The tax overhaul passed last year could lead to big increase in questions to service providers such as the Fort Lauderdale accountants of Sterling Accounting. It’s also expected to fuel a jump in work for the IRS, and the tax agency is spending heavily to cope with all that extra work.
The Wall Street Journal reports that the IRS plans to spend $291 million upgrading 140 computer systems to implement the new tax law passed in December. According to the Journal:
Those information-technology costs and other back-office operations will consume more than 90% of the money Congress is giving the IRS for implementation. The IRS is also bracing for a 17% increase in phone calls, planning to revise 450 forms and publications and organizing 40,000 hours of training, according to the document.
Earlier this year, Congress reserved $320 million of the IRS’s $11.4 billion budget for implementing the tax law. Without that boost, total funding would have gone down, continuing a trend since Republicans won the House in 2010 that has caused the tax agency to shed employees and reduce the frequency of audits.
New tax law or not, the IRS certainly seems to be in desperate need of computer upgrades. The situation has been so bad that the agency had to extend the deadline for tax returns earlier this year because of a computer crash.
The IRS computer system meltdown that halted the processing of millions of returns came after years of warnings from top IRS officials, federal auditors and tax professionals that the agency’s IT system is outdated and needs much more than patchwork repairs.
With the upgrades under way, we can hope that the IRS will be ready to handle the increased workload of a new tax regime.
The Fort Lauderdale accountants of Sterling Accounting are certainly prepared to help you navigate all your tax needs.