The president has signed a package of IRS reforms into law after the legislation passed both houses of Congress with strong bipartisan support.
Accounting Today reports the Taxpayer First Act overhauls key aspects of the IRS, encourages the agency to modernize its technology and to submit a plan to Congress for overhauling its operations. The legislation beefs up a taxpayer’s right to appeal, creating an independent Office of Appeals and giving taxpayers full notice and protest procedures along with open access to case files.
The new law also mandates that the IRS come up with a comprehensive training strategy for employees that will foster a stronger culture at the IRS while reinforcing taxpayer rights. In addition, the agency is required to come up with uniform guidance for the use of electronic signatures.
On the tech side, streamlined critical-pay authority for IRS tech employees has been reauthorized, making it easier to hire the best technical staffers needed to overhaul IRS computer networks.
The Taxpayer First Act also protects low-income Americans by permanently authorizing the Volunteer Income Tax Assistance program, as well as providing extra funding for VITA. Accounting Today says the act codifies low-income taxpayer exceptions from fee waivers and lump-sum payments associated with IRS payment plans.
The IRS is also now required to issue a procedure to handle tax refund direct deposits that are sent to wrong accounts.
One of the more significant reforms comes in the area of protections for tax whistleblowers, prohibiting retaliation by employers. These protections include:
- the right to reinstatement and double back-pay
- prohibition of mandatory arbitration
- the right to go to federal court for a jury trial
- compensatory damages such as special damages, attorneys’ fees, and costs.
The new law builds on the existing IRS whistleblower program, permitting full and open communication between the IRS’ Whistleblower Office and the whistleblower to foster cooperation that can help fully prosecute tax frauds.