Did Congress Create a Friendlier IRS?

image of Mark J. Corey, CPA, JD

About the author
Mark J. Corey, CPA, JD

Dealing with the Internal Revenue Service (IRS) can be a difficult process in the best of times, but add in a disagreement over tax deductions, or a proposed penalty for some alleged tax mistake, then your experience with the IRS can turn from bad to nightmarish.  To help taxpayers, Congress passed, and the President signed legislation titled “Taxpayer First Act” on July 1, 2019.  This law is the first major reform of the IRS in some time and is intended to make the IRS more “friendly” to the taxpayers of the United States.  Indicative of the common bad experiences people have had with the IRS, the bill was passed with significant bi-partisan congressional support.

The bill made significant taxpayer-friendly changes to the law, including:

  • Establish an “Independent Office of Appeals” within the IRS. The purpose of the new Independent Office of Appeals per sec. 7803(e)(3):
    • Resolve federal tax controversies without litigation on a basis that
      • “(A) is fair and impartial to both the Government and the taxpayer,
      • (B) promotes consistent application and interpretation of, and voluntary compliance with, the Federal tax laws, and
      •  (C) enhances public confidence in the integrity and efficiency” of the IRS.
  • Create a new Chief of Appeals position, reporting directly to the IRS commissioner.
  • Development of a comprehensive customer service strategy, to be submitted to Congress within one year of the enactment of the bill.
    • The IRS must come up with a plan to provide better assistance to taxpayers
    • Determine what services the IRS can “co-locate” with other federal services
    • Propose ways to improve IRS customer service
    • Refresh guidance and training materials for IRS customer service employees
    • Select metrics and benchmarks to measure progress in implementing the strategy.
  • Requires the IRS to establish a single point of communication for tax-related identity theft victims as well as notify taxpayers if they are suspected victims of identity theft;
  • Strengthen the penalty for improper disclosure or use of information by a tax return preparer, if the use or disclosure is connected with taxpayer identity theft;
  • Directs the IRS to establish an online platform that allows taxpayers to prepare and file 1099s;

The IRS reform bills’ provisions are still evolving and may be complicated to implement so if you think they may apply to your tax situation, you should consult your tax advisors for assistance.