The new Initiative, made possible by President Biden’s Inflation Reduction Act, helps Americans meet their tax obligations claim benefits for which they are eligible
Notices and notifications issued by mail or through online accounts remain one of the most critical methods the Internal Revenue Service (IRS) has for engaging taxpayers. Thanks to funding from President Biden’s Inflation Reduction Act (IRA), the IRS is focused on improving communications with taxpayers by making IRS notices and letters easier to understand, while also providing online access to those who choose to engage with the IRS electronically. Simplifying notices makes it easier for taxpayers to understand tax laws while also helping taxpayers claim the benefits for which they are eligible.
Through the Simple Notice Initiative, which was announced in January 2024, the IRS has redesigned its letters and notices in the following ways:
- Leading with clear, action-oriented “headlines” which immediately inform recipients about the nature of the correspondence (e.g., “You may be eligible for a refund”);
- Breaking up lengthy paragraphs and shifting detailed language to IRS.gov;
- Attempting to reduce the number of complicated scenarios within a notice, which also improves the IRS’s ability to track the outcome of correspondence;
- Leveraging modern font choices, larger font sizes, and the appropriate use of blank space to improve readability;
- Embedding a QR code on front page that directs easily to online resources.
The letter, known as 5071C, demonstrates how the Simple Notice Initiative has improved the taxpayer experience. The letter asks taxpayers to verify their identity and tax return online or over the phone to prevent the processing of fraudulent tax returns. As part of the redesign, the IRS shortened the 5071C letter from seven pages to two pages. The IRS also improved readability of the notice by updating the font and adding visual enhancements such as headers, icons, and step-by-step instructions. The IRS clarified instructions and added a QR code that directs taxpayers to the IRS webpage where they can respond to the notice online instead of responding over the phone.
Compared to those who received the original notice, there was a 16 percent reduction in taxpayers who called the IRS as their first action, and a 6 percent increase in taxpayers who used the online option. By more clearly outlining online self-service ID verification options and reducing respondent confusion, the IRS estimates the use of the redesigned form reduced the average cost of the first interaction the taxpayer undertakes by approximately 15 percent, potentially representing millions of dollars in time saved by the agency as well as time saved by the individual recipients. Having digital versions of notices online will help taxpayers verify that the notice received is legitimate.
The IRS has been working to make notices available to taxpayers online, and, if a taxpayer response is needed, offer a seamless process to digitally respond back to the IRS. The IRS has reviewed and redesigned over 100 notices and is on track to meet its goal of capturing 90 percent of all notice volume for individual taxpayers by the end of this year.
Related Resources
Additional information and taxpayer resources can be found at IRS.gov and on the Treasury Department’s Taxpayer Resource Hub.