Stay informed on the latest tax news and developments, including legislation and rule changes, for effective tax planning and compliance.
Tax professionals and taxpayers can rejoice as the IRS reports major service improvements
In 2023, the IRS highlighted significant improvements in its services, attributing them to the Inflation Reduction Act. Among these enhancements:
- Paperless Processing Initiative: The IRS can now scan 225 times more forms than in 2022, allowing tax professionals and taxpayers to respond to 51 additional forms and letters online.
- Customer Service: A callback option for high call volumes is available to up to 95% of callers seeking live assistance.
- Filing Season 2023 Performance: An 87% service level was achieved on their main help line. They answered 3 million more phone calls, reduced wait times from 28 minutes to three minutes, served an additional 140,000 taxpayers in-person, digitized 80 times more returns, cleared the 2022 tax return backlog with no errors, and introduced two new digital tools.
- Paperless Vision: By 2025, the IRS plans to digitize all paper-filed returns upon receipt.
- Software Solutions: IRS launched online tools allowing responses to certain notices and filing form 1099 electronically.
- Voice and Chatbots: Available 24-7, these tools have handled over 1.6 million messages and provided information to 13 million taxpayers.
- In-person Services: The IRS hired 700 employees, opened 42 Taxpayer Assistance Centers, and introduced Pop-Up centers for hard-to-reach areas.
- Enforcement: The IRS is focusing on ensuring that high-income taxpayers pay their taxes. Recent enforcement activities have led to numerous convictions for tax evasion and recovered $38 million from delinquent millionaire taxpayers.
- The IRS continues to utilize Inflation Reduction Act funds to improve tax processes and services, with more updates expected for the 2024 tax season.
Uncertain whereabouts of millions of tax data, according to TIGTA's IRS criticism
The Treasury Inspector General for Tax Administration (TIGTA) reported that the IRS is unsure of the whereabouts of millions of tax records, potentially facilitating tax refund fraud identity theft. Around 8,500 microfilm cartridges meant to be transferred from Fresno to Kansas City are missing. Additionally, 168 cartridges from Ogden, Utah, are unaccounted for. Each cartridge can store up to 2,000 images. TIGTA highlighted significant shortcomings in IRS's management of these cartridges. Kenneth Corbin of the IRS cited funding cuts and staff reduction as challenges. The IRS concurred with 11 out of 13 of TIGTA's improvement recommendations. This criticism follows the IRS's recent announcement of plans to digitize all paper-filed returns by 2025.
Exemptions and waivers electronic filing guidelines supplied
The IRS, in Notice 2023-60, provided guidance on requesting religious and hardship waivers, along with other administrative exemptions, from electronic filing requirements introduced in the final regulations (T.D. 9972) from February. These regulations, stemming from the Taxpayer First Act, mandate electronic filing for various returns, effective for tax years ending on/after Dec. 31, 2023. Filers with religious conflicts can file Form 8508 for an exemption, after which they can proceed with paper filings. Additionally, the IRS commissioner has authority to grant hardship waivers and other exemptions. Notice 2023-60 replaces Notice 2010-13 and associated waiver request procedures as they're now redundant.
