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IRS’ latest moves enable more digital taxpayer interactions

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I was not an early smartphone adopter. Now I’m addicted to mine. Ditto my tablet.

But it’s not all fun and games.

I now deal with most of my day-to-day life — banking, grocery shopping, paying bills — via apps that make those tasks and transactions easier. The few that don’t (yet) have mobile apps are accessible via my laptop.

I may have been late, but I’m definitely not alone in living electronically. We’re why the Internal Revenue Service is working to improve its digital offerings.

Moving IRS into modern mainstream: IRS Commissioner Danny Werfel has said, many times, that taxpayers deserve the same functionality in their online tax interactions that they experience with their bank or other financial institutions.

You’ll find that pledge repeated in other IRS communications.

It’s also in the agency’s Strategic Operating Plan, where the goal is to transform operations so that taxpayers eventually will be able to meet their tax responsibilities, including interactions with the IRS, in a digital manner if they prefer.

The IRS recently moved forward in some of those areas, including online tax accounts for both individuals and businesses. Last week, it announced that Inflation Reduction Act funds have helped the agency add new features in both those areas.

Individual tax account upgrades: The IRS says that as part of its digital vision, taxpayers will be able to securely file all documents and respond to all notices online as well as securely access and download their data and account history.

To make that possible, the agency said it has added several new features to individual online taxpayer accounts. These updates give taxpayers the ability to —

  • Retrieve all their tax related information from one source, including Wage & Income Account, Record of Account and Return transcripts;
  • Request an update to their Identity Protection (IP) PIN using their smartphones or tablets;
  • View information about the status of their audit at their convenience, instead of having to call the IRS to obtain audit information;
  • Use a Lien Payoff Calculator to access lien information, calculate their lien payoff amount and generate a letter for download/print;
  • Complete the Pending Installment Agreement process within Online Account without having to be re-routed to a separate application and
  • View a comprehensive overview of their account information, including the status of their tax refund as it’s being processed.

Business account improvements, too: On the business tax side, taxpayers now can open a business tax account in Spanish.

In addition, eligible business taxpayers can see their balance due and make the payment all in one place. Previously, the balance due had to be viewed in a separate place from where the payment was made, adding another complicating step for businesses making payments.

Sole proprietors can now download business entity transcripts from their Business Tax Account. This transcript shows entity information like business name, address, location address and more for the Employer Identification Number on file.

More forms can be e-filed: Additional business Forms 940, 941, 943 and 945, including the Spanish version of Forms 941 and 943, can now be filed electronically.

Through this improved process, IRS employees can now access taxpayer return information electronically, allowing them to provide more complete and accurate answers to taxpayer questions.

In addition, the IRS can now accept related electronic payments while minimizing errors normally associated with processing paper returns.

But if you’re not quite there electronically, no worries. The IRS says taxpayers can still choose to submit a paper version if they prefer.

Use mobile-adaptive forms: IRS also has upped its mobile game. It now has 30 forms available for mobile use, allowing taxpayers to fill out common non-tax forms on cell phones and tablet devices and then submit them to the IRS digitally.

It’s a popular option. The IRS says taxpayers have submitted more than 72,000 mobile-friendly forms since the September 2023 launch.

Forms adapt to any screen size and ensure information is entered into all required data fields. This can help reduce errors, which can delay processing. In addition, taxpayers can access five of these forms that require signatures in their online taxpayer account, including —

  • Form 13533, VITA/TCE Partner Sponsor Agreement
  • Form 13533-A, FSA Remote Sponsor Agreement
  • Form 14039-B, Business Identity Theft Affidavit
  • Form 12508, Questionnaire for Non-Requesting Spouse
  • Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit

In addition to offering taxpayers a safe and fast way to electronically engage with the IRS, the filing of common forms in this new format also helps reduce mail and paper.

As you might recall, it was the backlog of mailed paper filings and notices during the COVID-19 pandemic that produces myriad problems for taxpayers and the IRS alike.

Modernizing old systems: In addition to improvements to customer technology, the IRS also is modernizing decades-old systems and equipment.

The agency says it continues to make significant progress scanning and electronically filing paper returns. The IRS has replaced scanning equipment that is older than five years, and installed automated mail-sorter machines in the six highest-volume IRS locations, streamlining the process of mail sorting, opening, and scanning.

As of the end of June, the IRS had scanned more than 2 million pieces of paper. Digitization has far-reaching implications for how the IRS can improve service and will enable the IRS to create completely digital workflows.

You also might find these posts on the IRS’ electronic progress of interest:

 

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