Your future tax refunds could come a lot sooner. Here’s why

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The IRS announced this week it's launching a major effort to overhaul its outdated paper systems, which could lead to millions of Americans receiving their refunds a lot faster in coming years, the agency says.

WHAT TAXPAYERS SEND IN:?

• The agency’s “Paperless Processing Initiative” aims to cut down on mountains of paper documents the IRS receives annually.
• By next year’s filing season, taxpayers will be able to digitally file all non-tax forms and responses to notices. Taxpayers use non-tax forms for things like identity theft or to verify that they’re eligible for certain credits. The most used forms will be available in mobile-friendly formats to make them easier to submit. All told, the change will allow 125 million documents currently sent on paper each year to instead be submitted online, the IRS says.
• Taxpayers will also be able to e-file 20 additional tax forms, enabling up to four million more tax documents to be filed online.
• Those who prefer to mail in paper returns and correspondence will still be able to do so.

HOW THE IRS HANDLES PAPER DOCUMENTS:

• The majority of Americans file their returns electronically, but millions still send in paper returns. That clogs processing because the IRS currently can’t digitize those returns.
• The IRS is moving to digitize all paper-filed tax returns by 2025, affecting up to 76 million returns and forms. That should help the IRS eliminate errors from manual input, cut processing times in half and get refunds out four weeks sooner.
• The agency also intends to digitally process half of all other paper documents by 2025, and every document by the following year.
• The IRS says up to 1 billion historical documents will be digitized, giving taxpayers access to their data and saving about $40 million in storage costs annually.

WHO'S PAYING FOR IT:

• The agency’s modernization effort stems from nearly $80 billion in funding that Democrats in Congress approved last year as part of the Inflation Reduction Act. This has already allowed the IRS to hire 5,000 new agents, improve its telephone customer service and increase audits of higher-income Americans.
• But the funding is not guaranteed. House Republicans successfully pushed to reduce it by more than $20 billion as part of the debt ceiling package agreed to in June.

Do you know anyone who still files paper tax returns? Have the IRS' slow, outdated systems ever given you headaches? Share your taxpayer war stories in the comments.?

Here are some other stories we're following today:

Former President Donald Trump will appear in a Washington, DC courthouse this afternoon, his first hearing on four federal criminal charges brought this week over his efforts to overturn his 2020 election loss. Federal prosecutors, led by Special Counsel Jack Smith, accuse Trump and six unindicted co-conspirators of orchestrating a plot to keep Trump in power (you can read an annotated version of the indictment here). Trump, who denies wrongdoing, is expected to speak to reporters after the hearing. Follow CNN's live updates on the historic proceeding happening now.

Here’s what to know about the bigger picture surrounding the former president:

• Today marks Trump’s third arrest in four months. You can use this CNN interactive for an easy breakdown of all the legal cases and investigations swirling around him.
• A brand new CNN poll finds the number of Republicans who think the 2020 election was not legit is actually growing. Nearly 7 out of 10 Republicans and Republican-leaners say that’s the case, up from 63% over the past year. Trump remains the runaway front-runner for the Republican nomination for next year’s presidential election.
• The same CNN poll suggests headwinds for Pres. Biden in his reelection bid. Half of Americans think the US economy is getting worse, despite months of surprisingly positive economic news, including on inflation and jobs. Biden’s approval rating is 41% in the new poll, but ticks down to 37% on his handling of the economy.

Speaking of the economy, add Warren Buffett to the list of Wall Street experts downplaying Fitch Ratings’ historic downgrade of US credit. The “Oracle of Omaha” says his firm Berkshire Hathaway will buy $10 billion in US Treasuries next week, just as it has done for the last two weeks, according to an interview today. Fitch knocked US credit from its top AAA grade to AA+ on Tuesday, but Buffett’s comments suggest he doesn’t think it’ll make a significant ding in the economy.

The US credit downgrade is having an immediate impact on mortgage rates, according to Freddie Mac's chief economist. Rates for 30-year fixed-rate mortgages averaged 6.90% for the week ending today, according to Freddie Mac. That's a far cry from the 4.99% rate a year ago. Freddie and Fannie Mae guarantee about 70% of US mortgages. If employment and inflation pick up steam, mortgage rates are likely to go higher, an analyst with Realtor.com says.

Saudi Arabia is extending a cut in its oil production through at least September, according to state media reports. The voluntary production cut of a million barrels a day was announced in June. Global production cuts are among the drivers of US gas prices, which have spiked nearly 30 cents in the past month.

Bud Light's transgender controversy has cost its parent company about $395 million in lost North American sales. The former No. 1 US beer faced a public relations crisis after briefly sponsoring a transgender influencer, leading to right-wing media and anti-transgender commentators calling for a boycott of the brand. Then LGBTQ advocates criticized the beverage giant for failing to stand by the influencer and support the trans community. AB InBev, the world's largest brewer, says US revenue fell 10% in the second quarter as Bud Light sales slumped. The CEO says the company's US team is “working hard to build it back & to earn back consumers.”

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