In a recent update, the IRS highlighted significant improvements in customer service, including reaching a milestone of 1 million submissions through its online Document Upload Tool. Despite these advancements, officials acknowledge there is still substantial work to be done, particularly in reducing the lengthy wait times for resolving taxpayer identity theft cases.
During a quarterly briefing, IRS Commissioner Danny Werfel and Laurel Blatchford, the Treasury’s chief implementation officer for the Inflation Reduction Act, shared insights into the ongoing transformation of the IRS funded by the 2022 legislation and detailed the agency’s strategic operating plan.
The Inflation Reduction Act of 2022 initially allocated $80 billion to the IRS over a decade, but this was later reduced by $20.2 billion under the Further Consolidated Appropriations Act of 2024, passed by Congress in March. Additionally, the IRS received a base budget of $12.3 billion for fiscal year 2024, matching the previous year’s allocation.
“We are actively addressing issues that have long plagued the IRS and caused frustration for both taxpayers and the tax community,” Werfel stated. “Although there is still a considerable journey ahead, our progress is undeniable.”
Online Document Upload Tool
Introduced in a limited capacity in 2021 and expanded in 2023, the IRS’s Document Upload Tool allows taxpayers and tax professionals to respond to IRS notices digitally via phone or computer. This tool has seen widespread adoption, underscoring its value.
“The high volume of uploads demonstrates that taxpayers and tax professionals are embracing this digital option,” Blatchford commented. “This marks a significant step forward.”
Persistent Issues
However, the IRS continues to face challenges, particularly in assisting victims of identity theft. Werfel emphasized the importance of reducing the nearly two-year wait time to resolve these cases.
National Taxpayer Advocate Erin Collins highlighted in her midyear report to Congress that as of April, the IRS took over 22 months to resolve cases in its identity theft victim assistance unit, which had approximately 500,000 unresolved cases. She described the delay as “unacceptable.”
“The current wait time to rectify tax records is excessive,” Werfel acknowledged. “While the process is complex, it is crucial that we shorten this timeframe. Accountability for this improvement lies with both myself and my team.”
Enhancements in Online Services
The IRS also announced several upgrades to its online services, aimed at improving the user experience:
- Individual Online Accounts: Taxpayers can now access a comprehensive overview of their tax-related information from a single source, including the status of pending tax refunds.
- Business Tax Account Improvements: Available in Spanish, this service allows business taxpayers to view their balance due and make payments conveniently in one place.
- Increased Electronic Filing Options: More forms, including both Spanish and English versions of Forms 941 and 943, and English versions of Forms 940 and 945, can now be filed electronically.
- Mobile Form Submissions: Since the September 2023 launch, taxpayers have submitted over 72,000 forms via mobile devices.
- Redesigned Notices: To prepare for the 2025 filing season, the IRS has redesigned 100 of the most common notices sent to individual taxpayers, which constitute about 90% of the total notice volume. In 2022 alone, approximately 150 million such notices were issued.
Moreover, the IRS is focused on enhancing internal operations, such as updating outdated human resource information technology systems, to better support these service improvements.