IRS Improvements: A Closer Look at the Impact of the Inflation Reduction Act
IRS Commissioner Danny Werfel’s Optimism
IRS Commissioner Danny Werfel acknowledges that dealing with the IRS may never be enjoyable for taxpayers, but he believes that recent changes have made the process simpler and more user-friendly.
Enhanced Taxpayer Experience
Taxpayers now have more options to file, receive real-time refund information, and get their refunds faster. Hold times when contacting the IRS have also decreased significantly.
Financial Boost from the Inflation Reduction Act
The Inflation Reduction Act allocated nearly $80 billion for the IRS to enhance enforcement, operations, customer service, and upgrade its technology. Despite some funds being withheld by congressional Republicans, the IRA has been a significant financial boost for the agency.
Positive Outcomes for Taxpayers
Werfel emphasized that the IRA’s focus on improving outcomes for all taxpayers is now evident in the enhanced services provided by the IRS.
2024 Filing Season Stats
The recent filing season showcased notable improvements in IRS customer service:
Call Center Performance
88% of calls were answered, exceeding the 85% target and a vast improvement from the 15% rate in 2022.
Reduced Wait Times
The average call wait time was only three minutes, below the target of five minutes, despite a 17% increase in call volume compared to the previous year.
In-Person Tax Prep
Volunteer tax preparation for returns has seen a significant increase, surpassing the initial target.
Direct File Initiative
One of the IRA-funded initiatives, Direct File, allows taxpayers in select states to file their taxes directly with the IRS electronically, free of charge.
Usage Growth
Usage of Direct File increased to over 5,000 returns per day in the final week of the filing season, with a majority of returns coming from specific states.
Impact on Tax Enforcement
The IRA funding has enabled the IRS to enhance tax enforcement efforts, particularly in closing the tax gap and targeting large corporations and partnerships.
Focus on Tax Compliance
The IRS is now using advanced technology and analytics to track tax compliance in complex organizations, a task previously hindered by limited resources.
Targeting Wealthy Individuals
The increased enforcement efforts are primarily focused on higher-net-worth individuals to ensure fair tax payments.
Support for IRS Initiatives
Despite some opposition, supporters believe that the IRS’s dedication to improving tax compliance and service for all taxpayers is a step in the right direction.
Read More of this Story at www.huffpost.com – 2024-04-15 09:45:02
Read More US Economic News