IRS to simplify taxpayer notices
WASHINGTON — The IRS wants to rewrite its complicated letters to taxpayers and speak to people in plain English.
The federal tax collector is rewriting and sending out commonly received notices ahead of the 2024 tax filing season as part of its new “Simple Notice Initiative.”
“Redesigned notices will be shorter, clearer and easier to understand,” Treasury Secretary Janet Yellen said on a Tuesday call with reporters to preview the initiative. “Taxpayers will see the difference when they open the mail and when they log into their online accounts.”
The 2024 tax season begins on January 29.
More than 170 million notices are sent out annually by the IRS to taxpayers regarding credits, deductions and taxes owed. The notices are often needlessly long and filled with legal jargon — forcing many confused taxpayers to call the agency and jam up the phone lines.
Simpler notices in plain language will help people understand their tax liability and improve tax enforcement, said IRS Commissioner Daniel Werfel, who said the initiative is paid for with funding from Democrats’ Inflation Reduction Act.
“This is another reason why the inflation Reduction Act funding is so important,” he said.
The agency received an $80 billion infusion of cash for the IRS over 10 years under the IRA passed into law in August 2022, though some of that money has been cut back and is in constant threat of cuts.
The effort to reduce paperwork and make the IRS easier to work with is part of the agency’s paperless processing initiative announced last August, which is an effort to reduce the exorbitant load of paperwork that has plagued the agency.
Under the initiative, most people will be able to submit everything but their tax returns digitally in 2024. And as the IRS pilots its new electronic free file tax return system starting in 2024, the agency will be able to process everything, including tax returns, digitally by 2025.
“We need to put more of these letters into plain language— something an average person can understand” Werfel said, which will help the agency more effectively in its collection aims.
“The clearer our notices are- for example, when a balance is due — the more rapidly and effectively those balance dues will be understood by the taxpayer and paid,” Werfel said.