The time to file income taxes has arrived.

It is estimated that over 160 million federal tax returns will be filed for the 2024 tax year. Most individuals are expected to submit their returns by the standard deadline of April 15, although extensions to October 15 are available if they file Form 4868 with the IRS by that date.

The IRS announced that this tax season will bring many improvements and new features made possible by a $79 billion increase in funding from Congress over the next decade. Enhancements include easier access to tax account information via voice and text virtual assistants, the ability to access a wider range of tax forms through mobile devices, and better scam alerts.

However, the Taxpayer Advocate Service, which oversees functions within the IRS, has highlighted some ongoing challenges that could lead to confusion, delays in refunds, and other issues for taxpayers. In a recent report to Congress, they raised several significant concerns impacting individual taxpayers:

Issues in IRS Processing of Tax Returns

While the IRS typically processes returns in a timely manner, issues do arise. These include slow processing of paper returns, the rejection of some electronically filed submissions, difficulties in fixing errors after filing, and sluggish processing of amended returns, as noted by the Taxpayer Advocate Service.

Additionally, taxpayers might face issues accessing their IRS online accounts if they have one and may receive confusing letters and notices. Although the IRS has hired over 10,000 additional employees to assist in processing, there is still a need for better technology improvements, as reported by the watchdog group.

The IRS has increased hours and services at Taxpayer Assistance Centers, which has been positively received by the watchdog agency. These centers provide opportunities for in-person assistance.

Fraudulent Tax-Related Activities and Scams

Scams remain prevalent and are becoming increasingly sophisticated, with no immediate solutions on the horizon, according to the advocate service. Criminals have developed more advanced techniques, and the IRS often takes a long time to resolve identity theft issues, with some cases taking an average of 22 months to close.

The IRS considers this issue a high priority but must navigate new, more complex schemes, such as AI-assisted fake phone messages. Older adults are particularly vulnerable, as they tend to be more trusting and have more financial assets at stake. The process for reporting scams to the IRS can also be confusing, according to the watchdog group.

Common tax-related scams may involve phony demands for payment of alleged back taxes or persuading individuals to seek supposed unclaimed credits or disaster relief assistance. Scammers often reach out to potential victims unsolicited via phone calls.

The IRS maintains a list of common scams on its website. Some criminals may even attempt to file tax returns using stolen personal information to claim refunds fraudulently.

To reduce your risk of falling victim to scams, it is advisable to file your return as early as possible.

Promoting Financial Literacy Among Taxpayers

The Taxpayer Advocate Service has also pointed out the generally low public awareness surrounding taxes and financial matters. A lack of understanding can lead to mistakes, with individuals mistakenly claiming ineligible deductions and credits while overlooking benefits they might qualify for. The advocate highlighted that many taxpayers struggle with basic tax concepts, such as how tax brackets function and the differences between credits and deductions.

Although improving financial literacy is not solely the IRS’s job, the watchdog agency encouraged the IRS to enhance its efforts in this area. Given that the tax code exceeds 4 million words, accomplishing this is certainly a challenge.

New IRS Tax Filing Programs and Features are Just the Start

One of the new features includes the expanded Direct File service, which is now accessible to taxpayers in 25 states. This service allows individuals to submit their returns directly through irs.gov. Direct File is compatible with smartphones, laptops, tablets, and desktop computers, guiding users through a series of questions to help them prepare their federal returns step-by-step.

Additionally, there is IRS Free File, which utilizes software from partner companies but is only available through irs.gov. Eight companies are offering guided assistance for taxpayers with adjusted gross incomes of $84,000 or less for the 2024 tax year.

IRS Commissioner Danny Werfel mentioned in an early January statement, prior to his resignation announcement on January 21, “We are in a historic period of improvement for the IRS, and individuals will see more tools and features this tax season to assist them in filing.” He emphasized that the improvements made thus far are crucial, but they are just the tip of the iceberg regarding what the IRS needs to accomplish.

Other no-cost options for filing tax returns, suitable for many taxpayers, include the VITA (Volunteer Income Tax Assistance) program and AARP Tax-Aide.

For more information about enhancements this tax season, visit the IRS website.

Contact the writer at russ.wiles@arizonarepublic.com.