By AJ Fabino
U.S. Treasury Secretary Janet Yellen commended an initiative this week by the IRS that is projected to dwindle the federal deficit by $2.6 trillion over the next decade.
The IRS’s transformative “paperless processing” program will alleviate the handling an annual influx of 200 million paper documents, CNBC reported Wednesday, and save an estimated $40 million in storage costs alone.
Yellen highlighted the digitization project as a vital cog in a much broader machinery aimed at improving overall system efficiencies, according to the report. Besides cutting down errors in tax processing, the new initiative will also ensure secure data access for taxpayers.
“I urge Congress to provide stable and sufficient annual appropriations for the IRS in order to sustain and build on this progress,” Yellen said.
Yellen also applauded the Biden administration’s measures in narrowing the tax gap, with the IRS shifting focus toward the recruitment of personnel to audit large corporations, complex business partnerships and high net worth individuals.
“Today’s announcement — and the other milestones that we’ve already reached — are a testament to what dedicated federal employees can do when they are provided the tools and resources to succeed,” said Yellen.
Reactions to the initiative didn’t stop with Yellen. “This is truly a game-changer for the IRS,” Eric Hylton, national director of compliance for Alliantgroup, and a former IRS commissioner, told CNBC. Hylton said the initiative will push the IRS forward, but emphasized the need for allocating more funds for improved technology to achieve its goals.
Charles Rettig, former IRS Commissioner and board member of K1X, applauded the processing initiative as a “win-win,” saying to CNBC that it will preserve “limited human resources,” freeing up IRS employees to focus on other service areas.
Peter Mills, senior manager for tax policy and advocacy with AICPA, expressed optimism about the initiative’s potential benefits. “We are optimistic that these steps will lead to reduced processing times and better experiences overall for taxpayers,” he said.
The federal deficit nearly tripled in the first 9 months of the fiscal year that raised concern about the country’s finances.
The budget gap from October to June was nearly $1.4 trillion, which was a 170% increase from the year before.
The increase in government spending had lead to the decrease in tax revenue.
“Unfortunately, interest is now the government’s fastest growing quote-unquote ‘program,’” said Michael Peterson, CEO of the Peter G. Peterson foundation, which promotes fiscal responsibility.
Produced in association with Benzinga