The Internal Revenue Service would be required to hire a chief information officer to overhaul its aging computer systems, under a bill passed last week by the House that’s expected to come before the Senate.
Lawmakers in the House voted overwhelmingly last Wednesday to approve a package of legislation to “redesign” the IRS, including improving the agency’s servers, some of which date back to the Kennedy administration (see House approves IRS reform bills). The need to modernize the IRS’s aging systems gained urgent attention when the tax-filing system crashed on the Tax Day deadline last week for around 11 hours (see IRS systems run into trouble as tax deadline looms, agency gives taxpayers an extra day to file).
One of the bills passed by the House last week was the 21st Century IRS Act, which would establish a CIO post at the agency. The IRS currently has a chief technology officer and two deputy CIOs, according to The Wall Street Journal's CIO Journal. The bill spells out the roles and responsibilities of the CIO. who would be responsible for the development, implementation and maintenance of information technology for the IRS, ensuring the IRS’s IT systems are secure and integrated, maintaining operational control of all IT systems for the IRS, being the principal advocate for the IT needs of the IRS, and consulting with the IRS’s chief procurement officer to ensure that the IT acquired for the agency is consistent with a multiyear strategic plan that the IRS would be required to develop.
The bill, which passed last week by a vote of 414 to 3, would also codify recent efforts of the IRS, through its Security Summit, to foster a partnership with public and private stakeholders to combat tax-related identity theft. It would also require the service to develop an internet portal that would facilitate taxpayers filing Forms 1099, which the IRS would phase in starting in 2020.
In addition, the bill would authorize the IRS to develop an automated system to request transcripts under the Income Verification Express Service system, while authorizing the agency to assess and collect a separate user fee over a two-year period on all IVES requests to pay for the system. The bill would also allow the IRS to directly accept credit and debit card payments for taxes, with any fee to be paid by the taxpayer. In addition, the bill would require the Treasury Department to work with private industry to find ways to use new payment platforms and increase the amount of tax refunds delivered electronically.
The bill also requires the Electronic Tax Administration Advisory Committee to make recommendations to prevent identity theft and refund fraud; authorizes the IRS to participate in an information-sharing and analysis center for identity theft tax refund fraud; and prohibits the disclosure of returns or return information to contractors or other agents for agencies that do not comply with confidentiality safeguards.
The IRS would be required to develop and implement online accounts to provide services to taxpayers and return preparers, along with a process for accepting electronic tax forms and supporting documents, an internet platform for Form 1099 filings, a fully automated program for disclosing taxpayer information for third-party income verification using the Internet, and uniform standards and procedures for the acceptance of electronic signatures.
The bill also would limit redisclosures and uses of tax return information by individuals designated by taxpayers to receive the information, and allow the IRS to require additional taxpayers to file returns electronically.
Other bills in the package approved by the House would require the IRS to develop a plan for overhauling the agency by September 2020, help taxpayers who have been the victims of identity theft, establish an independent appeals office at the IRS, limit the IRS's ability to seize assets from taxpayers, and codify the Volunteer Income Tax Assistance program.
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