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IRS Beginning Paperless Processing Initiative

Within the next two years, the IRS plans on processing every tax correspondence, notice response, and non-tax form digitally as opposed to on paper. This is an effort to reduce the amount of paper that has ultimately cost the agency a lot of time and money.


Last week, the Internal Revenue Service announced the beginning of its “paperless processing” initiative. The new initiative now gives taxpayers the option to go fully paperless for IRS correspondence by the time the 2024 filing season rolls around. Additionally, the agency plans on paperless processing of all tax returns by the 2025 filing season. The new digital era that the IRS hopes to enter is in large thanks to the funding that the agency received under the Inflation Reduction Act. After both the IRS and taxpayers have endured an endless backlog for such a long time, the agency now hopes they can improve overall when it comes to taxpayer service and technology.

Treasury Secretary Statement

“Today, we are announcing that — by the next filing season — taxpayers will be able to digitally submit all correspondence, non-tax forms, and notice responses to the IRS,” said Treasury Secretary Janet Yellen. “Of course, taxpayers will always have the choice to submit documents by paper. For those taxpayers, by filing season 2025, the IRS is committing to digitally process 100% of tax and information returns that are submitted by paper — as well as half of all paper correspondence, non-tax forms, and notice responses. It will also digitalize historical documents that are currently in storage at the IRS.”

Crunching the Numbers

Every year, the IRS receives roughly 76 million paper tax returns and forms, along with 125 million other pieces of correspondence, notice responses, and other non-tax forms. Before the Inflation Reduction Act was introduced, the agency did not have the capacity to process and digitalize these forms. Now with some funding secured, the IRS hopes it can speed up the digitalization process to benefit the taxpayers.

Wrap Up

The IRS plans to be fully paperless by the year 2026, which will ultimately save the agency roughly $40 million annually in paper storage fees. While most people agree with the agency’s newest initiative, there are people warning the IRS to be cautious when making this transition. “They have very ambitious plans to modernize and improve the technology capability, and that’s all good,” said Mark Everson, a former IRS commissioner. “I’m simply saying better safe than sorry as they go forward. They can’t be so hellbent to meet a specific deadline or timeline that it increases the risk significantly of a problem because all hell will break loose if there’s a major problem.”

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