Overview

• Treasury Secretary Janet Yellen criticized a Republican proposal to cut $14 billion from the IRS budget to fund aid for Israel, labeling the plan as 'damaging and irresponsible'. Independent analysts also criticise the move, warning it could potentially lead to billions in uncollected tax revenues.
• Despite recent funding cuts, the IRS used its $80 billion funding from Democrats’ Inflation Reduction Act to make significant improvements. Notably, taxpayers can now submit all tax-related documents digitally, reducing processing times as well as saving the agency millions in document storage costs.
• According to Yellen, taxpayers can begin submitting their documents now, months ahead of the initially planned schedule. By 2024, most people will be able to submit everything except tax returns digitally, which will be possible from 2025 after the successful completion of the IRS's new electronic free file tax return system pilot.
• Yellen also highlighted improved customer service at the IRS, including reducing call wait times, upgrading the IRS website, and expanding in-person customer support.
• Despite these advancements, the IRS remains vulnerable to funding cuts. Earlier in the year, Republicans successfully rescinded $1.4 billion from the agency in exchange for lifting the nation's statutory debt ceiling.