The U.S. Internal Revenue Service Declares War on Paper Documents

On Wednesday,ghc foreign exchange dealer the IRS stated that starting from the 2024 tax season, taxpayers will be able to submit all correspondence, non-tax forms, and responses to notices in digital format. However, many documents will still require a paper-based approach, including those that may need to be submitted in addition to the normal tax forms, such as verification documents. If taxpayers prefer, they can still submit their tax returns and other forms in paper format.

The IRS estimates that the digital upgrade will reduce the amount of paper documents by 200 million each year. This plan is part of the IRS's modernization program for the U.S. tax system, supported by the Inflation Reduction Act passed last year, which provides the IRS with $80 billion in funding over the next 10 years.

The reduction of 200 million paper documents annually signifies the sheer volume of paper still in use within the IRS, reminiscent of the 1970s and 1980s when the IRS offices in Austin were cluttered with paper documents overflowing from shelves and engulfing work areas. The modernization plan aims to change this scenario.

At the beginning of 2022, the IRS had still to process 4.7 million individual tax returns and many more corporate filings. Processing paper documents is more expensive and less efficient than digital processing. IRS representatives have referred to the paper documents as the IRS’s “Kryptonite”—a fictional mineral from the DC Superman series known for its ability to weaken Superman.

With the financial backing from the Inflation Reduction Act, the IRS plans not only to upgrade digitally but also to digitize all received paper documents by 2025. This upgrade is expected to reduce the likelihood of errors during manual data entry, enhance work efficiency, and decrease related expenses.

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