IRS has started simplifying millions of complicated taxpayer notices ahead of the filing season

Personal finance

U.S. Treasury Secretary Janet Yellen speaks at the International Brotherhood of Electrical Workers 357 union hall in Las Vegas on Aug. 14, 2023.
Ronda Churchill | Bloomberg | Getty Images

With the opening of tax season only days away, the IRS has unveiled a plan to simplify the millions of complicated notices sent to taxpayers every year.

As part of the agency’s multibillion-dollar modernization efforts, the IRS has started to review and redesign hundreds of IRS notices — such as letters about unfiled returns, taxes owed or filing errors — aiming to help resolve issues faster and boost compliance.

“Redesigned notices will be shorter, clearer and easier to understand,” Treasury Secretary Janet Yellen said during a press call Tuesday. “Taxpayers will see the difference when they open the mail and when they log into their online accounts.”

Known as the “Simple Notice Initiative,” the program will eventually cover the roughly 170 million notices sent to taxpayers every year, according to the IRS.

The IRS has already redesigned 31 notices ahead of the 2024 filing season. Roughly 20 million revised notices were sent during the 2022 calendar year, it reports. The agency aims to “review, redesign, and deploy” the majority of IRS letters received by taxpayers by 2025.

The program builds on the agency’s paperless processing initiative announced in August, which now allows taxpayers to respond to IRS notices online.

“The next step is to make these notices easily understandable,” Yellen said.

IRS notices need ‘plain language’

“We need to put more of these letters into plain language, something an average person can understand without needing to hire a tax or legal professional,” IRS Commissioner Danny Werfel said during the Tuesday press call. 

He said clearer notices can “create a ripple effect” by reducing phone calls and in-person visits and freeing up staff to assist other taxpayers.  

While the agency has dramatically improved taxpayer service since the pandemic, there is still room for improvement, according to the National Taxpayer Advocate’s annual report to Congress released earlier in January.

Werfel said clearer notices will also improve taxpayer compliance and bring in uncollected tax revenue by helping filers better understand how much they owe.

The Simple Notice Initiative comes amid continued scrutiny of the IRS and billions of dollars of funding approved by Congress over the next decade. Part of the enhanced budget was already rescinded during spending negotiations in 2023.

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