ID.me.
https://cyberscoop.com/irs-fac... [cyberscoop.com]
Can You... (Score:1)
Prefill the digital forms (Score:2)
In Norway, tax has been digitized for decades. The IRS equivalent sends you the digital tax statement, prefilled with what they know about income, assets, deductions, taxes paid, and tax estimates. You can then correct the amounts, and add more information (more complex deductions, income abroad).
For almost everyone, this just means "look through, verify, press submit, and digitally sign". Of the rest, most can just correct some amounts and add some extra digital forms.
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1. Norway is a small country. It is much easier to do these things on a smaller scale.
2. The United States government is stubborn to the point of insanity. We don't have institutions that are designed to serve the people. Instead our federal agencies and departments are monsters given unnatural life by the legislature and cursed to roam the Earth for an eternity.
I think in a normal country they'd just take the money out of the paycheck and send you year end summary of the taxes you paid. That'd cover a good
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> 1. Norway is a small country. It is much easier to do these things on a smaller scale.
I think Norway not having legalized political bribery, and Turbotax/intuit not being a Norwegian company is a bigger factor. All things considered.
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1. Norway is a small country. It is much easier to do these things on a smaller scale.
This is one of those lies that people love to spew every time someone points to a country doing things the right way and asks why we can't in the US. Economies of scale would say we should have an easier time implementing such a system. It's not the size of the country that causes us not to do so.
2. The United States government is stubborn to the point of insanity. We don't have institutions that are designed to serve the people. Instead our federal agencies and departments are monsters given unnatural life by the legislature and cursed to roam the Earth for an eternity.
Here's the real culprit. Add on that our government absolutely, 100%, works directly for the large corporations and owner class. The tax prep industry has convinced congress critters that they are vitally essential
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I meant #1 ironically. in that it's the stupid argument often used when someone says roughly "but in my country we do this". I had hoped my exaggerated argument #2 would have made the lack of seriousness in the first point obvious, but even moderators didn't get it. My bad.
But more seriously I feel there is a certain inertia within government agencies and among the American people. It seems that once something has been done a certain way for 10 or more years we have trouble steering away from it. This infle
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I meant #1 ironically. in that it's the stupid argument often used when someone says roughly "but in my country we do this". I had hoped my exaggerated argument #2 would have made the lack of seriousness in the first point obvious, but even moderators didn't get it. My bad.
But more seriously I feel there is a certain inertia within government agencies and among the American people. It seems that once something has been done a certain way for 10 or more years we have trouble steering away from it. This inflexibility puts us at a disadvantage culturally and political when compared to more agile nations.
I can't think of a single individual person who wouldn't like to see taxes handled better / more effectively / in a more modern way. The inertia in this case isn't the people. It's the fact that it's become profitable to a segment of the business world to keep things as they are. And if it's profitable enough to justify tossing lobbying money at it? It's not going to change.
I do wish our government still at least sort/kinda worked for the people instead of directly for big business. But we're at a point whe
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My cold, dead hands (Score:2)
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Statistically, I still think it would be safer to send a paper copy of my return via mail, since it's harder for a hacker to steal and retrieve info from thousands of such paper returns en masse.
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Prioritizing the 15% that rely solely on mobile? (Score:2)
reason for the paper (Score:2)
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What interest rate do they pay? Is it significantly more or less than you'd get selecting a good money market?
If it's more, then paper is good even when they are slow.
If it's less, then there's a window where getting your money back faster is worth more than the cost of a cheap efile to speed things along.
All this assumes that you aren't in any debt, obviously in such a case the highest debt interest rate would the rate to compare.
Of course, I'm assuming that the amount of refund is meaningful- if it's smal
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To answer myself, having just done a Google search, it appears to have been 6% then recently changed to 7%. That puts it above most short term opportunities and below most unsecured debts.
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last I checked, the same interest rate they charge, a change from a few years back that caused much howling from some parts.
it's better than you'll find for most consumer loans, but lower than a blue chip company will pay.
hawk
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I've finally been able to file electronically the last couple of years.
The problem was that not just the free, but even the paid versions, were incomplete.
In particular, I used flat rate depreciation when I bought a vehicle for primarily business use, rather than the accelerated (MACRS, etc.). Not only would the deductions be worth more in the coming years as my income rose, but I took one look at the "ifs" and recoiled.
If you take the acceleration, and your business usage in the future drops below 50%, yo
We don't even need an IRS... (Score:1)