CCH Tax Day Report
IRS Commissioner John Koskinen expressed optimism for the Service’s funding in fiscal year (FY) 2018, saying he has had positive discussions with the new leadership at the Treasury and lawmakers. Koskinen also highlighted customer service, cybercrime and tax administration during an address at the National Press Club in Washington, D.C., on April 5.
The IRS received an additional $290 million in appropriations for 2016. “We used this funding to strengthen cybersecurity, increase our efforts against identity theft and improve taxpayer service,” Koskinen said. He highlighted improved customer service, particularly telephone assistance during the 2016 filing season. “For the average person, the improvement in service was especially noticeable on the phones,” he added. The IRS used some of the additional funding to hire 1,000 temporary employees to answer questions from callers, according to Koskinen.
Looking ahead, Koskinen said he has had good conversations with Treasury Secretary Steven Mnuchin about funding. “The Treasury Secretary, from the time of his confirmation hearing, has expressed surprise at the cuts the IRS has had.” In a budget outline unveiled in March, President Trump proposed to reduce the Service’s fiscal year (FY) 2018 by some $239 million (TAXDAY, 2017/03/17, W.1). At this time, the IRS, like many other federal agencies, is operating under a continuing funding resolution, which is scheduled to expire in mid-April.
Cybercrime and Identity Theft
Tax-related identity theft “overwhelmed” the IRS for a time, Koskinen said. “The problem of stolen personnel data being used to file fraudulent returns increased significantly from 2010 to 2012. Since then, we have been making steady progress against identity thieves.”
Curbing cybercrime accelerated in 2015, Koskinen added. The Service engaged with the tax practitioner and tax software community. “The Security Summit has been a model of collaboration between the public and private sectors. Working together we are able to put in place many new safeguards.” He noted that the number of individuals who reported being victims of identity theft has fallen 46 percent since 2015. “That is a stunning number,” he said. The IRS stopped $6.5 billion in fraudulent refunds last year, he added.
Taxpayers want to interact with the IRS online, as they do with other government services and private businesses, according to Koskinen. “We’ve added Direct Pay and other services because this is what people have told us they want.”
At the same time, some taxpayers prefer face-to-face contact. The IRS assisted some 4-million individuals at Taxpayer Assistance Centers (TACs) and demand is growing, Koskinen said. “The centers are a great example of how we are working to improve service for all taxpayers, not just those who go online.” The IRS now requires individuals to make appointments at TACs. “This year, we’ve had no reports of lines out the door.”
Staffing and Leadership
IRS staffing levels have dropped by more than 17,000 employees since 2010, Koskinen said. “That works out to a loss of around 50 employees every week, a pace that has continued now for 350 weeks, or seven years,” he noted.
Koskinen’s term as commissioner will end in November. “I have encouraged the administration to begin the search for a candidate to follow me as soon as possible,” he said. During brief remarks with reporters after his address, Koskinen predicted it would be better for the Service to have a new commissioner confirmed as quickly as possible, rather than having an interim commissioner.
In January, President Trump directed federal agencies to identify at least two existing regulations to be repealed when issuing a new regulation. In March, Koskinen indicated that certain “subregulatory” guidance could be outside the scope of the president’s executive order TAXDAY, 2017/03/23, I.1. These subregulatory items could include frequently asked questions (FAQs) posted on the IRS website, revenue procedures and certain announcements. Koskinen did not address the president’s executive order or the Service’s response during his remarks on April 5.
By George L. Yaksick, Jr., Wolters Kluwer News Staff
Prepared Remarks of John A. Koskinen Commissioner Internal Revenue Service Before the National Press Club