House Ways and Means Oversight Subcommittee Proposes IRS Reform
The House Ways and Means Committee on Monday issued a press release announcing a discussion draft for the Taxpayer First Act, a bipartisan effort aiming to “redesign the Internal Revenue Service (IRS) for the first time since 1998.” The reform legislation comes after three years of public hearings and round-table discussions and “incorporates provisions from at least 18 different bills.”
The discussion draft summary outlines six major topics for reform: the independent appeals process, improved service, enforcement, cyber security and identity protection, modernization, and the Tax Court. Here are some highlights:
- Codify the IRS Independent Office of Appeals.
- Increase Congressional oversight of the administrative review process.
- Stop requiring FOIA requests for taxpayers seeking information about cases brought against them.
- Create a comprehensive IRS customer service strategy that follows private sector examples, including established metrics for measuring success and meeting benchmarks.
- Make permanent the matching grants for Volunteer Income Tax Assistance (VITA) partners.
- Require the IRS notify affected taxpayers when Taxpayer Assistance Centers are close, as well as discussing other available options.
- Clarify that IRS employees are able to discuss Low Income Taxpayer Clinics (LITC) with low-income taxpayers.
- Require the IRS show probably cause when pursuing a violation of the Bank Secrecy Act.
- Redefine “perishable property” as only those items that are “liable to perish,” limiting the IRS’ ability to seize certain property and sell it on the same day for less than the minimum bid requirement.
- Require that all John Doe summons specifically request information “[pertaining] to the failure (or potential failure) of the person or group of persons to comply with federal tax law.”
- Prevent taxpayers who are 250 percent below the federal poverty level from being referred to private collection agencies.
- Codify the Security Summit partnership between the IRS, state tax agencies, and tax industry officials.
The summary document states “it is time to return the IRS back to its ‘service first’ mission”—a sentiment echoed by Chairman Lynn Jenkins (R-KS), who said the bill “will be a giant step forward in improving the taxpayer experience.” Similarly, Ranking Member John Lewis (D-GA) noted that the subcommittee’s work “produced a serious, thoughtful bill that puts the taxpayer first.”