As the April 15, 2024 tax filing deadline approaches, staying informed is critical. It's not just about knowing the due dates. Understanding significant IRS changes and new filing methods is crucial. Below are five essential aspects taxpayers need to know before filing this year's return.
Improved IRS Customer Service Experience
The IRS has reported better service metrics for this tax season than in recent years. Compared to the 28-minute average call wait time in 2022, the IRS has slashed waiting times to a mere three minutes in 2023. The agency has also managed to answer 65 percent more calls than the previous year - a marked gain in responsiveness. Additionally, the backlog of tax returns dating back to the pandemic has been significantly reduced from 16.5 million in December 2020 to 6.1 million, exhibiting a notable effort by the IRS to streamline its operations after the recent budget increase.
Be Aware of Increasing Tax Scams
Digitalization has transformed tax filing. Now, vigilance against online scams is crucial. The IRS issues a clear warning. They never request sensitive info or payments via gift cards or wire transfers. Recently, the FCC tackled a massive robocall scam. This scam tricked people with a fake 'National Tax Relief Program.' Social media influencers and unsound tax advice present another layer of risk, often leading to misleading or fraudulent guidance.
Direct File - A Free Filing Option
Taxpayers in 12 states have a new tool at their disposal - Direct File. This pilot program enables filers to submit their taxes directly on the IRS website, offering an alternative to other paid electronic filing methods. A recent update to the program will allow Direct File to access taxpayers' adjusted gross income from previous filings, a feature designed to minimize errors and streamline the process.
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Tax Preparers Respond to Direct File
In reaction to the IRS's Direct File service, private tax preparation companies have amped up their lobbying efforts. TurboTax maker Intuit has significantly increased its lobbying spending, reaching nearly $3.8 million in 2023. As the Direct File option continues to gain a foothold, private-sector tax preparers are protecting their interests, ensuring that their services remain relevant and that they have a stake in the evolving tax preparation landscape.
IRS Budget Allocated to Overhaul and Improvements
Following the $78 billion budget increase allocated by the 2022 Inflation Reduction Act, TIGTA reports a 5.6 percent expenditure of these funds by the IRS. However, nearly half of that spending has been directed towards the 2023 budget to cover standard operating expenses. The rest is invested in enhancing audits, updating operations, expanding taxpayer services, and advancing technological modernization. It's crucial to acknowledge that despite these investments, confident Republican lawmakers are considering rolling back some of the funds dedicated to these improvements.
With the fiscal deadline approaching, taxpayers are entering a season of significant changes within the IRS, propelled by a major funding increase and the introduction of innovative ways to file taxes. Whether it's understanding enhanced IRS services, keeping protectively aware of tax scams, utilizing the new Direct File tool, monitoring tax preparers' lobbying strategies, or noting how IRS funds are utilized, these are pivotal elements marking the 2024 tax season.
