The Internal Revenue Service and the Treasury Department reported further progress Thursday on offering more online tools and expanded taxpayer service, including six new features for the Individual Online Account, a new Spanish version of the Business Tax Account, and additional business forms that can be filed electronically.
Forms 940, 941, 943 and 945, including the Spanish version of Forms 941 and 943, can now be filed electronically. The IRS also said it's reached a milestone of 1 million submissions through the Document Upload Tool, and it's opening more pop-up Taxpayer Assistance Centers to help taxpayers in underserved parts of the country, while collecting more than
The announcement came as IRS and Treasury officials delivered the latest update on their use of funding from the Inflation Reduction Act of 2022, which may be imperiled next year with a new administration and Congress.
"Funding from the inflation Reduction Act is spurring innovation and driving improvement across the IRS to transform our operations and our work to help taxpayers and the nation," said IRS Commissioner Danny Werfel during a press call ahead of the announcement. "This progress can be seen in our continued expansion of our online accounts to provide more features for taxpayers, tax professionals and businesses. It's being seen in our increased use of new digital tools, and it's being seen in special activities to help taxpayers in person.
"By doing things like providing digital forms, making payments easier and continuing work to reduce paper-based processes, we are making long overdue improvements at the IRS," he added. "We are reversing situations that have long hampered the IRS and frustrated taxpayers and the tax community. There should be no doubt that we have much more work to do, but we are making substantial progress."
The IRS has been
"We've made functionality improvements to our online platform since our last update, so taxpayers can come to expect the same level of service from IRS online that they experience with their bank or other financial institutions," said Laurel Blatchford, the Treasury Department's chief implementation officer for the Inflation Reduction Act, during the press call. "For example, we're working hard to allow taxpayers the ability to securely file all documents and respond to all notices online, and are making good progress to meet that goal."
Online accounts and document uploads
She noted that the IRS has already added several new features to the Individual Online Account platform, including tools that allow taxpayers to retrieve all of their tax-related information from one source, and view information about the status of their audit at their convenience, instead of having to call the IRS to obtain that same information. Other tools have been enhanced as well.
"The Document Upload Tool, which was launched in 2021 in a limited format and significantly expanded in 2023 with funding from the IRA, accepted its 1 millionth taxpayer submission in early June," Blatchford added. "That means that taxpayers and tax professionals are leveraging this new option in droves to respond digitally to the eligible IRS notices by securely uploading required documents online through irs.gov."
Anyone with a smartphone or a computer can reply to IRS notices by scanning the required documents and uploading them to the agency. "We've accepted more than 1 million submissions via the Document Upload Tool, and we continue to redesign notices, with more than 100 completed so far," said Werfel.
As part of its paperless initiative the IRS is now offering 30 forms in a digital, mobile friendly format, allowing taxpayers to fill them out on cell phones and tablets and submit them electronically.
The forms adapt to any screen size and ensure information is entered into all required data fields to reduce errors that delay processing. Taxpayers can access five forms that require signatures in their Online Account, including:
- Form 13533 - VITA/TCE Partner Sponsor Agreement;
- Form 13533-A - FSA Remote Sponsor Agreement;
- Form 14039-B - Business Identity Theft Affidavit;
- Form 12508 - Questionnaire for Non-Requesting Spouse; and
- Form 14157-A - Tax Return Preparer Fraud or Misconduct Affidavit.
"We want taxpayers and tax professionals to see additional improvements in our operations and our services that will make it easier for them to prepare and file their taxes," said Werfel. "Taxpayers deserve the same functionality in their online accounts that they experience with their bank or other financial institutions. We are working to enable a future in which all taxpayers can meet their responsibilities in a digital manner, if they prefer."
The IRS plans to add new functionality every year so taxpayers will eventually be able to securely file all documents and respond to all notices online, as well as securely access and download their data and account history.
Updates to the Individual Online account allow taxpayers the ability to retrieve more of their tax related information from one source, including Wage & Income, Account, Record of Account, and Return transcripts;
Taxpayers can also request an update to an Identity Protection PIN on their smartphone or tablet. They can view information about the status of their audit within their online account without having to call the IRS. They can access a Lien Payoff Calculator and view their lien information, calculate the payoff amount and generate a letter if needed for download or printing. They can also complete the Pending Installment Agreement process within their account without having to be rerouted to a separate application. Taxpayers can view a comprehensive overview of their account information, including the status of their refund as it is being processed.
The IRS is also making improvements to the Business Tax Account, which is now available in Spanish. Eligible business taxpayers can now see their balance due and make the payment all in one place. Previously, the balance due had to be viewed in a separate place from where the payment was made, complicating the payment process. Businesses can now file amended business forms electronically.
Sole proprietors can also now download business entity transcripts from their Business Tax Account. This transcript shows entity information like business name, address, location address and more for the Employer Identification Number on file.
Funding from the Inflation Reduction Act is also helping the IRS modernize its internal operations and meet its transformation goals, helping the agency replace old out-of-date scanning equipment and mail sorting machines. "These updates allow a more streamlined process of opening, sorting and scanning mail," said Werfel.
The IRS is also continuing to improve its ability to digitalize the paper returns and forms it receives. As of the end of June, the IRS has scanned more than 2 million pieces of paper since the project began in the spring of 2023.
Werfel also previewed what to expect next year, with more features available in online accounts, including digital copies of notices, status updates, secure two-way messaging and expanded payment options. The IRS will be accelerating digitalization by providing new tax forms in digital, mobile friendly formats in addition to the 20 delivered in fiscal year 2024.
In-person assistance
The IRS is also expanding its in-person assistance efforts, especially in underserved and rural communities.
During the filing season, IRS Taxpayer Assistance Centers saw a 37% increase in face-to-face contact with the IRS, working with nearly 1.3 million of those this calendar year through July 13, Werfel noted.
This summer, the IRS is continuing a special series of Community Assistance Visits to give taxpayers living in areas far from the agency's in-person offices an opportunity to meet face-to-face with IRS customer service representatives.
"We are meeting taxpayers where they are, from Roma, Texas to Fairbanks, Alaska to Hazelhurst, Georgia and so many places in between, and helping make the IRS more accessible," said Blatchford.
The visits began last year using IRA funding to provide help for taxpayers who live almost a two-hour drive away from an IRS office, Werfel noted. The IRS has scheduled visits in 11 cities across the country over the summer and into the fall.
The IRS is also continuing its efforts to expand scrutiny of large partnerships, big corporations and high-income individuals and make them pay the taxes they owe.
"More than a decade of budget cuts prevented us from keeping pace with the increasingly complicated set of tools and techniques that the wealthiest taxpayers sometimes use to hide their income and avoid paying their fair share," said Werfel. "We are now taking a variety of steps to close this gap. Earlier this month, we announced that we've collected more than $1 billion from high-wealth taxpayers as part of an effort to ensure these individuals pay what they owe. The initiative focuses on individuals whose income were more than $1 million per year, and each owed the IRS $250,000 "
