Challenges Predicted for the 2015 Tax Filing Season

Internal Revenue Service Commissioner, John Koskinen, and The National Taxpayer Advocate, Nina Olson, spoke to an audience of tax professionals at the AICPA National Tax Conference in Washington, DC on November 4, 2014. Both presented a dismal tax filing season for taxpayers seeking assistance and guidance from the IRS, including a prediction by Commissioner Koskinen of over 30 minute hold times for phone service. Among the reasons cited for the anticipated challenges this tax filing season:

1. The IRS budget has been cut drastically over the past several years and resources are stretched. A Senate proposal to increase the IRS budget by $240 million still would be 7% below 2010 funding levels, Commissioner Koskinen reported.

2. New laws requiring IRS implementation, such as the Affordable Care Act ("ACA") and the Foreign Account Tax Compliance Act ("FACTA"), require the IRS to divert resources from enforcement and taxpayer services. For the ACA, this is the first filing season in which two major provisions (the premium tax credit and the individual shared responsibility payment) will be reported on IRS Form 1040. The Taxpayer Advocate Olson is concerned that the receipt of accurate information from the health exchanges could delay and complicate this reporting. Additionally, The Taxpayer Advocate Olson is concerned that a new FACTA withholding requirement for 2014 may result in an issue with taxpayers receiving timely refunds.

3. Commissioner Koskinen reminded the audience that there are over 50 tax laws set to expire at the end of 2014. It remains to be seen whether Congress will extend some or all of those tax laws. If the uncertainty extends too far into December, then the start of the tax season could be delayed, which, in turn, would delay tax refunds.

The news to the AICPA National Tax Conference audience was not all bad. Commissioner Koskinen reported that taxpayers are increasingly using the IRS website to track refunds and make payments. The goal for Commissioner Koskinen, "some years from now," is to have a fully online, secure tax filing system for taxpayers including access to current and past tax filings and immediate IRS communication. Movement to an online system would help the IRS sustain itself without annual increases in the IRS budget.

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