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July 9, 2019

Trump Signs into Law Bipartisan IRS Reform Legislation Taxpayer First Act

IRS Reform Bill

President Trump on July 1 signed into law a sweeping, bipartisan IRS reform bill known as the Taxpayer First Act of 2019 (HR 3151). The IRS reform legislation aims to broadly redesign the IRS for the first time in over 20 years.

Reworked IRS Reform Bill

The Senate approved the Taxpayer First Act of 2019 by voice vote on June 13. The measure was unanimously approved in the House on June 10.

The reworked IRS reform bill, originally introduced in the last Congress, was revised in early June after the House passed a prior version in April. However, the original House-approved Taxpayer First Bill (HR 1957) was quickly doomed in the Senate because of recent controversy surrounding the IRS’s Free File program.

The provision codifying the IRS’s Free File program was removed from the original bill and the measure was reintroduced as HR 3151. Congress then quickly sent it to the president’s desk.

Taxpayer First Act Provisions

Generally, the Taxpayer First Act aims to reform the IRS into a more taxpayer-friendly agency. The measure requires the IRS to develop a comprehensive customer service strategy, as well as a plan to redesign the Service’s structure, modernize its technology, and enhance its cybersecurity.

Additionally, the measure contains some of the following IRS reforms:

· Codify and enhance an independent Office of Appeals within the IRS;

· Waive the application fee for an offer in compromise (OIC) by a low-income taxpayer;

· Set new electronic filing requirements;

· Clarify information available about low-income taxpayer clinics (LITCs);

· Codify the Volunteer Income Tax Assistance (VITA) Program;

· Require notice regarding the closure of taxpayer assistance centers (TACs);

· Improve the IRS whistleblower program;

· Modify the private debt collection program;

· Clarify procedures for equitable relief from joint liability;

· Establish new safeguards on the seizure of funds believed to be structured to avoid the $10,000 financial reporting requirement; and

· Modify procedures for the issuance of summons and notice of third party contacts by the IRS.

Hill Reaction

"This signing is the culmination of a lengthy, bipartisan process undertaken by the [House] Ways and Means Committee to implement pro-taxpayer reforms at the IRS for the first time in more than 20 years," Senate Finance Committee (SFC) Ron Wyden, D-Ore., said in a July 1 statement. "New protections for low-income taxpayers, practical enforcement reforms, and upgraded assistance for taxpayers and small businesses will all now go into place."

Additionally, the House’s top Republican tax writer issued a statement after Trumped signed the IRS reform legislation. "I’m proud that after three years of thoughtful bipartisan work, our bold package of reforms to the Internal Revenue Service are the law of the land," Ways and Means ranking member Kevin Brady, R-Tex., said on July 1. "Thank you to President Trump for signing this historic legislation, which is the biggest and boldest step in over 20 years to redesign and restructure the IRS into an agency with a singular mission – quality taxpayer service."

Copyright © 2019, CCH INCORPORATED. All Rights Reserved. Contents of this publication may not be reproduced without the express written consent of CCH and CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

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