04/19/2018

House Passes Bills to Retool the IRS

Lawmakers remain focused on plans to improve the agency moving forward

On April 18, 2018, the House of Representatives passed bipartisan legislation to modernize the Internal Revenue Service (IRS) by improving the agency’s customer service and information technology (IT) systems.

The House votes came on Tax Day, the same day that the IRS experienced a widespread systems crash that prevented millions of taxpayers from filing last-minute returns. Because its systems were down for about 11 hours, the agency granted taxpayers an extra day to get their returns filed.

By its own admission, the IRS uses some software that dates to the Kennedy administration and some of its hardware is outdated by at least two or three upgrades. For years, IRS officials have warned that it needs more funding to upgrade the agency's IT systems but its budget has been cut by more than $900 million since 2010.

“While we don’t yet know what has caused this systems failure, the lack of Republican funding for the IRS to serve taxpayers will only compound the issue,” said Senate Finance Committee Ranking Member Ron Wyden (D-OR).

On Wednesday, lawmakers involved with a package of IRS reforms focused on plans to improve the agency moving forward. One of the IRS bills would establish an independent appeals office to resolve taxpayer disputes, and would require the IRS to submit a reorganization plan focused on customer service by Sept. 30, 2020. Another bill would update the agency’s cybersecurity and IT systems.

“With this package, we are taking a monumental step in redesigning the IRS for the first time in 20 years, refocusing the agency to live up to its mission of quality service and reining in its enforcement powers to prevent future abuse,” said House Ways and Means Committee Chairman Kevin Brady (R-TX).

Senate Finance Committee Chairman Orrin Hatch (R-UT) called the House package a “welcome step forward” but did not say if or when the Senate would take up the bills.

This article was provided to OSAE by the Power of A and ASAE's Inroads.