Tax Reform Guidance Will Take Years, IRS Chief Says

Acting IRS Commissioner David Kautter told lawmakers on April 11 that implementing tax reform is one of the IRS’s highest priorities, but issuing guidance will likely take years. “Preliminary efforts to implement this new law are already underway,” Kautter said during a House Appropriations Financial Services Subcommittee hearing. The Tax Cuts and Jobs Act (TCJA) (P.L. 115-97) was enacted last December.

Kautter testified before the committee on the IRS’s budget and current operations. Kautter discussed the IRS’s creation of the Tax Reform Implementation Office (TRIO). TRIO is run by IRS senior leadership. Kautter said at a recent tax-related event that TRIO is the IRS’s “tax reform linchpin,” (TAXDAY, 2018/03/28, I.8).

Tax Reform Guidance

Completing guidance on the new law will take the IRS years, according to Kautter. “It will take us a couple of years, at least, to get guidance out on the entire bill,” Kautter told appropriators

Kautter highlighted guidance already issued on the new law that addresses amended Code Sec. 965 and the new Code Sec. 1446(f). “Additional published guidance on the new tax law will be provided as the IRS continues to analyze the law and its impact on tax administration,” Kautter testified.

Additionally, Kautter listed the tasks IRS must complete to implement tax reform. These include “re-programming approximately 140 interrelated return processing systems in conjunction with creating or revising approximately 450 tax forms, publications and instructions; publishing guidance, notices, and Frequently Asked Questions (FAQ); preparing the IRS workforce to help taxpayers understand how the new law applies to them; and importantly, providing taxpayer assistance and outreach,” Kautter said.

IRS Reform

Meanwhile, House tax writers in the Ways and Means Committee the same day approved a bipartisan package of IRS reform bills on April 11 (TAXDAY, 2018/04/12, C.1). The House is expected to schedule a floor vote sometime next week on the first measure in 20 years to redesign the IRS.

By Jessica Jeane, Wolters Kluwer News Staff

Written Testimony of David J. Kautter Acting Commissioner Internal Revenue Service before the House Appropriations Committee Subcommittee on Financial Services and General Government on IRS Budget and Current Operations April 11, 2018
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