APA Day 4: IRS commissioner addresses attendees

Most employees file their W-4s when they’re first hired and then promptly forget about them. That might not be the best strategy right now, thanks to the Tax Cuts and Jobs Act, said Acting IRS Commissioner David Kautter.

Kautter’s address to attendees at the American Payroll Association 36th Annual Congress concentrated heavily on Payroll’s role in implementing tax reform. He also caught APA attendees up what to expect in the future.

Forms, pubs and other good stuff

The TCJA requires the IRS to update around 400 forms, instructions and publications. That’s more than double the usual work load, Kautter pointed out. All the forms have been drafted and should be released for public comment soon; revisions to the instructions should be done by the end of the month and let out for comment by July, he added.

Warning: These timelines remain fluid.

FLSA Compliance D

The 2019 W-4, however, isn’t scheduled for release until the end of the year, which is as soon as the IRS can manage it, according to Kautter. And he acknowledged that’s not ideal from a payroll perspective. What’s more, he said that the form will change. Even so, he said that employees will still not be required to refile their W-4s next year, although he strongly encouraged it.

Withholding calculator

No one, including the IRS, wants taxpayers to wake up to a surprise tax liability next winter. So Kautter also emphasized the key role the withholding calculator plays this year in accurately estimating one’s tax liability. He encouraged all taxpayers to use it.

As for withholding, the 2018 withholding tables work reasonably well for taxpayers with simple tax situations, he said. But everyone else should use the calculator, he added. Further, employees who deliberately have their wages overwithheld (a form of forced savings, he noted) should use the calculator.

Other TCJA stats

The TCJA has impacted the IRS’ 140 technology systems. Unlike the public perception of IRS hardware being stuck in the 1960s, Kautter stated that’s not true—the hardware is state-of-the art. The software, however, is stuck in the 1960s and the IRS is working hard to correct that, he added.

The IRS also got $379 million to implement the TCJA, $329 million of which has been received. This money is allocated accordingly:

  • 73% for technology
  • 19% for employee training and public outreach
  • 4% for forms, pubs and instructions
  • 4% for guidance.

Kautter’s goal is to make the 2019 filing season proceed as seamlessly as possible. And he was savvy enough to understand that Payroll plays a key part in this overall strategy. The IRS will continue its outreach to the Payroll community, Kautter said.