Executive Summary
The Inflation Reduction Act (IRA) has provided much-needed funding to the Internal Revenue Service (IRS) to update and modernize its online tools, significantly improving taxpayer services. The IRS has launched new fully electronic processes and systems to facilitate taxpayers’ access to clean energy credits, a move that has resulted in time and cost savings. This article delves into the specifics of these changes and looks at the IRS’s ongoing commitment to leveraging technology for better taxpayer service.
Revolutionizing Taxpayer Service with the Inflation Reduction Act: A Look into the IRS’s Modernization Efforts
Since the enactment of the Inflation Reduction Act (IRA), the Internal Revenue Service (IRS) has successfully utilized the increased funding to revolutionize its services, making tax compliance easier and more efficient for taxpayers. The focus has been on modernizing online tools, particularly for those wishing to claim clean energy credits.
One of the notable advancements is the introduction of the IRS Energy Credits Online (IRS ECO), a secure, user-friendly, and free electronic service that has brought significant improvements to the taxpayer service. No special software is required to access IRS ECO, meaning it is accessible for both small and large businesses. This platform enables taxpayers to provide information for filing purposes and incorporates validation checks and risk mitigation measures. It also allows real-time monitoring of key metrics, including identification of customer service enhancements and fraudulent activity.
The IRS ECO has made it possible for qualified manufacturers to submit eligible clean vehicle VINs and sellers and dealers to register their businesses and complete time of sale reports entirely online. It also facilitates the transfer of clean vehicle credits and enables advance payments to dealers and sellers.
The Inflation Reduction Act, in conjunction with the Creating Helpful Incentives to Produce Semiconductors Act (CHIPS), allows taxpayers to leverage certain manufacturing investment, clean energy investment, and production tax credits. The IRS ECO has been built with flexibility to evolve according to taxpayers’ needs, with plans for home energy credits in the pipeline.
In addition to the IRS ECO, the IRS, in partnership with the Department of the Treasury and the Department of Energy (DOE), has developed a streamlined digital application process for the Qualifying Advanced Energy Project Credit and the Wind and Solar Low-Income Communities Bonus Credit programs. This collaboration has resulted in a user-friendly online portal, simplifying the submission and review processes and bolstering communication between taxpayers, DOE, and the IRS.
For over 100 years, Packer Thomas has served generations of business owners, families, and others with tax, auditing, accounting, and information technology services. But we didn’t last that long by standing still. We’ve evolved to meet the needs of our clients who are also facing challenging changes in their financial, tax, and information technology environments.
