George Washington University School of Business alumnus Harrison Smith is spearheading an initiative to help the Internal Revenue Service dramatically reduce its reliance on paper.
Under the Inflation Reduction Act, which was passed into law last summer, the IRS is receiving funding to undertake the big goal of processing all tax returns digitally by 2025.
Smith, M.B.A. ‘03, is the director of Enterprise Digitalization at the IRS. His team focuses on innovation and modernization efforts that will help improve the taxpayer experience.
“The IRS manages thousands of forms that support a wide variety of taxpayer and business needs,” Smith said. “The digital intake initiative began with a goal to review a very complex activity of accepting paper returns and improving the IRS' process to digitize them.”
The IRS started the process toward all-digital in 2022, beginning with scanning about 3,500 simpler forms. “We purposefully started small and pursued multiple pathways to determine the best way to securely scan and ingest paper tax returns into a digital format. Once we verified our approach worked while securing taxpayer information, we moved on to a larger number of forms and more complicated forms,” Smith said.
Through September of this year, Smith’s team has digitized over 700,000 forms.
“Our approach enabled us to wildly increase the number of forms scanned,” Smith said. “It's a dramatic increase over the past 12 to 18 months and something that my team is very proud of supporting for the IRS.”
There are benefits to taxpayers and the IRS that will stem from this work, Smith said.
The paperless processing initiative is projected to cut tax return processing times in half and expedite tax refunds by several weeks. The IRS is also digitizing millions of old documents that has the potential to save around $40 million in yearly storage costs.
“At the end of the day, this initiative not only reduces paper but it also allows us to process returns faster and provides access to information to support the taxpayer if they need to contact us,” Smith said. “In addition, it supports compliance efforts to make sure taxpayers are appropriately satisfying their tax requirements. .”
While it’s been a challenging process, Smith credits the progress this project has made to his hardworking team.
“I have the honor and privilege to support 24 professionals,” Smith said. “They work very, very hard to support the IRS and the federal government. It is a genuine honor to try to help them complete their tasks and to help the IRS. They are an incredible set of individuals from different backgrounds, different agencies and a different number of years of experience. But they have been successful in this work over the past three years. It is frankly astounding. And it's very humbling to support them.”
Smith said one of the things he valued most about his education at GW was the emphasis on including diverse voices and learning how to be part of a team. While he was pursuing his MBA, he learned a lot from his cohort.
“We had a tight-knit group,” Smith said. “The ability to sit down and talk with people from different backgrounds, of different ages, from different walks of life, from different career paths, it really does reinforce how much you can learn from other people.”
He said getting to hear different voices and perspectives made his education at GW all the more impactful.
One lesson that stuck with Smith from his time at GW was an activity one of his professors conducted that modeled game theory. The objective was to work together so everyone could win, or participants could game the system to win at everyone else’s expense.
“It was designed around reinforcing the fact that in many systems you can have groups of people and groups of interests work together to get better outcomes for everyone,” Smith said.
He said he’s carried that lesson all these years later into his career.
“That's something 20 years later that has stuck with me,” Smith said. “Especially working within the federal government space, we need to make the systems function efficiently so that it can benefit as many people as possible.”
