CONGRESS APPROVES IRS REFORM BILL

August 14, 2019 - Douglas Myser

Congress approves IRS reform bill. After years of under funding the IRS, last fall the IRS decided to start providing the IRS with funds to increase the Collection Activities of those who have fallen behind on back tax debt. It seems that after years of government cutbacks, Congress finally realized that the IRS is one government agency that actually brings in more money than they are given in a budget authorization. Bipartisan support was garnered and spending on increased Collection efforts started in the fall of 2018, to be up to full speed by the winter of 2020. Congress approves IRS reform bill.

The Senate voted to approve the Taxpayer First Act, H.R. 3151, three days after the House of Representatives had also approved it by a voice vote. The bill now goes to President Trump for his signature. An earlier version of the bill, H.R. 1957, would have codified the IRS's Free File program "including any subsequent agreements and governing rules established pursuant thereto. As part of the Free File program, the IRS has entered a memorandum of understanding with companies in the tax software industry that includes a pledge that the IRS will not develop its own tax preparation software. Some in Congress raised concerns that codifying the Free File program would prohibit the IRS from ever developing its own tax preparation software. Others in Congress disputed that this would be the result, however, the Free File language does not appear in the bill as it was passed.

The bill establishes an "Independent Office of Appeals" within the IRS. A new Chief of Appeals position is created by the bill, reporting directly to the IRS commissioner. The purpose of the new Independent Office of Appeals, as described is new Sec. 7803(e)(3), is to 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) enhance public confidence in the integrity and efficiency of the IRS.

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