Treasury Secretary Janet Yellen Applauds IRS Initiative to Reduce Federal Deficit

Treasury Secretary Janet Yellen has commended the Internal Revenue Service (IRS) for its new “paperless processing” program, a significant step towards reducing the federal deficit. This initiative is expected to save $2.6 trillion over the next 10 years, contributing to the Biden administration’s overall goal of $1 trillion in deficit reduction.

One of the key features of the IRS’s new program is the ability for taxpayers to submit their documents digitally, eliminating the need for paper forms. This transition will reduce the burden on both taxpayers and the agency itself. Currently, the IRS processes around 200 million paper documents annually, incurring approximately $40 million in storage costs. By allowing customers to submit digital files, the agency can streamline its operations and significantly reduce costs.

Secretary Yellen emphasized that the paperless processing program is not only a cost-saving measure but also a catalyst for additional enhancements to the IRS’s overall operations. The initiative paves the way for error reductions in tax processing and provides secure data access for taxpayers. By digitizing the document submission process, the agency can implement more efficient error detection mechanisms, leading to a higher level of accuracy in tax processing. Furthermore, this digital transformation enables taxpayers to access their own information securely, reducing the chances of data breaches and ensuring data privacy.

In her statement, Secretary Yellen called upon Congress to provide stable and sufficient annual appropriations for the IRS. This sustainable funding is crucial for the agency to build on its progress and continue implementing further improvements. The success of the paperless processing program and its associated benefits can only be sustained with adequate financial support from the government.

Secretary Yellen also commended the Biden administration’s commitment to narrowing the tax gap, which refers to the difference between the amount of taxes owed and the amount actually collected. Without intervention, the tax gap was projected to reach $7 trillion over the next decade. As part of its strategy, the IRS has focused on hiring personnel specialized in auditing large corporations, complex business partnerships, and high-income individuals. These audits require significantly more time and resources compared to simpler cases. However, they have proven to be effective, with the agency already recovering approximately $38 million from 175 delinquent tax cases involving millionaires.

Secretary Yellen expressed her satisfaction with the progress made by the IRS and its employees. She praised their dedication and highlighted the importance of providing them with the necessary tools and resources to succeed. The paperless processing program, along with other milestones already achieved, is a testament to the agency’s potential when empowered to operate at its full capacity.

The IRS’s new paperless processing program marks a significant step towards reducing the federal deficit. By enabling digital document submission, the agency can streamline operations, reduce costs, and pave the way for further improvements. With the support of Congress and the commitment of the Biden administration, the IRS is well-positioned to close the tax gap and continue making strides in fiscal responsibility.

Politics

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