Acting IRS Commissioner David Kautter told House lawmakers that taxpayers will not be penalized for the technical difficulties the IRS was having on Tax Day with its direct payment and e-filing systems. Kautter testified in a joint hearing on April 17 before the House Oversight Health Care, Benefits, and Administrative Rules and Government Operations Subcommittees. Kautter spoke with lawmakers about IRS operations and related challenges.

"A number of IRS systems are unavailable at the moment...we are working to resolve this issue," Kautter told lawmakers at the hearing. Reportedly, taxpayers trying to submit a payment from their bank accounts using the IRS's Direct Pay feature received a message saying the function was unavailable. Additionally, taxpayers trying to apply for a payment plan also received the error message. According to several reports, return filed through H&R Block and Turbo Tax also could not be submitted.

"Currently, certain IRS systems are experiencing technical difficulties. Taxpayers should continue filing their tax returns as they normally would," the IRS said in a statement sent to Wolters Kluwer on April 17.

Tax Reform

Kautter also told lawmakers during the hearing that new IRS forms related to tax reform are expected to be released by this summer. "Regarding our implementation activities, we are well on our way towards drafting all new or revised forms related to tax reform by the end of April, with early release of the draft forms and instructions for comment planned for the summer," Kautter testified. The new forms are subject to tax law changes under the Tax Cuts and Jobs Act (TCJA) enacted last December.

Likewise, Tax-Exempt and Government Entities Division Commissioner Sunita Lough, currently serving as the director of the IRS's Tax Reform Implementation Office (TRIO), said on April 17 that an early release of the new forms is expected by mid-summer. Lough, a bit more specific as to the timing of the new forms' release, testified separately on Tax Day in a House Small Business Subcommittee hearing.

Additionally, Lough told lawmakers that the IRS hopes to issue most TCJA-related guidance before next filing season. Kautter, however, has previously said he anticipates it will take a couple of years to complete guidance on the new tax law.

The IRS faces significant challenges with meeting the increased demand for guidance on the TCJA, according to the National Taxpayer Advocate Nina Olson. "Implementing TCJA will be a major effort for the IRS in Fiscal Years (FYs) 2018 and 2019," Olson testified in the House Oversight Subcommittees hearing. "The IRS plans to create or revise about 450 forms, instructions and publications, which is twice the number in a normal year," she added. According to Olson, the IRS needs to ensure it achieves a proper balance between providing guidance quickly and incorporating stakeholders' comments and concerns in the final rules.

Tax Law Questions

Kautter told lawmakers that after this year's filing season, the IRS's tax law question phone line will remain active past the tax return filing due date. According to Olson, the tax law question line is currently discontinued each year the day after returns are due. "Senior IRS officials have informed me they will maintain a dedicated phone line for tax law questions related to tax reform after this filing season, but it is unclear the scope and depth of assistance that will be available," Olson included in her written testimony.

Olson suggested that the IRS answer a wide range of tax law and TCJA questions by phone and in person all year long. In addition to the challenges taxpayers face with not being able to ask the IRS tax law questions after the official filing season has ended, they are also limited in the depth of assistance they can receive, according to Olson.

Beginning in 2014, the IRS announced it would only answer "basic" questions during the filing season, thus substantially restricting the scope of tax law questions it would answer, Olson said. "Because of the new restrictions, some taxpayers have simply stopped calling," she added.

IRS Reform

In related news, seven bills that are included as part of a bipartisan IRS reform package were scheduled for a House floor vote on April 17. The package of bills was approved by the House Ways and Means Committee last week. Two larger IRS reform bills, the 21st Century IRS Bill (HR 5445) and the Taxpayer First Bill (HR 5444), are scheduled for a House floor vote on April 18.

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