IRS Launches Paperless Processing Initiative

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Paperless Processing Becomes the Rallying Cry at IRS

The Internal Revenue Service hopes to process all the tax correspondence, notice responses and nontax forms it receives digitally (electronically) in the next two years. To do so, they have launched the “paperless processing initiative.” Now, taxpayers will have the option to go paperless for IRS correspondence by the 2024 filing season. The goal is to achieve paperless processing for all tax returns by filing season 2025.

Why the Paperless Processing Push?

Currently, taxpayers can’t digitally submit many types of forms and pieces of correspondence beyond their annual 1040 tax return. The IRS is unable to digitally process the paper tax returns it receives. By next tax season, taxpayers will be able to digitally submit all of their correspondence, nontax forms and responses to notices. The IRS is estimating that over 94% of individual taxpayers will no longer need to send mail to the agency. Up to 125 million paper documents will be submitted digitally per year. However, taxpayers who wish to submit paper returns and correspondence can continue to do so.

Taxpayers will also be able to e-file 20 additional tax forms by the 2024 filing season. This allows up to 4 million more tax documents to be filed digitally every year. That includes amendments to Forms 940, 941, 941-SS and 941 (PR), some of the most common forms taxpayers file when amending their tax returns. At least 20 of the most used nontax forms will be available in digital, mobile friendly formats. Taxpayers will be able to complete and submit them online. This will include a Request for Taxpayer Advocate Service Assistance when they need help from that office.

The Future of Paperless Processing

By filing season 2025, another 150 of the most used non-tax forms will be available in digital, mobile friendly formats for taxpayers to submit with their cell phones. The IRS predicts that by filing season 2026 all paper documents will be processed digitally. Additionally, up to 1 billion historical documents will be digitized. This gives taxpayers access to their data and saves the agency an estimated $40 million in storage costs each year.

The IRS receives approximately 76 million paper tax returns and forms and 125 million pieces of correspondence, notice responses and nontax forms every year. They have limited capacity to accept forms digitally or digitize all the paper it receives has kept it from delivering the kind of service that taxpayers expect.

The 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 parts of the IRS to rely on these digital copies to provide faster refunds, reduce errors in tax processing, and deliver a more seamless and responsive customer service experience, and much more.