Is tax-filing delay tied to HealthCare.gov problems?

House Ways and Means chairman asks why IRS employees were excepted from the shutdown to work on the health care site, but not to test key tax systems.

tax form and keyboard

The Internal Revenue Service deferred the beginning of tax-filing season until 50 of its data processing systems are programmed, tested and deployed -- a delay IRS officials attributed to the government shutdown. A key House Republican, however, wants to know whether the change is really related to the rollout of HealthCare.gov.

The IRS said on Oct. 22 that it had to postpone the beginning of the tax-filing season by a week or two because the 16-day shutdown came at one of busiest times of the year for its IT managers, who must make sure systems are ready for the huge volume of tax filings.

But Rep. Dave Camp (R-Mich.) fired off a letter to Acting IRS Commissioner Danny Werfel on Oct. 24 questioning the agency's decision to delay and accusing the agency of "putting a higher priority on implementing ObamaCare than tending to its core mission" of processing tax returns.

Camp, who chairs the House Ways and Means Committee, said President Barack Obama had signed into law significant changes to the tax code last January, which the agency coped with in only a week. "It strains credulity to believe that today, with absolutely no changes to the tax law — 13 weeks away from the originally scheduled date — the IRS can't make up 12 work days," Camp said. "This determination raises serious questions about how the IRS actually allocated its resources during the shutdown."

The IRS said in a statement to FCW that it had received and is reviewing Camp's letter, while stressing that the challenges posed by the shutdown were different from those presented by changes in the tax code.

"The current one- to two-week delay is much different than delays in prior years caused by legislation enacted late in the year, such as the AMT patch," the IRS statement reads. "With late tax law changes, the vast majority of core programming and systems work had been completed in the months leading up to the legislation being passed in December or later. The government shutdown delay in early October coincided with a crucial period for building our new systems for the filing season starting in 2014."

Camp, however, contends that the IRS had designated 77 IT professionals as essential before the shutdown so they could remain on the job to continue work on the health insurance exchange website, which went live Oct. 1. The congressman also noted that the IRS shutdown contingency plan said "key IT specialists" were needed to "triage any issues that arise in the initial weeks of deployment, as well as operate a continuously operating control room during the period." Camp said four non-IT employees in the Affordable Care Act Office were also deemed "excepted" in the IRS shutdown plan.

"The IRS needs to explain why implementing the president's health care law is more important than processing tax returns in a timely manner," Camp's letter states.

The original start date for the 2014 season had been Jan. 21, Werfel said in a statement. With the delay, the IRS would start accepting and processing 2013 individual tax returns no earlier than Jan. 28. A final decision on the start date is expected in December. The April 15 deadline for individuals to file tax returns remains in place.

"The government closure came during the peak period for preparing ITS systems for the 2014 filing season," the agency said in a statement. "Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of work beginning in the fall of each year."

An IRS spokesman declined to identify which systems were being updated, saying the information was sensitive.

The agency said about 90 percent of its employees were sent home during the 16-day shutdown, and some major work streams were closed completely. Officials said additional training, programming and testing demands are being made on IRS systems this year with the aim of enhancing capabilities related to detecting and preventing refund fraud and identity theft.

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