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FACT SHEET: IRS Launches Simple Notice Initiative

January 23, 2024 / Source: Treasury

Around 170 million notices sent to individual taxpayers annually 

The IRS sends around 170 million notices to individual taxpayers every year to help them claim the credits and deductions they are eligible for and meet their tax obligations. These notices are often long—with extraneous inserts—and difficult for taxpayers to understand. They are filled with complex legal jargon. And they do not clearly and concisely communicate the next steps a taxpayer must take.

As part of ongoing modernization efforts made possible by the Inflation Reduction Act, the IRS is launching the Simple Notice Initiative to review, redesign, and deploy hundreds of notices, with an immediate focus on the most common notices that individual taxpayers receive.

This initiative builds on the Paperless Processing initiative announced in August 2023 to advance the goal of providing world-class customer service to taxpayers. With these initiatives, taxpayers have the option to go paperless and conveniently submit necessary responses online, and taxpayers will receive clearer and more concise notices from the IRS, so they better understand the actions they need to take.

FILING SEASON 2024: IRS REVIEWED, REDESIGNED, AND DEPLOYED 31 NOTICES

  • During the last year, the IRS reviewed, redesigned, and deployed 31 notices in time for this year’s tax season. The IRS sent around 20 million of these notices in the 2022 calendar year.
  • These include notices to taxpayers who served in combat zones that may be eligible for tax deferment, notices that remind a taxpayer that they may have unfiled returns, and notices that remind a taxpayer about their balance due and where they can go for assistance.

FILING SEASON 2025: IRS WILL REVIEW, REDESIGN, AND DEPLOY THE MOST COMMON NOTICES SENT TO INDIVIDUAL TAXPAYERS 

  • By Filing Season 2025, the IRS will review, redesign, and deploy the most common notices that individual taxpayers receive. The IRS will focus on up to 200 notices that make up about 90% of total notice volume sent to individual taxpayers. This represents about 150 million notices sent to individual taxpayers in 2022.
  • These include notices to propose adjustments to a taxpayer’s income, payments, credits, and/or deductions, notices to correct mistakes on a taxpayer’s tax return, and notices to remind a taxpayer of taxes owed.
  • The IRS is actively engaging with taxpayers and the tax professional community to gather feedback on how these notices should be redesigned.

FILING SEASON 2026 AND BEYOND: IRS WILL REVIEW, REDESIGN AND DEPLOY NOTICES SENT TO BUSINESSES TAXPAYERS AS WELL AS LESS COMMON NOTICES SENT TO INDIVIDUAL TAXPAYERS 

  • The IRS sends more than 40 million notices to business taxpayers every year. In future filing seasons, the IRS will review, redesign, and deploy notices sent to business taxpayers.
  • The IRS will also review, redesign and deploy less common notices sent to individual taxpayers. Additional detail on the plan to redesign these notices will be shared in future updates.

RECENT NOTICE PILOT SHOWS HOW REDESIGNED NOTICES IMPROVE TAXPAYER EXPERIENCE, WHILE REDUCING CALL VOLUME 

The IRS is committed to delivering a better taxpayer experience through notices, over the phone, online and in-person. While taxpayers will always have the option to call, the IRS also wants to make it easier for taxpayers to resolve issues without having to pick up the phone. Plain language notices can help the IRS achieve this goal.

For example, the IRS recently conducted a pilot that sent redesigned versions of Notice 5071C to a subset of taxpayers. The Notice 5071C asks taxpayers to verify their identity and tax return online or over the phone to prevent the processing of fraudulent tax returns. As part of the redesign, the IRS shortened the 5071C notice from seven pages to two pages. The IRS improved readability of the notice by updating the font and adding visual enhancements such as headers, icons, and step-by-step instructions. The IRS also clarified instructions and added a QR code that directs taxpayers to the IRS webpage where they can respond to the notice online instead of responding over the phone. See below for an overview of improvements that were made.

Graphical user interface, text, application, Word Description automatically generated

The IRS sent the redesigned Notice 5071C to 60,000 taxpayers. Compared to taxpayers who received the original notice, there was a 16% reduction in taxpayers who called the IRS as their first action, and a 6% increase in taxpayers who used the online option. The IRS will apply lessons learned from this pilot, among others, to the Simple Notice Initiative. These changes to this notice will be put in place during coming months.

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