IRS Said to Need Additional $1B to Implement New Tax Law

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The deadline to file individual income tax returns with the state is May 15. "It cannot answer the phone calls it now receives, much less the phone calls it can expect to receive in light of tax reform, without adequate funding".

According to the plea agreement, John's motive was to build and maintain a reputation for getting large refunds to increase his client base, which would generate more fees. As the agency processes millions of 2017 tax returns, it will simultaneously have to interpret and implement a new system for 2017.

The Senate's FY 2018 Financial Services spending bill would provide $11 billion for the IRS.

Many software companies and tax professionals will be accepting tax returns before January 29 and then will submit the returns when IRS systems open. In some cases, Olson wrote, the IRS paid commissions to agencies for payments that were attributable to the IRS itself and not the agencies.

Although Olson said the impact of the new law was still being calculated, preliminary estimates said the IRS would need an additional $495 million both this year and next in order to implement the sweeping changes.

The Internal Revenue Service announced today that the nation's tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain credits that refunds won't be available before late February. Some issues have already arisen, such as taxpayers trying to prepay property taxes before December 31 so it would not be subject to a new $10,000 cap on the deduction.

Despite the pointed failure of similar efforts in the past, Congress passed a law in 2015 requiring the IRS to use outside contractors to make a dent in the $138 billion that taxpayers owe the government.

But that does not mean the IRS has a year to get up to speed.