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Could there be a delayed start to the 2019 tax season?

The answer is possibly. The Tax Cuts and Jobs Act passed late in 2017 requires creating or revising hundreds of forms, publications and instructions.

The Treasury Inspector General for Tax Administration (TIGTA) wanted to gauge the Information Technology organization’s progress to modify around 140 technology systems. It found missed deadlines and apparent staffing shortages that could impact the 2019 tax filing season.

Extended deadlines allow less time for systems testing

In a normal year, Information Technology sets a January 31 deadline for product and service requests related to business unit needs for the next filing season. This year after business units missed the deadline the organization extended it out to June 1, 2018 for final work requests and business requirements.

As of early July, requests were still coming in. This reduces the amount of time available to modify and test systems. This could cause delay.

The other concern is that the Service has not been able to hire enough people to get all the necessary work completed.

Staffing shortages

To implement the tax reform package, the IRS needed to be able to quickly move to hire employees and contractors. TIGTA estimated it would take 1.1 million labor hours or about 542 full-time equivalents.

The lengthy hiring process to bring on employees or contractors has been a problem. While the IRS plan was to use existing and new employees, as of June, it had 117 current and new employees assigned to meet these needs.

The Service may be less likely to pursue audits or other tax matters that it does not believe it can win as resources are stretched thin. If you receive a letter from the IRS, it is all the more important to treat it seriously.

The TIGTA report was informational and did not come with recommendations. It does include some indications that the 2019 Tax Season could have some bumps even it does kick off on time.

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