Over the last decade, the IRS’s budget has been subject to significant cuts, leading to decreased staffing, resources, and overall operational capacity. The underfunding hampered the ability of the IRS to perform essential functions such as auditing tax returns; it also impeded the IRS’s ability to provide quality customer service, update its aging technology, and adapt to new challenges.

However, with the passing of the Inflation Reduction Act in 2022, the IRS has received $80 billion to address some of its most pressing issues. In addition to their normal challenges, there has been a backlog of tax returns and the shortage of workers due to COVID-19 and early retirement. To resolve all their issues, the IRS has been tasked to create a report called the “Strategic Operating Plan” detailing how they will use the $80 billion funding distributed over ten years to restore and revitalize the IRS to meet the demands of everyday Americans.

These changes will provide better access to data, improved integrations, and a more transparent system, allowing taxpayers and tax software providers to navigate the tax landscape a little easier. At april, we’re committed to staying up-to-date with these developments and incorporating them into our tax solution to ensure our partners thrive in the ever-evolving tax landscape.

Key IRS Changes and Their Impact

Improved Digital Portal With Better Visibility and Control

In the next two years, The IRS wants to build a portal with a modern design and better tools for online tax filers. People can use an online account to see their audit status and respond to any IRS notices online and will tell you if you made a mistake on your taxes when you submit them online. The system will let you fix your errors and resend them back to the IRS with ease, check your refund status, opt-in for direct deposit, and change your settings using your online account. People will also be able to receive alerts that update them on their payment obligations.

The current tax ecosystem largely depends on tax software providers to manage and convey critical information to taxpayers. This system, though functional, has often resulted in a lag between when taxpayers submit their taxes and when they receive feedback or updates. The IRS’ upcoming modernization will improve the information gap and allow taxpayers to respond to IRS notices and monitor audit statuses quickly online.

An Easier Way to Stay Up to Date With Tax Laws

The new IRS portal will update taxpayers on tax law changes and aims to assist taxpayers in identifying and claiming all applicable credits and deductions in real-time.

Right now, it’s up to the taxpayer to keep up with any changes in tax laws and figure out what they mean for them. That can be tough and confusing, and sometimes you might miss out on a money-saving opportunity or information that could dictate important life decisions. This new portal will keep taxpayers in the know, and a step towards democratizing tax information could contribute to a more fair system for everyone.

Providing Communications in Simpler Language; Translating to 8 Different Languages

The IRS is upgrading its technology systems to address issues of cultural, language, and social differences. The IRS will also make it easier to understand their letters by writing them in simplified language and providing them in eight different languages.

The IRS is using this initiative to move forward with digital systems that provide improved access to data, seamless integrations, and a more transparent system. This initiative ensures a more inclusive approach to tax information. It ensures that the diverse range of American taxpayers can understand and interact with tax information more effectively. From correcting errors on tax submissions to receiving timely alerts about payment obligations, this portal offers control and marks a stark departure from the current norm.

To learn more about how April handles IRS changes year-by-year, contact our sales team today. Together, we can navigate the ever-changing tax landscape and unlock new opportunities for growth and success.

This content is provided for informational purposes only and should not be construed as tax, legal, financial, or other professional advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need specific advice.