The IRS is finally making a big move that could change the way millions of Americans deal with their taxes. For decades, taxpayers have been frustrated with long delays, mountains of paperwork, and the slow pace of refunds. But now, the IRS is stepping into the digital age with a bold plan to go almost completely paperless by 2025. This shift is designed to make filing and responding to the IRS easier, faster, and more efficient than ever before.
Why the IRS is going paperless
The IRS handles a massive amount of paper every year — about 200 million tax returns, forms, and other documents. Add to that over a billion historical records stored in warehouses, costing around $40 million each year to maintain. The heavy reliance on paper has caused big problems for taxpayers and the agency alike. Long backlogs, slow processing, and errors from manually entering information have made the system less effective.
By going digital, the IRS wants to eliminate these issues. Treasury Secretary Janet Yellen called it a shift to becoming a “digital-first agency,” made possible through funding from the Inflation Reduction Act (IRA). The goal is to let taxpayers do nearly everything online — from filing forms to responding to notices — while still giving people the option to send documents by mail if they prefer.
The timeline for the IRS paperless push
The IRS isn’t waiting until 2025 to get started. The rollout is happening in phases:
Filing Season 2024:
- Taxpayers will be able to submit all correspondence, non-tax forms, and notice responses online.
- Over 20 additional tax forms will be available for e-filing, including amendments to common payroll forms like Forms 940 and 941.
- At least 20 of the most-used non-tax forms will become digital and mobile-friendly, making them easier for people to complete on their phones or computers.
- This shift is expected to cut out up to 125 million pieces of paper every year.
Filing Season 2025: (This Year)
- The IRS will be able to digitally process all paper-filed tax returns.
- An additional 150 non-tax forms will become mobile-friendly and digital.
- Half of all paper-submitted correspondence and notice responses will be processed digitally.
- Quicker digital processing will let the IRS issue refunds several weeks faster.
- The IRS will start digitizing up to 1 billion historical documents, saving about $40 million in storage costs each year.
By Filing Season 2026:
- All correspondence, forms, and notice responses submitted on paper will be processed digitally.
- This will complete the IRS’s transformation into a truly digital-first agency.
How this helps taxpayers
The IRS’s paperless processing initiative is about more than just saving space in warehouses. It has real benefits for everyday taxpayers:
- Faster refunds: Since paper returns won’t need manual entry, processing times will drop significantly.
- Easier communication: No more waiting for weeks after mailing a notice response. Taxpayers can submit responses digitally.
- Mobile access: With many forms becoming mobile-friendly, people who only have smartphones will find it easier to file and respond.
- Less paperwork stress: Filing taxes and responding to the IRS will no longer mean piles of paperwork.
For years, taxpayers have had to rely on mail to respond to IRS notices, which often slowed down issue resolution. With digitization, IRS employees will have direct access to taxpayer data, which means faster answers and better customer service.
Technology and AI in action
The IRS isn’t just scanning paper into PDFs. The plan involves using advanced technology like AI-driven scanning, pattern recognition, and data analytics. After digitizing paper forms, the IRS can quickly extract data, cut down errors, and use analytics to spot tax fraud or complex cases involving large corporations and wealthy individuals. This will help the IRS close tax gaps and ensure fairness while improving service for everyone else.
Cutting costs and improving efficiency
The numbers behind this move are striking:
- 200 million documents eliminated annually by going digital.
- 76 million paper returns processed digitally starting in 2025.
- 125 million pieces of correspondence submitted digitally per year since 2024.
- $40 million per year saved in storage costs once historical documents are digitized.
These savings mean the IRS can focus its resources on improving services and cutting down the backlog of unprocessed returns, which in the past caused major delays for taxpayers waiting for refunds.
The funding challenge
The Inflation Reduction Act provides $80 billion to power the paperless initiative, but uncertainty remains about how much funding the IRS will keep. Recent budget negotiations cut $1.4 billion from IRS funding, and lawmakers plan to redirect another $20 billion to other government programs. Even so, the agency is moving forward with its modernization plan, emphasizing that digital transformation is no longer optional — it’s necessary.
What this means for the future
By 2025, filing taxes could look very different. Imagine being able to:
- File any form, amend returns, or respond to an IRS notice online.
- Access mobile-friendly forms that work just as easily on a smartphone as on a computer.
- Receive your tax refund in weeks instead of months.
- Avoid errors caused by manual entry of paper forms.
For taxpayers, this shift represents less hassle, more convenience, and faster service. For the IRS, it represents efficiency, reduced costs, and the ability to finally manage the enormous amount of paperwork that has slowed the system for decades.
The bottom line
The IRS’s paperless processing initiative is a massive transformation that’s long overdue. By 2025, the agency expects to digitize nearly everything, cutting back on billions of pieces of paper, speeding up refunds, and making the tax process less stressful for everyone. Taxpayers will still have the option to file on paper, but for those ready to go digital, the future looks much faster and simpler.
In short, the IRS is trading in its mountains of paper for a streamlined, digital-first approach powered by technology and AI. If it succeeds, tax season might finally become less of a headache — and more of a quick, efficient process that works for both taxpayers and the IRS.