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IRS to Move to Paperless Processing by 2025

S.J. Steinhardt
Published Date:
Aug 2, 2023

The IRS will achieve paperless processing for all tax returns by filing season 2025, through a new "Paperless Processing Initiative," the Department of the Treasury announced.

The initiative aims to eliminate up to 200 million pieces of paper annually, cut processing times in half, and expedite refunds by several weeks. In the meantime, taxpayers will have the option to go paperless for IRS correspondence by the 2024 filing season.

Currently, the IRS receives about 76 million paper tax returns and forms, and 125 million pieces of correspondence, notice responses and non-tax forms each year, and it has limited capability to accept these forms digitally or to digitize the paper it receives. Hampering the timely processing of all of this paper is the laborious efforts that it entails; taxpayers had to respond to notices for matters such as document verification through the mail, and IRS employees had to manually enter numbers from paper returns into computers one digit at a time.

The additional funding provided by the Inflation Reduction Act will aid, and has already aided, in the progress toward more automation. Taxpayers are now able to respond to more notices online, and the IRS claims to have made significant progress adopting new technology that automates the scanning of millions of paper returns.

The IRS estimated that 94 percent of individual taxpayers will no longer need to send it mail once the program begins in January, The Washington Post reported.

“This ‘Paperless Processing’ initiative is the key that unlocks other customer service improvements,” Treasury Secretary Janet L. Yellen said in remarks prepared for delivery during a visit to an IRS paper processing facility in McLean, Va., as reported by the Post and the Associated Press. “Thanks to the [Inflation Reduction Act], we are in the process of transforming the IRS into a digital-first agency.”

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