Modernizing the IRS
In August of 2022, Congress passed and President Joe Biden signed the Inflation Reduction Act, which invested $80 billion in the IRS over the next ten years.
Since then, the IRS has leveraged the new investment to deliver benefits, improve customer service, increase efficiencies in the processing of tax returns, digitalize documents, and go after wealthy tax cheats.
Building a 21st century IRS
The new funding has empowered the IRS to digitalize tax forms more quickly, reducing headaches for taxpayers and IRS staff who will no longer have to communicate through snail mail. The IRS estimates that over 94 percent of individual taxpayers will never have to mail any paper again.
- Paperless tax filing
Starting next year, most taxpayers will be able to file their taxes completely paperless as the agency prepares to roll out full paperless processing by the 2025 tax season, saving 200 million sheets of paper annually and cutting tax processing times in half.
- Digitalized credit notices
Taxpayers can now respond online to ten of the most common credit notices like the Earned Income and Health Insurance Tax Credits, rather than through mail.
- Digitalized Form 1099 for small businesses
Millions of small business owners can save time and money because they can now file Form 1099 series information online rather than through mail.
- Mobile-friendly forms
Taxpayers can now submit mobile-friendly forms, ensuring that taxpaying services are more accessible for the estimated 15% of Americans who rely solely on mobile phones for their Internet access.
In July, the IRS collected $38 million in delinquent taxes from more than 175 high-income taxpayers. One individual sought to use the money owed to the government to buy a Maserati and a Bentley.
The agency is increasing its enforcement and audit efforts since receiving new funding from the Inflation Reduction Act.
According to the Treasury Department, the gap between taxes owed and taxes received amounted to $584 billion in 2019 or an estimated $7 trillion over the next decade. Twenty-eight percent of the gap is attributed to the top 1 percent of taxpayers who get away with not paying $163 billion in owed taxes each year or $1.63 trillion over ten years.