Electronic Filing Improvement and Logistical Efficiency Act of 2025
Summary
The Electronic Filing Improvement and Logistical Efficiency Act of 2025 aims to modernize and streamline the electronic filing process for employment taxes. It mandates the IRS to create a fully automated electronic system for all employment tax filings and payments, including amended returns, within one year of enactment. The act also introduces a tax credit for employers who switch to electronic filing and imposes a user fee for paper filings to incentivize electronic adoption.
Expected Effects
The act will likely lead to increased efficiency and reduced administrative burden for both businesses and the IRS. It will also likely reduce errors associated with manual paper filing. The tax credit and user fee are designed to encourage a shift toward electronic filing, potentially impacting businesses that currently rely on paper-based systems.
Potential Benefits
- Reduced administrative burden for businesses through streamlined electronic filing.
- Financial incentives for employers adopting electronic filing.
- Increased efficiency and accuracy in tax processing by the IRS.
- Potential cost savings for both businesses and the government due to reduced paper usage and manual processing.
- Modernization of the tax system to align with current technological capabilities.
Potential Disadvantages
- Potential financial burden on businesses that are slow to adopt electronic filing due to the user fee for paper filings.
- Possible challenges for employers in rural areas or those with limited access to broadband internet.
- Risk of increased cybersecurity threats and data breaches associated with electronic filing.
- Potential for errors or complications during the initial implementation phase of the new electronic system.
- The user fee could disproportionately affect small businesses or those with limited resources.
Constitutional Alignment
The act aligns with the Constitution's Article I, Section 8, which grants Congress the power to lay and collect taxes. By improving the efficiency of tax collection through electronic filing, the act supports this constitutional mandate. The act does not appear to infringe upon any individual rights or liberties protected by the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).