Tax Insights

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2019 Tax season concerns, tax reform impact

IRS, tax reform, tax seasonIn case you haven’t heard it enough, there have been a ton of changes in the tax world recently. With the Tax Cuts and Jobs Act (TCJA) of 2018 being the first major tax reform in over 30 years, there is an estimate of about 450 forms, publications and instructions that need to be revised or updated, as well as 140 information technology systems that need to be updated. The worry here is – will the IRS be ready for all these changes? The Treasury Inspector General for Tax Administration (TIGTA) came out with a new report that pointed out some major concerns thanks to tax reform.

The IRS Information Technology organization has a normal deadline of January 31 for all business units requesting IT products and services for the following filing season. With the passage of TCJA in December, the IRS IT organization attempted to set up deadlines to ensure timely implementation of any changes that needed to be made; however, these deadlines weren’t met. The IRS IT organization then set a new deadline of June 1, 2018 for submission of requests for business requirements and modifications, but apparently as of July 5, 2018, these still weren’t done. Delays in submission of all these requests means less time for testing of the new changes made in systems, which could result in a delayed start of the 2019 filing season for the 2018 tax year.

2018 year-end tax planning strategies

Another major concern mentioned in the TIGTA report was that the IRS needs to fill numerous employee positions that were recently vacated. Their hiring process can be lengthy, so with all these new changes, will all employees, including current and new, be trained and ready for these changes?

In response to the report, the IRS chief information officer said the IT organization is committed to providing modifications needed in order to have a successful tax season. Overall, she said that they had all these concerns and issues under control. But she didn’t say necessarily how everything would be taken care of, so is this true or just political talk? I guess only time will tell the extent of the impact from tax reform.

Christine Sanchez