The House moved Wednesday to force an overhaul on the IRS, voting to press the tax collection agency to become more customer-friendly — just a day after the agency suffered a deeply embarrassing computer outage on the day taxes were due.
The IRS said it got the systems up and running and employees worked through the night to deal with a backlog. But the agency still gave taxpayers an extra day to file, moving the deadline from midnight Tuesday to midnight Wednesday.
Lawmakers, though, said the poorly timed snafu on the agency’s busiest day of the year is all the more reason to force changes, updating the IRS’s aging infrastructure and making it easier for people to use online services.
“God indeed has a sense of humor, or a deep understanding of public policy,” said Rep. Patrick McHenry, North Carolina Republican. “That glitch at the IRS is just the public acknowledgment of the desperate need that we know this agency has to be modernized.”
Members of both parties overwhelmingly supported the bipartisan measures. A technology and cybersecurity-focused bill passed 414-3, and a bill that aims to improve taxpayer services, enforcement, and organization passed 414-0.
But Democrats said the agency will need more money in addition to the overhaul.
Rep. John Lewis, who helped craft part of the legislation along with GOP Rep. Lynn Jenkins, called the IRS’s Tuesday issues “unfortunate” and said the problems show lawmakers need to have an “honest talk” about the work ahead.
“I have said time and time again that you cannot get blood from a turnip,” said Mr. Lewis, Georgia Democrat. “I look forward to working with our colleagues to ensure the agency has the tools and resources it needs.”
Among other items, the package requires the IRS to develop a multiyear plan for information technology upgrades and submit comprehensive plans to Congress to improve its customer service strategy and cyber security efforts.
It also creates a new independent appeals process to streamline dispute resolutions, allows taxpayers easier access to nonprivileged parts of their case files, and requires the agency to give proper notice to taxpayers before they move to seize property.
The legislation also makes permanent the IRS’s “free file” program, a partnership with private tax-filing services that provides electronic filing services for people with low-to-moderate incomes.
A separate bill the House easily passed Wednesday directs the administration to submit reports to Congress on identity theft and IRS impersonation cases.
Acting IRS Commissioner David J. Kautter said earlier this month he thought the reforms were generally constructive, but that at a certain point the agency’s ability to function properly comes down to leadership and accountability.
As for the technical problems, the agency said Wednesday its processing systems were back up and running, saying only that the outage was caused by a “hardware issue.”
“The IRS appreciates the patience from taxpayers as well as the help and support of the nation’s tax professionals and software transmitters during this period,” Mr. Kautter said.
As of 9 a.m. Wednesday, the agency had accepted more than 14 million returns after the systems came back online Tuesday afternoon.
But Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, on Wednesday said lawmakers still didn’t know exactly what happened and reiterated that he thinks the issue was compounded by a lack of funding.
“I am definitely willing to look at the House bill with respect to individual reforms — I just don’t want anybody to think that something like that is going to be a substitute for dealing with inadequate funding,” Mr. Wyden said.
A series of budget cuts has reduced the agency’s ranks by close to 22,000 full-time employees since 2010.
The recently-passed $1.3 trillion spending bill provided about $11.4 billion for the IRS for fiscal 2018. That’s a 1.4 percent increase from the previous year, though it does include $320 million specifically designated to help implement the new $1.5 trillion tax-cut law.