Technologies That Could Transform the IRS Over the Course of the 2020s

The 2010s brought sweeping changes to every facet of technology — including taxation. These developments are only the beginning, however. We are on the cusp of a whole new era, in which emerging tech will transform how regularly people interact with the IRS.

Recently, the IRS revealed a renewed commitment to developing and implementing the advanced technology needed to improve everything from electronic filing to enforcement. Preliminary estimations indicate that this modernization effort will cost at least $2.3 billion and require six years to implement. By 2030, however, the average taxpayer will observe notable differences, including:

IRS Free File

One of the agency’s most significant developments is already underway: IRS Free File. This system allows taxpayers earning under $69,000 to complete their returns using cost-free tax preparation software. An online lookup tool can help taxpayers find not only free federal preparation services, but also free state returns.

Authentication Via Behavioral Analytics

Authentication is a huge concern for the IRS, which often struggles to confirm the identities of those accessing sensitive information. Advanced behavioral analytics solutions promise to improve the eAuthentication system, which currently exhibits several glaring deficiencies. A contract with digital identity firm BioCatch could offer a viable solution in the form of behavior metrics indicating everything from user pressure to left or right-handedness.

A Modernized Individual Master File

The IRS has promised a modernized approach to its long-standing Individual Master File (IMF) for years. Now, however, such developments are actually poised to take place — spurred, in part, by significant failures that occurred in 2018. The latest modernization efforts will assist in the transition from text-based legacy programming to JAVA and other current languages.

New technology could bring about greater vigilance from the IRS — so it’s important to get your affairs in order as soon as possible. The Highland Tax Group can help. Get in touch today to learn more about the many tax resolution services we provide.