IRS adds extra resources to help process returns and deliver tax refunds faster

Rebecca Chen

The Treasury Department on Monday unveiled several new efforts at the Internal Revenue Service to help taxpayers file their returns and get their refunds quicker this season.

The IRS added more customer service representatives, is providing more online tools, and is modernizing how it processes paper returns, U.S. Deputy Secretary of the Treasury Wally Adeyemo said in a press briefing.

The improvements, which are funded by the Inflation Reduction Act signed in August, should bolster return-processing time and get refunds out faster for some taxpayers. The upgrades also come after the IRS struggled with employee shortages and a backlog of millions of unprocessed returns in recent years.

Regarding the backlog, the IRS is also assigning more people to work through that inventory as quickly as possible, a Treasury official said. In the meantime, the agency is putting together a plan to deploy $80 billion to improve operations and intends to send those details to Treasury Secretary Janet Yellen by February.

Here are the changes the IRS has already made for this tax season.

WASHINGTON, DC - APRIL 27: The Internal Revenue Service headquarters building appeared to be mostly empty April 27, 2020 in the Federal Triangle section of Washington, DC. The IRS called about 10,000 volunteer employees back to work Monday at 10 of its mission critical locations to work on taxpayer correspondence, handling tax documents, taking telephone calls and other actions related to the tax filing season. (Photo by Chip Somodevilla/Getty Images)

5,000 more customer-service reps

The IRS hired 5,000 more employees to help answer phones and provide other services. It is also backfilling positions left vacant by older workers who retired.

The additional help will ease the burden that the IRS call center faced during the pandemic when only 11% of calls reached an IRS agent and fewer than 15,000 employees were available to answer 240 million calls. Per a Treasury official, the goal is to keep waiting time under 15 minutes per call.

In addition, the IRS will expand its automated and online service system to assist taxpayers with issues without having to call customer service.

OGDEN, UTAH - MARCH 31: A sign seeking new new employees hangs outside at the Internal Revenue Service's facility on March 31, 2022 in Ogden, Utah. (Photo by Alex Goodlett for The Washington Post via Getty Images)
A sign seeking new new employees hangs outside at the Internal Revenue Service's facility on March 31, 2022 in Ogden, Utah. (Photo by Alex Goodlett for The Washington Post via Getty Images) (The Washington Post via Getty Images)

Online option to respond to notices

The IRS will open online portals that allow taxpayers to respond to notices electronically. Taxpayers can now upload verification documents and support online, rather than the previously mail-in-only method. The new technology lets filers resolve tax notices and receive benefits quicker and more efficiently.

However, the online portals option will only be available for specific IRS notices.

In-person tax assistance center

Taxpayer Assistance Centers will be staffed with employees to address tax questions this season. The IRS hired almost 650 more staff members to provide in-person support nationwide at its 361 locations. The staffers can answer tax questions for individuals and small businesses, help taxpayers apply for Individual Tax Identification Numbers if they don't have Social Security numbers, and assist those with a language barrier.

In addition, more than 100 IRS tax assistance centers across the nation will host walk-in help on three different Saturdays during the tax season. The locations and times can be found on the IRS website.

Automated scanning of paper returns

The IRS will start processing paper returns through an automated scanning system. The new procedure means taxpayers who paper-filed their returns should get their refunds sooner than in previous years. Filers who rely on tax returns for personal or business reasons should also get tax transcripts much faster.

OGDEN, UTAH - MARCH 31: An IRS employee walks through tax documents in the staging warehouse at a Internal Revenue Service facility on March 31, 2022 in Ogden, Utah. (Photo by Alex Goodlett for The Washington Post via Getty Images)
An IRS employee walks through tax documents in the staging warehouse at a Internal Revenue Service facility on March 31, 2022 in Ogden, Utah. (Photo by Alex Goodlett for The Washington Post via Getty Images) (The Washington Post via Getty Images)

As of 2022, the IRS was still processing paper returns manually, meaning IRS employees had to input every number on every paper return into the system. The daunting task left a backlog of 21 million unprocessed returns last year, delaying the disbursement of tax refunds to many households.

Per a Treasury official, the IRS contracted a new vendor for the scanning process, which in the past had come with challenges. The automated system will scan paper returns and upload them into a system that can be reviewed in any IRS location. The scanning should alleviate the pileup of paper returns going to its Ogden, Utah, location, the Treasury official said.

Rebecca is a reporter for Yahoo Finance.

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