IRS Points to Progress for 2017 Tax Filing Season

The 2017 tax filing season presented the fewest wrinkles of any of the four administered by Internal Revenue Commissioner John Koskinen, an IRS official told a House Ways and Means oversight subcommittee on Wednesday.

“The smooth operation of the filing season is not automatic or accidental; it has been made possible because of the hard work and dedication of the IRS workforce,” said Kirsten Wielobob, deputy commissioner for services and enforcement. “We implemented changes enacted in 2015 under the Protecting Americans from Tax Hikes (PATH) Act, we improved taxpayer assistance and we continued increasing our efforts to protect taxpayer information.”

The PATH Act’s altered timing of steps to verify income data from W-2 forms allowed the IRS to hold off on some refunds and better spot “incorrect or fraudulent returns,” she said.

As of Wednesday, according to the IRS website, the agency had received 135,638,000 individual returns, a slight drop from last year. It handed out $268 billion in refunds (averaging $2,763), up 1.9 percent over the 2016 filing season. The number of taxpayers who self-prepared their returns was roughly stable at 51,763,000, versus 70,401,000 this year who used paid preparers. Despite IRS campaigns to encourage online queries, IRS website usage actually dropped by 4.1 percent to 312,255,666 visits over last year’s tally.

Telephone wait times and levels of service to live callers “improved in the 2017 filing season,” Jessica Lucas-Judy, acting director for strategic issues for the Government Accountability Office, told the panel. “Average wait time decreased from 9.7 to 6.8 minutes compared to last year, and telephone level of service was more than 77 percent compared to 74 percent. Further, IRS reduced the number of written correspondence that is late, or ‘overage,’ compared to prior years.”

The agency did experience two power outages that caused minor delays, Lucas-Judy added.

Still hanging over the IRS, however, is the shadow of identity theft using such programs as the earned income tax credit. “Some process improvements are needed,” said Michael McKenney, deputy inspector general for audit at the Treasury Inspector General for Tax Administration. 

“Taxpayer accounts were not always consistently updated to ensure that [identity protection personal identification numbers] were generated for taxpayers as required,” he said. “For example, the IRS did not generate IP PINs for more than 2 million taxpayers for whom the IRS resolved an identity-theft case by confirming that the taxpayer was a victim. This results from inconsistent processes and procedures when closing resolved identity-theft cases.”

TIGTA plans next month to release an audit assessing the IRS’ actions to notify victims of identity theft and to notify the Social Security Administration so that their benefits are not claimed by imposters.