KEY POINTS

  • The IRS has unveiled plans to offer digital correspondence for the 2024 season and aims to offer “paperless processing” for tax returns in 2025.
  • It’s expected the plan will eliminate up to 200 million pieces of paper every year, slash processing times by half and speed up refunds by several weeks.
  • “This is truly a game-changer for the IRS,” said Eric Hylton, national director of compliance for alliant.

The IRS has unveiled plans to offer digital correspondence for the 2024 tax season, building on the agency’s decade-long overhaul of improved service, technology and compliance.

By 2025, the agency aims to achieve “paperless processing” for tax returns and so-called information returns, used by employers and financial institutions.

The IRS expects to eliminate up to 200 million pieces of paper every year, slash processing times by half and speed up refunds by several weeks, the U.S. Department of the Treasury announced on Wednesday.

The IRS currently receives 76 million paper tax returns and forms every year, along with 125 million pieces of correspondence, responses to notices and other forms, which have delayed service and added to backlogs. The agency also spends about $40 million every year to store 1 billion “historical documents.”

“This paperless processing initiative is the key that unlocks other customer service improvements,” Treasury Secretary Janet Yellen said in a speech on Wednesday. “It will enable taxpayers to see their documents, securely access their data and save time and money.”

She said these changes will expedite refunds, reduce tax processing errors and deliver “a more seamless and responsive customer service experience.”

While taxpayers will still have the option to send paper returns in 2025, the agency is committing to digitally process 100% of tax and information paper filings, as well as half of paper correspondence, non-tax forms and responses to notices, Yellen said.