Feigenbaum Law

The Taxpayer First Act: IRS Reform Legislation Passed by Senate

Corporate Tax Planning
Personal Tax Planning
June 14, 2019

After initially being introduced more than a year ago, the Taxpayer First Act has been passed by the House and Senate. The legislation includes a variety of provisions intended to modernize the Internal Revenue Service across a wide range of critical areas including information technology, identity theft protection, and customer service.

While it remains to be seen what happens next, it is widely believed that President Trump will sign the bill into law.

A Brief History of the Bill

The key areas of the Act have been in discussion for more than a year. An initial proposal was first introduced in the Ways and Means Oversight Subcommittee in March 2018 but did not get very far. After this, Congress introduced the Taxpayer First Act of 2019. A final version of the recently passed Bill was reintroduced by the Chairman of the Ways and Means Subcommittee in early June.

New Changes

The Taxpayer First Act introduces a number of provisions, including:

  • the establishment of an independent office of appeals within the IRS;
  • the development of a comprehensive training strategy for IRS employees;
  • preservation of the IRS Oversight Board (intended to help set the long-term strategic direction of the IRS);
  • modernization of IRS technology systems and enhancement of its cybersecurity;
  • enhanced measures to help protect taxpayers from identity theft;
  • improvements to the existing IRS whistleblower program, including the extension of anti-retaliation provisions to whistleblowers;
  • safeguards against recent IRS enforcement abuses of “structuring laws”;
  • modifications to the private debt collection program intended to ensure that lower-income taxpayers are not targetted;
  • codification of the Volunteer Income Tax Assistance (VITA) program to enable the IRS to provide up to $30 million in matched grants to qualified tax preparation sites.

Reactions to the Newly Introduced Bill

Senate Finance Committee Chairman Chuck Grassley noted in a recent statement:

This bipartisan, bicameral bill represents years of hard work and consensus building…[i]t’s a big first step toward strengthening taxpayer protections and turning the IRS into the customer service organization it ought to be…I look forward to President Trump signing it into law so the IRS can begin implementing long overdue reforms that will put taxpayers first.

Reactions to the Taxpayer First Act has been largely positive. A spokesperson for the Partnership for Tax Compliance, a group which advocates for private debt collection agencies that work with the IRS noted that:

We’re very happy to see such a strong bipartisan effort to strengthen and expand the PDC Program…[t]axpayers will continue to benefit from the program’s ability to expand the IRS’s customer service capacity, reaching out to provide a broader array of flexible, installment agreement options, and the additional tax dollars collected via the PDC program will go a long way to strengthen the budget and pay for critical federal efforts in the years ahead.

A spokesperson for the National Association for the Self-Employed noted:

“Every step Congress takes toward streamlining and simplifying the tax code and increasing the efficiency of the Internal Revenue Service is a win for America’s small business and self-employed community… [an IRS] that is modernized and focused on customer service translates into savings of time and money for America’s entrepreneurs. For the self-employed community, every hour spent trying to get answers or on hold with the [IRS] is time they are unable to devote to growing and expanding their small business. We applaud congressional leaders in both parties for working together to secure swift passage of the Taxpayer First Act and urge President Trump to sign the legislation into law.

How Can Feigenbaum Law Help?

We will continue to follow developments in this matter and will provide updates as they become available. In the interim, if you have questions about personal tax planning or corporate tax planning contact Mark Feigenbaum.

We can help you reduce your overall tax burden, shield your business from liabilities, and remain compliant and avoid pitfalls that result from improper tax planning.

We provide full tax services with respect to your cross-border business initiatives. We offer services to clients in the US, Canada and around the world. Contact us at mark@feigenbaumlaw.com, or call us at (905) 695-1269 or toll free at (877) 275-4792 to learn more about how we can help.

 

 


Tagged: IRS, legislative changes, Taxpayer First Act