Yuma Sun

IRS head sees huge task to administer new tax law


WASHINGTON — The acting head of the IRS says the current tax-filing season has gone well, while acknowledg­ing the tough challenge the cash-strapped agency faces of administer­ing the new tax law that will affect 2019 returns.

Acting IRS Commission­er David Kautter told Congress Thursday that some 79 million refunds totaling about $226 billion have been issued as of April 6, averaging $2,900 — up $13 from last year. Around 80 percent of returns filed claimed a refund.

The agency’s so-called level of service for taxpayers calling for informatio­n is running close to 80 percent. That’s the number of toll-free callers who either talk to an IRS customer service rep or receive automated messages with tax informatio­n, divided by the total number of attempted calls.

The final year under the “old” tax regime, 2017, has to be accounted for by taxpayers in returns by Tuesday.

The agency, pummeled for years by criticism from congressio­nal Republican­s and funding cuts, now must administer and enforce the most sweeping overhaul of the U.S. tax code in three decades.

Kautter told the Senate Finance Committee that the new law “requires extensive work by the IRS this year and next.” The paperwork alone is immense: about 450 forms and instructio­ns will have to be amended.

Sen. Orrin Hatch, RUtah, the panel’s chairman, said the new burden falls on an agency with a history of mismanagem­ent and taxpayer abuse that is laboring under funding and technology deficits.

“On the one hand, the IRS has made marked improvemen­ts in recent years,” Hatch said. “But, on the other hand, it is an agency stuck in the past. It relies on software and core processing systems designed during the Kennedy administra­tion. IRS employees routinely have to manually input return informatio­n into agency computers, and often require taxpayers to send informatio­n via fax machine.”

The massive Republican tax-cut legislatio­n was muscled through Congress late last year and now stands as President Donald Trump’s marquee achievemen­t. It took effect Jan. 1, billed as a huge boon for the stressed middle class and a key GOP selling point in the midterm elections this year. The $1.5 trillion package provides generous tax cuts for corporatio­ns and the wealthiest Americans, and more modest reductions for middle- and low-income individual­s and families.

The tax cuts for corporatio­ns are permanent, while those for individual­s and families expire in 2026. Nonpartisa­n tax experts project that the law will bring lower taxes for the great majority of Americans, though not all.

Already taxpayers have seen a tangible result of the new tax law. Millions of working Americans saw bigger paychecks starting early in the year. Companies and payroll service providers — and their computer systems — had to adjust to new withholdin­g tables crafted by the IRS to reflect changes in tax rates for different income levels under the new law.

The tax bill or refunds for the changes won’t come in until 2019.

For this filing season, “I haven’t heard about any disasters,” says Howard Gleckman, senior fellow at the Urban Institute. And he gives the IRS credit for doing a good job this season of keeping up with scams.

 ??  ??
 ??  ??
 ??  ??

Newspapers in English

Newspapers from United States