Taxpayer advocate calls on IRS to expand online services

National Taxpayer Advocate Erin Collins is urging the Internal Revenue Service to expand online services for taxpayers, tax professionals and businesses while reducing its reliance on paper to improve taxpayer service.

In a blog post Thursday, Collins offered a number of recommendations for enhancing taxpayer online services, some of them drawn from her most recent annual report to Congress. Collins has pointed to the problems the IRS has experienced with processing paper correspondence and tax returns, frequently referring to paper as the IRS’s “Kryptonite.” Those problems were magnified during the pandemic, when the IRS saw millions of pieces of correspondence build up in trailers outside IRS facilities in 2020. The IRS is still catching up with paper correspondence from last year. 

The IRS has offered online taxpayer accounts for several years, but they have limited functionality right now. Currently they can view their account balances, make payments, view tax records, view select notices and letters, and see authorizations for online requests from their tax preparer. 

The IRS came under criticism earlier this year for using a third-party contractor, ID.me, that began asking taxpayers to submit a selfie and a government document like a driver’s license to authenticate themselves as a way to deter identity theft. Privacy advocates have pushed the IRS to offer other options, and the IRS has responded by offering a virtual interview option while looking to move to the federal government’s own Login.gov service.

Collins offered several suggestions in her blog for improving taxpayer service, including the ability to send and receive messages with the IRS; upload or download documents or data; electronically chat with an IRS representative; receive emails of pending action items; and electronically access notices or correspondence, together with the ability to upload responses. She would also like taxpayers to be able to obtain filing or payment reminders and regular billing statements online; check the status of an original or amended tax return; receive notification of delays and instructions on how to clarify an issue; and communicate with an IRS revenue agent, revenue officer or appeals officer.

“Imagine what the IRS can accomplish and how much time and effort it could save if taxpayers could easily access their tax information online,” Collins wrote. “I would like to stop merely imagining this; the IRS needs to have robust online accounts available for all taxpayers and tax professionals that provide information, guidance and the capability to work and resolve issues online.”

She noted that while the IRS offers some digital self-service options such as the IRS2Go app, the Where’s My Refund? and Where’s My Amended Return? online tools, and Taxpayer Digital Communications, many of them are standalone applications that aren’t readily accessible from one central location or able to offer a holistic experience to both taxpayers and tax pros. In addition, business taxpayers currently don’t have the ability to access a business online account to retrieve a transcript or review payments, and tax pros lack the ability to access their clients’ data within the Tax Pro Account.

“Tax professionals play a key role in tax administration,” Collins wrote. “Providing them convenient access to their clients’ data and allowing them the ability to electronically communicate with the IRS and take actions authorized by the taxpayer would be invaluable in helping tax professionals better assist taxpayers.”