The American Institute of CPAs (AICPA) has submitted a formal recommendation urging the Internal Revenue Service to build an automated, electronic system for taxpayers and tax professionals to update names and mailing addresses. Under current IRS procedures, updates rely heavily on paper processing or changes submitted during annual tax returns, which frequently leads to processing backlogs. The AICPA warned that these delays generate compliance risks and unnecessary expenses across the tax ecosystem.
According to practitioner feedback cited in the AICPA letter, routine requests to update taxpayer contact or identity details currently take six to eight weeks or longer to process. During these prolonged waiting periods, critical IRS notices, tax correspondence, and refund checks are often mailed to outdated addresses. For businesses and individual taxpayers, failing to receive official IRS notices promptly can trigger severe administrative consequences, including lost appeal rights, additional interest and penalties, and escalated collection activity.
The processing lag affects a broad spectrum of taxpayers, including business owners, individual taxpayers, and real estate investors operating through legal entities. Name changes currently require signed letters and supporting documentation, while address changes rely on paper forms submitted by mail or notifications on annual returns. Between tax filing seasons, reliance on paper processing creates operational disruptions involving payroll providers, financial institutions, and commercial vendors that require consistent tax documentation.
To resolve these bottlenecks, the AICPA recommends allowing authorized practitioners and taxpayers to submit updates directly through their IRS online accounts and receive immediate confirmation. Under the proposed model, the IRS would automatically verify routine requests using external reference data, such as state business registration databases and the United States Postal Service change-of-address database. Requests that pass automated verification would update immediately, while submissions presenting fraud risks or failing automated checks would be routed for manual review.
The advocacy group also recommends implementing electronic status tracking similar to the system currently available for IRS installment agreements. Taxpayers and tax professionals could track whether a submitted request is pending review, approved, rejected, or requiring supplementary verification. The AICPA emphasized that transitioning account maintenance to automated self-service tools would reduce compliance costs and allow the agency to redirect operational resources toward higher-priority tax administration issues.
While this proposal represents a clear call from tax professionals for administrative reform, any transition to an automated system remains an AICPA recommendation rather than official IRS policy. For now, taxpayers and business owners undergoing address or name changes must continue to anticipate paper processing timelines, retain copies of all change requests sent to the IRS, and regularly monitor their IRS online accounts to ensure official correspondence is not overlooked.
Source: Journal of Accountancy
