Tags: internal revenue service | irs | more funding | reform

IRS Said to Need Additional $495M to Implement New Tax Law

IRS Said to Need Additional $495M to Implement New Tax Law
Internal Revenue Service (Kristoffer Tripplaar/AP)

By    |   Wednesday, 10 January 2018 03:39 PM

The Internal Revenue Service will need an additional $495 million over the next two years to implement the new GOP tax law passed last month, National Taxpayer Advocate Nina Olson wrote in her annual report to Congress released on Wednesday.

"The IRS absolutely needs more funding," Olson wrote. "It cannot answer the phone calls it currently receives, much less the phone calls it can expect to receive in light of tax reform, without adequate funding."

Although Olson said the impact of the new law was still being calculated, preliminary estimates said the IRS would need an additional $495 million both this year and next in order to implement the sweeping changes.

Additional funds are also required for programming and system updates, training employees, creating new tax forms, as well as for changing regulations and guidance, she said.

Olson noted that funding for the IRS has fallen since 2010 by about 20 percent, in inflation-adjusted terms, and these "cuts have rendered the IRS unable to provide acceptable levels of taxpayer service," adding that "'shortcuts' have become the norm and 'shortcuts' are incompatible with high-quality tax administration."

USA Today reported that last year's budget for the IRS budget was $11.2 billion, but that Congress still has not set funding levels for federal agencies, even though the current fiscal year began on Oct. 1.

Another reason additional funds are needed is that although the tax bill was originally promoted as a simplification of the code, new complications have been added in some cases, including exemptions for most refinancings of home mortgages and loans closed after Dec. 15 that had prior binding purchase contracts.

The IRS is also being urged to release new tables as soon as possible that determine how much tax must be withheld from workers' paychecks, because until those are provided to employers and payroll companies, those who are due to receive tax cuts won't see an increase in their take-home pay.

This story has been corrected to say the IRS says it needs $495 million total over two years. A previous version listed the figure as $495 million per year for a $1 billion total.

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The Internal Revenue Service will need an additional $495 million over the next two years to implement the new GOP tax law passed last month, National Taxpayer Advocate Nina Olson wrote in her annual report to Congress released on Wednesday.
internal revenue service, irs, more funding, reform
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2018-39-10
Wednesday, 10 January 2018 03:39 PM
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