Updates Lawmakers on 2018 Tax Filing Season, IRS Operations

CPA, Consulting, Payroll, Bookkeeping, Internal Controls, Houston, TX, The Woodlands, TXActing IRS Commissioner David Kautter on April 12 provided lawmakers with an update on the 2018 tax filing season and IRS operations. Kautter, testifying before the Senate Finance Committee (SFC), told lawmakers that the 2018 filing season has gone well with regard to tax return processing and IT systems operations.

2018 Tax Filing Season

“It is important to note that, although the tax filing deadline for individuals is only a few days away, the work of the filing season continues throughout the year, as IRS employees continue to process tax returns, including amended returns, and returns for which taxpayers had requested an extension beyond April 17,” Kautter said. The IRS, as of March 30, has already issued 73.3 million refunds for more than $212.3 billion, according to Kautter.

Tax Reform

Implementing tax reform “is one of the IRS’s highest priorities and will be a Service-wide effort for some time,” Kautter told lawmakers. The Tax Cuts and Jobs Act (TCJA) was enacted last December. Kautter, testifying on April 11 before the House Appropriations Financial Services Subcommittee, said that it will take the IRS at least a couple of years to issue guidance on the new law.

“There is rampant confusion about how the new tax law works — untested policies, sloppy legislative drafting, and outright mistakes in the law,” SFC ranking member Ron Wyden, D-Ore., said in his opening statement on April 12. Wyden criticized Republicans and the TCJA for creating taxpayer uncertainty and confusion.

The IRS listed 18 new guidance projects in its Priority Guidance Plan (PGP) released in February. “Much of the guidance we are developing will take time,” Kautter reiterated to lawmakers.

A top priority for issuing guidance concerns the corporate tax rate reduction to 21 percent, Kautter said. “We realize the need for guidance is especially acute for fiscal-year filers, so we are making that a priority,” Kautter added.

IRS Reform

SFC Chairman Orrin G. Hatch, R-Utah, having previously criticized the steady reduction in the IRS’s budget, again cautioned appropriators against limiting IRS funding. “When we drain the IRS of resources and handicap its ability to collect revenue, that isn’t merely a loss in revenue for the federal government, it also means that the Treasury must borrow more money, causing our country to go further into debt,” Hatch said in his opening statement.

Hatch also commented on the House Ways and Means Committee’s approval on April 11 of a bipartisan package of bills aimed to restructure the IRS for the first time in 20 years. “I am confident that we can find meaningful, bipartisan solutions that will help the IRS perform its duties while still remaining clearly under Congressional supervision,” Hatch said.