information return

Last year, the Internal Revenue Service (IRS) launched a multi-year modernization plan to strengthen cybersecurity protections and improve how the agency engages with taxpayers. Through the IRS Modernization Plan, the federal agency will focus on advancing technology systems and building critical infrastructure for the country’s tax system. Included in the plan is an effort to update systems that process information returns, which are used for tax verification and reporting transactions to the IRS.  The Information Returns Processing (IRP) environment processes information returns filed by third parties like employers, financial institutions, educational institutions and other government agencies. The current system uses an intake system through paper or electronic submission, validates data and then updates accounts for compliance and analytics. The IRP environment works but is no longer able to accommodate new requirements. The new modernization effort is needed because old systems are unable to handle a series of legislative mandates such as the Affordable Care Act and Tax Reform Act. The Information Returns Program Development (IRPD) aims to address this re-engineering challenge with seven objectives: Create a modern and flexible solution for acceptance, validation, perfection, management, and use of Information Returns Data. Replace aging systems with modern, adaptive, and sustainable technologies. Use Information Returns Data to support enhanced compliance processes. Consolidate, standardize and simplify Intake and Validation systems for Information Returns. Establish a new design for IR Processing to support new types of Information Returns. Improve data access and data integration for downstream systems. Develop a foundation for streamlining operations.  In addition to seeing updates in how information returns are filed, we’ll also see emerging priorities and advances across the system under the four Modernization …

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