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 cyber security.
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.