IRS Urged to Automate Name and Address Changes for Taxpayers

The American Institute of Certified Public Accountants (AICPA) is calling on the Internal Revenue Service (IRS) to automate the process for updating taxpayer names and addresses. According to the AICPA, current processing delays can lead to compliance problems and unnecessary costs for taxpayers.

In a letter to the IRS dated Monday, the AICPA highlighted the issue of lengthy processing times for name and address changes. Members report that these requests often take six to eight weeks or longer to process, despite being routine updates.

This delay can have significant consequences for taxpayers who do not receive IRS correspondence promptly. It may lead to additional penalties and interest, lost appeal rights, and escalated collection activity.

The AICPA recommends creating an automated electronic process allowing taxpayers and authorized practitioners to submit name and address change requests through their online accounts. This would provide immediate confirmation of the update and reduce processing times significantly.

Currently, taxpayers must submit paper forms for address changes and often need to provide signed letters and supporting documentation for name changes. The AICPA suggests that this method is outdated and inefficient.

The proposed automated system could verify routine requests using information from sources such as state business registration databases and the U.S. Postal Service’s change-of-address database. Requests that cannot be verified automatically or present fraud risks would be routed for manual review.

To further streamline the process, the AICPA recommends providing electronic status updates for requests similar to those available for installment agreements. This would allow taxpayers and practitioners to track whether their request is pending review, approved, rejected, or requires additional verification.

The AICPA believes that automating name and address changes would reduce compliance costs, minimize operational disruptions, and improve tax administration for both taxpayers and the IRS. By prioritizing this process, the IRS can dedicate its resources to higher-priority tax administration issues.

In their letter, the AICPA emphasized the importance of transforming the IRS’s technologies and taxpayer services to approximate comparable private-sector services. This would enable taxpayers and practitioners to resolve account issues in a timely and efficient manner.