Internal Revenue Service Commissioner John Koskinen wants to get his agency to a point where Americans can make all their tax transactions online — a process he hopes will be as simple as online banking.
But the IRS has a long way to go, particularly when its commissioner said Tuesday that it’s still running some applications from when President John F. Kennedy was in office.
Koskinen told the Senate Finance Committee that the agency hit the ground running on Jan. 20 with the start of the 2015 tax filing season. Already, the agency has received 16 million tax returns and has received more than 8 million hits on its popular “Where’s my Refund?” application.
“Opening the current filing season on schedule was a major accomplishment, given the challenges that we faced,” Koskinen said. “Along with normal filing season preparations, there were significant challenges and extra work to get ready for the tax changes related to the Affordable Care Act and the Foreign Account Tax Compliance Act. We also had to update our systems to reflect the tax extender legislation passed in December.”
“The level of funding would provide substantial support for our mission and help the agency move ahead in a number of critical areas,” Koskinen said, adding that the IRS could raise its phone service level to nearly 80 percent.
Currently, about 50 percent of callers to the IRS do not get through to a live operator.
“These funding cuts are so significant that efficiency alone cannot make up the difference,” Koskinen said. “We’ve reached the point of having to make very critical performance trade-offs.”
When asked by ranking member Sen. Ron Wyden (D-Ore.) about a delay in sending out new tax identification numbers to victims of identity theft, Koskinen said the agency has been relying on antiquated IT systems.
“We’re running applications we were running when John F. Kennedy was president,” Koskinen. Some of its systems still use the COBOL programing language, which has fallen out of favor with modern technology.
The IRS reports that nearly $400 billion in taxes go unpaid every year. Wyden said simplifying the tax code would keep corporations from exploiting loopholes.
“That’s the tax gap — one of its biggest causes is the dishonesty of tax cheats and scammers who avoid paying what they owe,” he said.
Calling on Congress to give IRS additional tools to fight earned income tax credit fraud, Koskinen said if the IRS had correctable error authority, the agency could correct errors in returns without conducting a complete audit.
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