Shorter, clearer letters to reduce taxpayer confusion; about 170 million notices are sent to individual taxpayers annually
The Internal Revenue Service (IRS) has initiated the Simple Notice Initiative, a comprehensive project to simplify and clarify the approximately 170 million letters sent to taxpayers annually. As part of the broader transformation funded by the Inflation Reduction Act, this initiative builds upon redesigned notice efforts from the 2024 tax season and successful pilots involving identity theft letters.
The Simple Notice Initiative targets the most common notices received by individual taxpayers, beginning an accelerated redesign during the 2025 and 2026 filing seasons. The goal is to enhance clarity and conciseness in these communications, starting with individual taxpayers and extending to businesses.
IRS Commissioner Danny Werfel emphasized that simplifying and clarifying these letters will ease understanding for taxpayers, reducing queries and enhancing the overall experience for taxpayers, tax professionals, and the IRS. This initiative aligns with the IRS’s broader efforts, including the Paperless Processing initiative introduced in August 2023, allowing taxpayers to go paperless and submit responses online for a more convenient experience.
During Filing Season 2024, the IRS reviewed and redesigned 31 notices, addressing various issues such as tax deferment for combat zone service and reminders for unfiled returns or balances due.
Looking ahead to Filing Season 2025, the IRS plans to review and redesign up to 200 of the most common notices sent to individual taxpayers, comprising about 90% of the total notice volume for individuals. This involves engaging with taxpayers and the tax professional community for valuable feedback.
Beyond Filing Season 2026, the IRS will extend its notice review and redesign efforts to business taxpayers, covering over 40 million notices annually. The aim is to enhance communication clarity for businesses and taxpayers receiving less common notices.
A recent pilot project involving the redesigned Notice 5071C showcased significant improvements. The notice, aimed at identity verification, was shortened from seven to two pages, with enhanced readability through updated fonts, headers, icons, and step-by-step instructions. The inclusion of a QR code directed taxpayers to an online response option, resulting in a 16% reduction in initial calls to the IRS and a 6% increase in the use of the online option.
These changes reflect the IRS’s commitment to delivering a better taxpayer experience, reducing call volumes, and promoting efficient issue resolution through plain language notices. Lessons learned from pilots, including the Notice 5071C redesign, will guide the implementation of these improvements in the coming months. Stay tuned for further updates as the IRS continues its efforts to enhance taxpayer communications and experiences.
