Wang Solutions

The Tax Reform Bill Passed – Now What Happens at the IRS?

Signing a bill into law with a fancy pen is the easy part. The hard part is what follows: implementing that law efficiently and effectively. Such is the reality of the tax reform bill signed into law on Dec. 22 by President Trump.

As the agency clearly most impacted by the tax reform bill, the Internal Revenue Service will need more than a few upgrades to carry out the changes. This means things like new and improved computer systems, along with training for an expanded IRS workforce so that the agency can provide proper guidance to both tax professionals and taxpayers. Moreover, since support for the tax reform bill was garnered based on certain results claimed by its politician proponents, the agency needs to be able to enforce the law to make those claims come true.

Unfortunately, that’s not likely to happen if the IRS doesn’t receive additional funding. A former IRS commissioner, Lawrence B. Gibbs, explained that the agency won’t be able to “mount a sufficient compliance effort to make sure folks obey their tax obligations under this new law” unless the agency gets more funding. As we’ve seen in the past, the IRS’s service quality ebbs and flows with its available budget.

The problem is that Republicans in Congress have a history of voting to slash the IRS budget, and things don’t look like they’re going to be changing. While talk of the IRS’s fresh new needs has begun to crop up, the word from the House and Senate Appropriations Committees isn’t promising: they’ve proposed a IRS budget in FY 2018 of $120 million less than the FY 2016 funding level. And with those changes from the tax reform law waiting in the wings without any confirmed funding increases, things aren’t looking very bright for the IRS, taxpayers, and tax preparers.