TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

STATUS OF THE OFFICE OF CHIEF COUNSELíS ISSUANCE OF TAX CUTS AND JOBS ACT GUIDANCE

Final Report issued on May 14, 2019

Highlights of Reference Number:† 2019-14-025 to the Commissioner of Internal Revenue.

IMPACT ON TAXPAYERS

On December 22, 2017, the President signed Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act (TCJA). †The TCJA contains 119 provisions that affect both domestic and international taxes.† These changes affect individuals, businesses, and tax‑exempt organizations.† The IRS Office of Chief Counsel (hereafter referred to as Chief Counsel) plays a vital role in ensuring that the public has the information it needs to understand and comply with the new law.

WHY TIGTA DID THE AUDIT

Timely issuance of published guidance to taxpayers and tax preparers is critical so they have the information needed to file accurate tax returns.† Our overall objective was to determine the status of the Chief Counselís efforts to develop and issue published guidance related to the TCJA.

WHAT TIGTA FOUND

Chief Counsel began working on the TCJA shortly after it was enacted and has made significant progress in identifying, creating, and issuing the published guidance needed to educate the public about the impact the TCJA will have on its tax obligations.† In collaboration with the Department of the Treasury, Chief Counsel determined that 72 (61 percent) of the 119 TCJA provisions administered by the IRS would need published guidance (some requiring multiple guidance products).

To help manage the published guidance process, Chief Counsel developed processes to track the status of published guidance products for each provision and assigned attorneys in the Associate Chief Counsel offices to develop the required TCJA guidance.† In addition, the IRS identified the highest priority provisions in the TCJA.

As of the beginning of the 2019 Filing Season, Chief Counsel had issued 79 published TCJA guidance products.† Further, Chief Counsel issued four additional guidance products before the end of March 2019.† However, much work remains to issue complete guidance for the TCJA.† Chief Counsel plans to issue more than 90 published guidance products after March 29, 2019.

Several factors affect Chief Counselís efforts to issue published guidance, e.g., the volume and scope of the TCJA provisions, the review and approval process, and hiring constraints.† In addition, most provisions of the tax law went into effect on January 1, 2018, resulting in an immediate demand for guidance.† Finally, Chief Counsel will need to review and consider a substantial amount of public comments it has received on guidance issued to date as well as guidance it will issue in the future.†

TIGTA will continue to monitor the IRSís progress in issuing published TCJA guidance.

WHAT TIGTA RECOMMENDED

TIGTA made no recommendations.† However, key IRS officials reviewed the report and agreed with the facts and conclusions presented.

 

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2019reports/201914025fr.pdf.

 

Phone Number ††/† 202-622-6500

E-mail Address †/TIGTACommunications@tigta.treas.gov

Website†††††† ††††††/https://www.treasury.gov/tigta