How The New Tax Bill Will Affect IRS Employees

Passage of the tax overhaul means a lot more work for the IRS, which after years of budget and staff cuts, along with creaky computer systems has had issues just keeping up with the current work load.

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Republicans say this tax bill will create jobs. One place we know it's going to create a lot of work is the IRS. The bill contains hundreds of pages of changes to the tax code, and the IRS has to figure out how to interpret and implement them at a time when it's strapped for cash and workers. NPR's Brian Naylor reports.

BRIAN NAYLOR, BYLINE: The Trump administration is promising that most taxpayers will notice a difference in their paystubs early next year. Here's Treasury Secretary Steven Mnuchin on CBS's "Face The Nation."

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STEVEN MNUCHIN: We're already working at the IRS to update the tax forms and update the tax charts, and they're going to see this in their paychecks in February.

NAYLOR: It sounds relatively simple to change withholding tables. Just plug some new numbers into the computer. But former IRS commissioner John Koskinen says even simple changes are complex thanks to Kennedy-era computer programs the agency uses.

JOHN KOSKINEN: For the IRS, providing new forms is often a challenge because a lot of our forums are hard-coded. So you don't just enter a little thing in your computer. You actually have to go into the code and change the date or change the forms.

NAYLOR: Making the job more difficult, since 2010, the IRS's budget has been slashed by $900 million, resulting in 21,000 fewer employees. Koskinen, an Obama appointee who stepped down from the agency just last month, worries the IRS could find itself in a disastrous spiral.

KOSKINEN: My concern has been that if the budget continues to be cut - and that's what the House and Senate are proposing to do even with this massive tax overhaul. If you continue to cut the budget, you're actually at some point going to make the IRS dysfunctional.

NAYLOR: The last time a major tax overhaul was approved in 1986, Congress actually appropriated more money for the IRS to hire additional personnel. This time the president and House and Senate leaders have all proposed deeper cuts in the agency's budget. Tony Reardon heads up the National Treasury Employees Union, which represents IRS employees.

TONY REARDON: Congress is adding massive, massive new responsibilities to the IRS and expecting them to handle it with less money and even fewer employees.

NAYLOR: He says that makes for a very difficult situation for the agency and for its employees and of course for taxpayers. One place where the lack of IRS personnel might be most apparent is the agency's taxpayer help line.

JENNIFER MACMILLAN: Yes (laughter). Yeah, it's going to be a nightmare.

NAYLOR: Jennifer MacMillan is with the National Association of Enrolled Agents, which represents tax preparers. She says the IRS couldn't keep up with all the calls from taxpayers seeking help with their returns last year. Many were kept waiting on hold for over an hour. Next year, MacMillan expects lots of confusion with the new law.

MACMILLAN: People are going to be calling them. Lots and lots of people are going to be calling not only to find out what the implications to them might be. I think a lot of people are going to be under the - you know, have a misunderstanding and think that it's going to affect their filing of 2017 tax returns.

NAYLOR: And that's important to note. Many taxpayers won't notice all the new changes until they go to file their 2018 taxes due in April 2019. Brian Naylor, NPR News, Washington.

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