IRS adds W-2 and 1095-A docs to online accounts

The Internal Revenue Service made some enhancements to its Individual Online Accounts for taxpayers, adding W-2 and 1095-A information returns for 2023 and 2024, but reports are also circulating about cutbacks to the agency, with layoffs and closures of taxpayer assistance centers scheduled.

The first information returns to be added online for taxpayers are Form W-2, "Wage and Tax Statement," and Form 1095-A, "Health Insurance Marketplace Statement." The forms will be available for tax years 2023 and 2024 under the Records and Status tab in the taxpayer's Individual Online Account. 

In the months ahead, the IRS plans to add more information return documents to the Individual Online Account. 

Only information return documents issued in the taxpayer's name will be available in their account. The taxpayer's spouse needs to log into their own account to retrieve their information return documents. That's true whether they file a joint or separate return. State and local tax information, including state and local tax information on the Form W-2, won't be available on Individual Online Accounts. The IRS said filers should continue to keep the records mailed to them by the original reporter. 

The IRS had been adding more technology tools, including Business Tax Accounts and Tax Pro Accounts, in recent years thanks to the extra funding from the Inflation Reduction Act of 2022. However, layoffs of between 6,000 and 7,000 employees and hiring freezes at the agency in the midst of tax season threaten to stall such improvements, according to a group of former IRS commissioners. The Trump administration and the Elon Musk-led Department of Government Efficiency have reportedly made plans to shut down at least 113 of the IRS's in-person Taxpayer Assistance Centers around the country after tax season, according to the Washington Post, either terminating their leases or letting them expire. Recently departed IRS Commissioner Danny Werfel had been using the funds from the Inflation Reduction Act to expand the number of Taxpayer Assistance Centers, opening or reopening more than 50 of them for a total of 360 nationwide.

A group of Democrats on Congress's tax-writing committee criticized the move to close the centers.

"Ask any congressional district office and you'll hear about the challenges constituents face during filing season, which is why Democrats ushered in a once-in-a-generation investment in modernizing the IRS and delivering the customer service the people deserve," said House Ways and Means Committee ranking member Richard Neal, D-Massachusetts, Tax Subcommittee ranking member Mike Thompson, D-California, and Oversight Subcommittee ranking member Terri Sewell, D-Alabama, in a statement last week. "This administration is hellbent on destroying our progress. It wasn't enough for them to fire nearly 7,000 IRS employees in the middle of filing season, but now, they are skirting federal mandatory notice procedures and reportedly shuttering over 100 offices that offer taxpayer assistance — an absolute nightmare for taxpayers. As required by the Taxpayer First Act, a 90-day notice must be given to both the public and the Congress before closing any Taxpayer Assistance Centers. We need answers now. We are demanding the administration provide a list of the centers they plan to close — it's the least the 'most transparent administration' can do."

Lawmakers are also concerned about reports of immigration officials pushing the IRS to disclose the home addresses of 700,000 people suspected of living in the U.S. illegally. According to the Washington Post, the IRS had initially rejected the request from the Department of Homeland Security, but with the departure of O'Donnell last week, the new acting commissioner, Melanie Krause, has indicated she is open to exploring how to comply with the request.

However, that move could violate taxpayer data privacy laws, one Senate Democrat warned

"The Trump administration is attempting to illegally weaponize our tax system against people it deems undesirable, and if anybody believes this abuse will begin and end with immigrants, they're dead wrong," said Senate Finance Committee ranking member Ron Wyden, D-Oregon, in a statement. "Trump doesn't care about taxpayer privacy laws and has likely promised to pardon staff who help him violate them, but those individuals would be wise to remember that Trump can't pardon them out from under the heavy civil damages they're risking with the choices they make in the coming days, weeks and months."