Tax Professionals Weigh in on IRS Plans To Go Paperless

Living in a digital age means that more and more businesses are going completely paperless each year — all but eliminating paper correspondences, files, and forms. The IRS has plans to follow suit, with hopes to achieve completely paperless processing of tax returns by 2025. 

How will paperless processing affect the tax return process for taxpayers? Tax professionals weigh in on the pros and cons of IRS plans to go paperless and what you can expect. 

The IRS Plans To Go Paperless

Most taxpayers inherently know that communicating with the IRS is slow-going. Waiting to receive tax refunds can feel like a never-ending game. And responding to correspondences through the mail, per the IRS’s requirements, feels outdated in this digital age. 

Paper forms are a major source of IRS delays. Each year, the IRS processes approximately 76 million paper tax returns and forms and receives over 125 million pieces of correspondence in the mail. The agency also pays $40 million annually to store one billion historical documents. 

In the days of digital communication and file storage, paper forms are no longer necessary. The IRS has begun an initiative to reduce paper correspondences and documents in an effort to streamline its processes and save money.

Under this plan, taxpayers will be able to submit all correspondence and non-tax forms electronically in filing season 2024, allowing approximately 94% of taxpayers to never send mail to the IRS again. By filing season 2025, the IRS hopes to add an additional 150 non-tax forms to its digital database in mobile-friendly formats, along with digitizing its one billion historical documents. 

The IRS is still working to digitize its tax forms, with hopes to eventually enable taxpayers to submit all forms and correspondences virtually. 

Pros of Going Paperless

Switching to paperless correspondences, forms, and notice responses poses many benefits: 

• Streamline communications: The IRS previously required taxpayers to respond to all official communications through the mail rather than by phone or email. With the move for the IRS to go paperless, communications may be much faster. 
• Reduce costs on both ends: Printing and mailing physical documents costs money. Eliminating this process in favor of digital correspondences can save you on printing costs and reduce overhead for the IRS, allowing the agency to dedicate more workers and resources to directly helping taxpayers. 
• Simplify forms: Offering mobile-friendly tax forms will simplify the process of filing tax returns for millions of Americans who prefer to use their smartphones instead of computers. 
• Options for paper forms: Those who prefer filing paper forms and mail correspondences will still be able to do so under the new program. 

Cons of Going Paperless

While the process of transforming the IRS’s paper processing has been a long time coming, it poses a few disadvantages that taxpayers should consider: 

• Higher risk of scams: The IRS has historically required paper correspondences to reduce the risk of scams for taxpayers. Switching to digital could lead more taxpayers to fall victim to scams as they learn what official communications look like in a digital format. 
• Slower identity theft resolution: More IRS employees will need to spend time assisting the process of going paperless. The IRS has already taken employees from its identity theft department to work its account management phone lines, leading to delays in resolving non-tax issues. 
• Adjustment period: Paperless tax forms and correspondences will take some adjusting for less tech-savvy taxpayers, which could lead to more errors. 

While many taxpayers have been waiting for the IRS to go paperless for some time, the process will still take a few years to complete. Do you have questions about filing your tax return? Contact Levy & Associates, Inc., today at 800-TAX-LEVY.