3 IT Upgrades for Powerful Digital Transformation in the IRS

By Susheel John, V.P. – Marketing & Strategy, ibml

Digital innovations have accelerated over the last few years, and many organizations are reaping the benefits. Tools such as machine learning and AI, for instance, are helping organizations quickly and effectively scan and process information in order to make informed and intelligent decisions. And the US government has taken notice. 

The US government has pledged $80B over the next decade to improve IRS services, with emphasis placed on bolstering the agency workforce. And it couldn’t come at a better time. The number of IRS employees has halved in the last 30 years, and the agency needs the support of digital transformation that makes up for that kind of loss.

Here is how we believe the IRS and agencies like it could make a few IT upgrades to improve functionality and efficacy. 

  1. Transform the physical into digital

Intelligent document processing is perhaps the most apparent update the IRS (and any other company handling massive amounts of paperwork) could make to its systems. Roughly 17 million paper returns were filed in 2022, adding to the existing backlog and resulting in processing delays of 10 months or more. Expediting this process is going to take more than just manpower. Intelligent document processing solutions significantly reduce the amount of manual labor devoted to processing physical paperwork. Intelligent digitization tools that can sort, structure, and centralize form data make it easier to develop powerful analytical insights, which can lead to process improvements. Especially with the M-19-21 deadlines around the corner and NARA’s requirements for FADGI 3star images, the first step of this process starts with ensuring a modernized and centralized mailroom that can take advantage of intelligent scanners like ibml FUSiON to automate mailroom digitization—then powering it with IDP software technologies to automate the data extraction from it. 

Centralizing data sources can make it easier to integrate applications and departments so that they can communicate and collaborate seamlessly. Effective digitization would create a one-stop shop for all customer data, increasing efficiency by reducing the time spent tracking down necessary contextual information. Additionally, this transparency promotes cross-functional collaboration, leading to improved business outcomes, innovation, and agility – the goal of any IT modernization project. 

  1. Utilize top-tier AI 

Machine learning and artificial intelligence algorithms are only as useful as the technology that powers them. Case in point: though the agency introduced chatbots and other web-based self-service tools in 2022, 167 million phone calls were placed to the agency in the 2021 tax filing season. This volume of phone calls demonstrates a further need for better digital systems to support already over-extended staff. Using some of their new budget to modernize data management and sharing systems can create useful algorithms that use natural language processing to improve the efficacy of chatbots and other AI-powered tools.

Well-trained chatbots can reduce repetitive work by fielding simple, common customer inquiries and reduce hold times by quickly routing calls. Effective chatbots save customer service reps’ time on escalated calls because they gather identifying and preliminary data for the human representative, allowing them to serve customers more efficiently and decreasing the need for customers to repeat themselves to a person when they’ve already spoken to a robot. 

  1. Adopting Cloud-Based Technology and Its Benefits 

All of these improvements rely on organizational departments having a clear path to communication and collaboration. With the rise and advancement of digital systems over the last few years, it’s time to update applications. 

Cloud-based technology can help secure access from anywhere, enabling better collaboration and scaling performance as needed during peak tax seasons. According to the IRS’s 2021 IT Annual Key Insights Report, it implemented a new cloud-based way for taxpayers to submit documentation online to resolve specific tax issues—helping to relieve some of the paper backlog. The report also notes success in migrating IRS-developed apps from on-prem to cloud-based tech. 

Some of the IRS’s goals for better cloud integration include the ongoing modernization of IT operations, improving the taxpayer experience, and increasing cybersecurity and data protection. IDP technology on the cloud will be a great addition to the tech stack at IRS for extracting valuable information from unstructured documents irrespective of its paper or electronic origins. 

As organizations grow, so should the complexity of their supporting systems. There is no one quick fix that will modernize an enterprise—change requires a combination of new processes, better resources, and broader perspectives. For organizations looking to maximize their ROI, breaking silos and integrating effective automation can be the starting point toward a better, more profitable future.

Susheel John

Susheel John is the VP of marketing and strategy for ibml. He has over 25 years of global experience in the intelligent information capture solution industry. Prior to joining ibml in 2018, he spent 22 years at Kodak-Alaris and Kodak Ltd as Managing Director of Asia Pacific Region and leading Product Management.Susheel has worked with a diverse client base spread across multiple countries globally and built strong businesses in his career. His diverse experiences have help build an immense wealth of knowledge in solving customer problems relative to information capture. Susheel is a thought leader and speaker at industry events.  Susheel is a self-motivated senior executive with demonstrated success in both tactical and strategic roles. He is passionate about building successful, sustainable, and profitable businesses. 

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