This year’s official tax filing deadline, which was delayed until April 18th in observance of a little-known Washington DC area holiday, has come and gone.

Of course, Californians have been granted a slight reprieve. To help residents still reeling from a slew of destructive winter storms, the deadline in 50 counties impacted by severe weather has been pushed back until October 15th.

But for most folks, tax season is over. And while next year’s filing is the last thing anyone wants to contemplate at the moment, IRS Commissioner, Daniel Werfel, appeared before the Senate last week to discuss changes the agency soon plans to implement.

But in the wide-ranging session’s highlight – which covered everything from auditing practices to income inequality – Werfel unveiled three ways in which the IRS is striving to make income tax filing easier and more friendly for taxpayers in the coming year.

So, what changes is the IRS unleashing in the 2023 tax year?

Stronger Customer Service

First and foremost, Werfel stressed an increased effort to provide vastly improved customer service. In particular, Werfel pointed to building capacity for better responsiveness on the phone and in person, greater enforcement against very wealthy tax cheats to close the tax gap, and modernizing the IRS’s technology.

A key modernization measure includes reducing the agency’s paper backlog by digitizing both archived and new tax filings.

Werfel indicated that a significant portion of the IRS’s recent $80 billion budget allocation would be dedicated to achieving these goals.

Clarity on Tax Refund Tax Expectations

State issues stimulus payments and rebates, along with broader changes in the tax code enacted over the past year, have left many taxpayers wondering: “Why do I owe this year?” and “Why is my refund lower?”

Many taxpayers were unsure whether state-level stimulus packages and tax rebates had to be reported on federal income tax returns. And the considerable guidance published on the subject was conflicting. Werfel pledged to resolve this confusion and define a specific protocol for reporting state-level contributions next year.

Additionally, many taxpayers received smaller-than-expected tax refunds and, in some cases, actually owed taxes. This is due in part to the government taking fewer taxes out of paychecks – a factor that roughly four in five taxpayers didn’t adjust their withholdings to reflect. Largely because they were unaware of the changes.

Here again, Werfel promised better education and more transparency for taxpayers as they navigate the implications of the ever-changing tax code.

Free Tax Prep From The IRS

The IRS offers a free tax filing program to help process and submit tax filings without seeking outside help. Very few taxpayers have made use of the service, the mechanics of which Werfel acknowledges “needs to be improved.”

There is some political infighting on the issue, with the expected dissent between members of different political parties over the scope and handling of such services.

$15 million from the Inflation Reduction Act was allocated to study the issue, and a report on the subject is set for publication in May. Meanwhile, Werfel vowed he would return following the report’s release to discuss proposed changes.

Questions About Your Tax Filing?

Have you filed an extension, or are your taking advantage of the filing delay afforded to many California residents?

If so, and you still have questions about your 2022 income tax filing, get in touch for a FREE consultation!