Treasury: IRS funding boost improved tax season response

Hours before the IRS’ deadline for the tax filing season, the Treasury Department reported Monday that $80 billion in additional funding from the Inflation Reduction Act meant the IRS had easily exceeded new targets.

The federal tax agency’s Level of Service for phone queries hit 88%, topping the 85% target, slashed call waiting times from almost 30 minutes to three minutes saving taxpayers 1.4 million hours waiting on hold and dealt with a million more calls than in the 2023 filing season, the Treasury said in a news release.

The introduction of paperless filing and other new technology was also hailed with taxpayers availing themselves of a new and improved “Where’s My Refund” online tool 275 million times while the number of taxpayers who received face-to-face help at 70 walk-in assistance centers across the country jumped by 170,000.

“Thanks to resources from President Biden’s Inflation Reduction Actd, the IRS has built on the progress made during Filing Season 2023, delivering world class service in Filing Season 2024.

“This marks a vast improvement over 2022, when, due to a lack of resources, the IRS hit just 15% Level of Service to taxpayers and millions of refunds were delayed for months,” the Treasury said.

The IRS roundly beat the 5-minute average call-wait time target, one of the goals set by Treasury Secretary Janet Yellen, down from the 2022 season when call wait times were 28 minutes, and answered 17% more calls through April 6 than in Filing Season 2023, even as demand jumped by 13%.

In all, the IRS answered nearly 3 million more calls than it did during the 2022 filing season prior to receiving the new IRA resources. However, the 1.4 million hours saved in the time spent on hold was achieved by expanding the availability of a “call back” option to 97% of eligible taxpayers at the beginning of the call when projected wait times exceed 15 minutes.

The agency also used the funding to provide more than 11,000 additional hours of assistance to customers in person at 54 new or reopened walkin help centers, well in excess of the 8,500 hours target and boosted the number of people receiving free one-on-one tax preparation support by more than 200,000 – mostly through volunteers – four times the 50,000 target.

The Treasury also said the IRS’ improved and mobile-device compatible refund service expedited the process had slashed phone queries by providing clearer and more detailed updates, including whether a customer is required to respond to a letter requesting additional information.

The new service offers practical, personalized steps to help progress taxpayer’s refunds such as allowing them to verify their identity and tax return information and proving dates in real-time. Previously, the service offered only a standard message and directed callers to FAQs.

The Treasury said the IRS’ optional Paperless Processing Initiative was also making progress, enabling digital responses to correspondence and e-filing of an additional 13 tax forms via a Document Upload Tool, up from the nine when it was launched last season,

“As of April 12, 2024, the IRS has received nearly 900,000 responses to notices via the online tool. As a result of achieving this goal, the IRS estimates more than 94% of individual taxpayers will no longer have to send mail to the IRS,” the Treasury said.

“Taxpayers use these non-tax forms to request or submit information on a range of topics, including identity theft and proof of eligibility for key credits and deductions to help working Americans.”

It added that attaining the milestone would enable up to 125 million paper documents to be submitted digitally annually, with 4.4 million forms filed digitally so far through April 6.

This year’s tax filing season officially began on Jan. 29 when the IRS began accepting and processing the first of an expected 128.7 million individual tax returns for 2023.