IRS chief to lawmakers: Act on tax extenders by year's end

The top IRS official told lawmakers on Thursday that they may have to delay next year’s tax filing season for some taxpayers if lawmakers do not act soon on expired tax provisions.

Doug Shulman, the IRS commissioner, told a House panel that Congress needs to proceed either way on the lapsed tax measures, commonly known as extenders, by the end of the year to not disrupt tax filings for 2012.

“In recent years, it seems taxpayers increasingly face uncertainty of what the tax law will be the next filing season,” Shulman said at a hearing of the House Ways and Means oversight subcommittee.

Shulman’s statements came shortly before Reps. Dave Camp (R-Mich.), the House Ways and Means chairman, and Pat Tiberi (R-Ohio), who chairs a Ways and Means subcommittee on taxes, announced they would start a review of tax extenders in April.

Top officials in both parties have expressed an interest in dealing with the expired provisions this year, and concern that the tax code has so many temporary measures.

In addition to the Alternative Minimum Tax, incentives for research and development and alternative energy expired at the end of last year. Some lawmakers already have made unsuccessful pushes to extend at least some of the tax extenders this year, including in the energy sector.

The Alternative Minimum Tax was implemented to ensure that wealthier taxpayers aren’t able to dodge taxes, but Congress now has to act frequently to ensure that the AMT doesn’t impact more middle-class families as well.

Shulman also made a broader defense of his agency’s performance collecting the nation’s taxes in his Ways and Means appearance, as he faced some criticism from GOP lawmakers over the IRS’s customer service and oversight of certain tax incentives.

Rep. Lynn Jenkins (R-Kan.) told Shulman that she was troubled that a declining number of taxpayers calling the IRS in recent years were able to speak with an agency official.

“It seems to me that the IRS has placed greater emphasis on enforcement at the expense of service,” Jenkins said.

But the IRS commissioner told lawmakers that the agency, which saw its budget cut by $300 billion for fiscal 2012, still returned a high return on Congress’ investment.

“We try to do the best we can with the budget that Congress gives us,” Shulman said. “Obviously we have a big job to do. We try to balance across the board all of the things we do.”

Democrats like Rep. Xavier Becerra (D-Calif.) sympathized with the IRS, noting that the agency has 5,000 fewer employees now than a year ago.

“The truth is, for the most part, we have employees who do just yeoman’s work trying to help their fellow Americans,” Becerra said. “I hope that people sound the alarms on the ability for us to pay our taxes the right way.”