WASHINGTON—The Internal Revenue Service plans to spend $291 million updating 140 computer systems to help it implement the new tax law, according to a previously undisclosed agency document.
Those information-technology costs and other back-office operations will consume more than 90% of the money Congress is giving the IRS for implementation. The IRS is also bracing for a 17% increase in phone calls, planning to revise 450 forms and publications and organizing 40,000 hours of training, according to the document.
Earlier this year, Congress reserved $320 million of the IRS’s $11.4 billion budget for implementing the tax law. Without that boost, total funding would have gone down, continuing a trend since Republicans won the House in 2010 that has caused the tax agency to shed employees and reduce the frequency of audits.
The $320 million, available through Sept. 30, 2019, was contingent on the IRS submitting this spending plan to Congress. The National Taxpayer Advocate, an independent entity inside the IRS, said earlier this year that the IRS will need $495 million over two years for implementation.
The law, which was enacted in December, made the farthest-reaching changes to the U.S. tax system since 1986, lowering tax rates, limiting tax breaks and restructuring the way the U.S. taxes multinational companies.
The tax law altered long-standing features of the business and individual tax codes that were programmed into the IRS systems that receive and analyze tax returns. Preparing for the new law—especially the tax-filing season that starts in January 2019—requires revamping those systems.
IRS information-technology efforts have struggled for years, most recently on the individual tax-filing deadline this April when a failure prevented the agency from processing returns and forced a one-day extension.
In addition to the IT costs, the IRS also plans to spend $7.5 million to assist the chief counsel’s office, adding funding for the lawyers who write published guidance and regulations.
Write to Richard Rubin at richard.rubin@wsj.com