TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, June 27, 2018

National Taxpayer Advocate Releases Mid-Year Report To Congress

TASIR-2018-143 (June 27, 2018), National Taxpayer Advocate Identifies Priority Areas in Mid-Year Report to Congress:

National Taxpayer Advocate Nina E. Olson today released her statutorily mandated mid-year report to Congress that presents a review of the 2018 filing season, identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the upcoming fiscal year and contains the IRS’s responses to each of the 100 administrative recommendations the Advocate made in her 2017 Annual Report to Congress.

The most significant challenge the IRS faces in the upcoming year is implementing the Tax Cuts and Jobs Act of 2017 (TCJA), which among other things requires programming an estimated 140 systems, writing or revising some 450 forms and publications and issuing guidance on dozens of TCJA provisions. Ms. Olson expresses confidence that the IRS will implement the law successfully. “Make no mistake about it. I have no doubt the IRS will deliver what it has been asked to do,” she writes in the preface to the report.

However, she reiterates her longstanding concern that IRS funding reductions have undermined the agency’s ability to provide high-quality taxpayer service and to modernize its aging information technology infrastructure. The report points out that IRS funding has been reduced by 20 percent since fiscal year (FY) 2010 on an inflation-adjusted basis. “Because of these reductions, the IRS doesn’t have enough employees to provide basic taxpayer service,” the report says. “The compliance and enforcement side of the house has been cut by even more. So in addition to answering the fewest number of taxpayer calls in recent memory, the IRS also has the lowest individual audit rate in memory (0.6 percent) and its collection actions are way down.” ...

In light of the Tax Cuts and Jobs Act, TAS has launched a new website, Tax Reform Changes, that lists key tax return items under current law (2017), shows which ones have been impacted by the TCJA and illustrates how the changes will be reflected on tax year 2018 returns filed in 2019. Taxpayers can navigate the website by viewing key tax return topics or seeing them illustrated on a 2017 Form 1040. The line-by-line explanations allow taxpayers to see how the new law may change their tax filings and to consider how to plan for these changes. The website will incorporate updated information as it becomes available.  Taxpayers and professionals can sign up to receive email notifications when updates occur. If a taxpayer determines the TCJA will impact his or her tax liability, he or she should make withholding adjustments by filing a new Form W-4, Employee’s Withholding Allowance Certificate, with employers.

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