OPINION:
Tax season is upon us and millions of American taxpayers and businesses are compiling sensitive personal information to submit to the IRS … via fax.
You heard that right. Fax.
In an age where cars drive themselves, a 3D printer can create a human heart and a photo of your breakfast can be shared halfway across the world in an instant, small businesses must still submit their tax forms to the IRS on paper.
Once ubiquitous across corporate America, the fax machine has suffered the same fate as the Walkman and big hair. But not at the IRS. It’s still going strong like it’s 1985.
While we can joke about the absurdity of this situation, the uncertainty, frustration and security risks this continued reliance on antiquated technology continues to pose to America’s small businesses is no laughing matter.
That’s why we’re leading the charge to push the IRS to invest in a modern, electronic-based filing system and an online portal to track returns. Main Street — the backbone of our economy — deserves it.
Small businesses dutifully do their part and fax their returns on time and in full, with no choice but to accept the obvious security risks. But then, to add insult to injury, the filing sits. And sits. And sits some more, somewhere in untrackable IRS purgatory.
When the IRS finally gets around to their returns, the agency uses an optical reader to scan the return into their system. The problem? The scanner can’t transcribe the return into an IRS form. So, an IRS agent must manually transcribe it into electronic form. As the delays grow, so do the security risks and room for error. In 2025, this is unacceptable.
On top of all that, there’s no tracking mechanism. For all a filer knows, the 100-page return they’ve submitted is lost in a ten-foot-high stack of other filings or erroneously placed in the recycle bin. Worse, it could be in the hands of a bad actor because of the lack of secure submission and handling.
On the surface, it’s unfair to businesses that did their part. At its core, it’s an embarrassment that the government of the world’s technology leader puts honest taxpayers in this precarious position, year in, year out.
We encourage and support the Trump administration in its efforts to improve efficiencies at the highest levels of government. If it’s looking for a shining example of government inefficiency, look no further than the IRS’ continued reliance on the fax machine.
Washington should utilize the very best of American innovation and technology to modernize this system, allow more secure and trackable transmissions and bring the IRS into the 21st century. Let’s digitize and use computer-based filing systems to streamline operations at an agency that is stuck in the mud.
These avoidable processing delays were a major contributor to the well-chronicled backlog of the plagued Employee Retention Credit. It allowed malicious actors to further saddle the already-overwhelmed agency with an avalanche of fraudulent claims. As a result, thousands of small businesses had their legitimate claims tossed to the wayside as the IRS threw its hands up in defeat. One example of an avoidable disaster brought on by inefficiency.
We’re far from the first to call for IRS modernization. But we’re joined by a growing group of bipartisan federal lawmakers who recognize the dangers of technological inaction.
Rep. Max Miller (R-OH) hit the nail on the head during a recent House Ways and Means subcommittee hearing on IRS modernization: Taxpayers deserve an agency that keeps up with the times and acts as a responsible fiduciary of Americans’ money.
Let’s get out of the 1980s and allow small businesses to focus on their mission and what they do best. They’d spend fewer hours and less money searching for answers and the IRS will be less flooded with calls from concerned filers. It’s a win-win.
We hope Congress will soon require the IRS to make changes so small business eligibility for payroll tax credits is determined quickly, payment is made in a timely manner and visibility into the process is significantly improved.
Let’s make this tax season the last time American businesses have to submit their taxes through an outdated, unsecure and untrackable system.
Retire the fax machine. And retire it now.
• Casey Clark is the president and CEO of the National Association of Professional Employer Organizations.
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