IRS announces start date for tax filing season

The IRS expects the 2025 tax filing season, which will open Jan. 27, to build on the success of the two previous seasons, provided Congress allocates the promised funding, Commissioner Danny Werfel said Friday.

Over 140 million individual tax returns for tax year 2024 are expected to be filed by the April 15 deadline.

The Inflation Reduction Act of 2022, P.L. 117-169, allocated $80 billion over 10 years to the IRS, in addition to its base funding. That allocation was reduced to $60 billion over 10 years in the Further Consolidated Appropriations Act of 2024, P.L. 118-47, which Congress passed in March 2024.

The 2024 law also provided $12.3 billion as a base budget for fiscal year 2024, the same as in fiscal year 2023.

The IRS lost another $20 billion in December 2024 when Congress approved a continuing resolution that carried forward policies from the previous fiscal year.

“The decision about whether to adequately fund the agency comes down to a fundamental choice — whether or not we can and should have an IRS that you can easily interact with to meet your tax responsibilities, that can quickly and effectively address tax scams that exploit normal population,  and that can deliver updated IT infrastructure and modern technology platforms capable of supporting our work to modernize the agency,” Werfel said Friday in a call with reporters.

Among the improvements cited by the IRS are:

• Direct File, which allows eligible taxpayers to file their taxes directly with the IRS for free, has expanded to 13 new states from last year, for a total of 25. Direct File, which opens Jan. 27, also will cover more tax situations than it did in its pilot program, Meanwhile, the IRS’s Free File program, which provides access to free software tools offered by IRS partners and is available to taxpayers with an adjusted gross income of $84,000 or less in 2024, opened Friday.

• Individual online accounts have more functionality and include a banner alerting taxpayers to potential scams.

• Another 84 redesigned notices are scheduled to be deployed in 2025, adding to the 200 redesigned notices that went out in 2024.

• Voicebot services available to taxpayers in English and Spanish.

Most tax refunds are issued in 21 days, and one of the IRS’s most popular online tools is Where’s My Refund, where taxpayers can get details about their taxes within 24 hours of filing electronically, Werfel said.

“Taxpayers will see a continuing improvement in 2025 and beyond, brick by brick, or online tool by online tool,” Werfel said. “We are building a modern interface with taxpayers and tax professionals. We are moving steadily to accelerate these technology advancements for the benefit of everyone. These efforts are all about making the process of filing taxes easier and less stressful for taxpayers and also making it more cost efficient.”

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.