IRS Boasts New and Improved Online Tools and Digital Services For Taxpayers

Thanks to the funding it received from the Inflation Reduction Act, the IRS said it has continued to make significant enhancements to online taxpayer services, including adding six new features to the Individual Online Account, a Spanish version of the Business Tax Account tool, and more amended business forms that can be filed electronically, the agency said on July 25.

IRS Commissioner Danny Werfel provided a quarterly update on the agency’s Strategic Operating Plan, which sets out several priorities for the IRS to accomplish using Inflation Reduction Act funding, which is in danger of being slashed further if Republicans take control of the White House and Congress.

“Funding from the Inflation Reduction Act is helping spur innovation and improvement across the IRS to transform our operations in our work to help taxpayers and the nation,” Werfel said in a statement. “This progress can be seen in our continued expansion of our online accounts to provide more features, increased use of new digital tools, and additional special activities to help taxpayers in-person. By providing digital forms, making payments easier, and continuing work to reduce paper-based processes that have long hampered the IRS and frustrated taxpayers, our progress is accelerating to make long-overdue improvements.”

As part of IRS’s digitization initiative, taxpayers will 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, the agency said. The IRS noted that it has hit or is progressing toward several milestones toward these goals.

One of the goals the agency has met is adding several new features in Individual Online Account that give taxpayers the ability to:

• Retrieve all their tax-related information from one source, including Wage & Income Account, Record of Account, and Return transcripts.
• Request an update to their Identity Protection PIN using their smartphones or tablets.
• View information about the status of their audit instead of calling the IRS to obtain audit status information.
• Use a Lien Payoff Calculator to access lien information, calculate their lien payoff amount, and generate a letter for download/print.
• Complete the Pending Installment Agreement process within Online Account without having to be re-routed to a separate application.
• View a comprehensive overview of their account information, including the status of their tax refund as it’s being processed.

In addition, Business Tax Account is now available in Spanish—and improvements have been made so eligible business taxpayers can now see their balance due and make payments all in one place, according to the IRS. Previously, the balance due had to be viewed in a separate place from where the payment was made, adding another step for businesses trying to make payments. Sole proprietors can 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.

The IRS also said on Thursday that business Forms 940, 941, 943, and 945, including the Spanish versions of Forms 941 and 943, can now be filed electronically. IRS employees can now access taxpayer return information electronically, allowing them to provide more complete and accurate answers to taxpayer questions. In addition, the IRS can now accept related electronic payments while minimizing errors normally associated with processing paper returns. Taxpayers can still choose to submit a paper version, the agency said.

As part of its paperless processing initiative, the IRS now has a total of 30 forms available for mobile use, allowing taxpayers to fill out common non-tax forms on cellphones and tablet devices and then submit them to the IRS digitally. Taxpayers have submitted more than 72,000 mobile-friendly forms since the initiative launched in September 2023, according to the IRS.

“Providing taxpayers with common forms in this new format offers them a safe and fast way to electronically engage with the IRS,” the agency stated in a media release on Thursday. “This can also help reduce mail and paper when they send forms to the IRS. Forms adapt to any screen size and ensure information is entered into all required data fields. This can help reduce errors, which can delay processing.”

In addition, taxpayers can access five of these 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
• Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit

The IRS also said it has redesigned 100 of the most common notices that individual taxpayers receive as part of its Simple Notice Initiative in preparation for the 2025 filing season. These notices make up about 90% of total notice volume sent to individual taxpayers, representing about 150 million notices sent to individual taxpayers in 2022.

Other key statistics and modernization initiatives the IRS highlighted on Thursday include:

• During the 2024 filing season, IRS Taxpayer Assistance Centers had a 37% increase in face-to-face contacts, with the IRS working with nearly 1.3 million taxpayers for this calendar year through July 13. The IRS also received 2.7 million volunteer prepared returns to date compared to 2.5 million last year, an increase of 9.1%.
• The IRS has replaced scanning equipment that is older than five years and installed automated mail-sorter machines in the six highest-volume IRS locations, streamlining the process of mail sorting, opening, and scanning. As of the end of June, the IRS had scanned more than 2 million pieces of paper.
• The agency’s Document Upload Tool recently accepting its one millionth taxpayer submission.
• The IRS has doubled the network bandwidth at many of its worksites to meet increased workforce demand and improve taxpayer service. The agency is on track to complete this phase of network expansion at all sites ahead of the 2025 filing season.
• Operationally, the IRS is updating hundreds of legacy human resources IT systems, which the agency said will help with talent acquisition, workforce planning, labor and employee relations, and other key HR functions as the agency looks to hire thousands of new auditors and other personnel in the coming years.

What’s up next?

The IRS noted it has several initiatives that are expected to accelerate later this year and into the 2025 filing season, including:

• Continuing to focus on enhancing live assistance through improved efficiency in call centers, reducing paper, and continued expanded staffing levels at Taxpayer Assistance Centers, while working to ensure taxpayers are aware of all available credits and benefits.
• Expanding online services by expanding the features available in Online Account, including digital copies of notices, status updates, secure two-way messaging, and expanded payment options.
• Accelerating digitalization by providing new non-tax forms in digital mobile-friendly formats, in addition to the 20 delivered in fiscal year 2024, as well as scanning at the point of entry virtually all paper-filed tax and information returns.
• Increased taxpayer information by expanding information available on important issues ranging from the availability of important tax credits and benefits, as well as more consumer-focused information raising awareness about emerging tax scams and schemes.