A bipartisan proposal to redesign the IRS for the first time since 1998 was released on March 26. House Ways and Means Oversight Subcommittee Chairman Lynn Jenkins, R-Kan., and ranking member John Lewis, D-Ga., released the Taxpayer First Bill, a discussion draft of proposed legislation to improve IRS operations.
“I am proud of the work this subcommittee has done to advance this initiative in a bipartisan fashion,” Jenkins said in a press release. “The IRS reform bill we are releasing today will be a giant step forward in improving the taxpayer experience.”
The discussion draft is the product of Oversight Subcommittee public hearings and round table discussions, according to Lewis. “We produced a serious, thoughtful bill that puts the taxpayer first,” Lewis said. “I am proud of the process and product, and I hope that we will maintain the bipartisan spirit throughout Committee and Floor consideration.”
The discussion draft focuses on the IRS appeals process, improved service, sensible enforcement, cybersecurity and identity protection, and IT and organizational modernization.
The IRS reform proposal would establish an independent office of appeals to ensure all taxpayers are able to access the administrative review process. Additionally, the IRS would be required to provide taxpayers with their case file before the start of any dispute resolution process.
The discussion draft lists several provisions focused on improving taxpayer services. Under the proposal, the IRS would be required to, among other things, permanently provide matching grants to support Volunteer Income Tax Assistance (VITA) programs, eliminate the Offer in Compromise (OIC) application fee and initial payment requirements for certain taxpayers, and allow IRS employees to provide eligible taxpayers with location and contact information for Low Income Taxpayer Clinics (LITCs).
The bipartisan proposal would also establish a single point of contact within the IRS for taxpayers who are victims of identity theft. “The single point of contact will be responsible for tracking the taxpayer’s case to completion and coordinating with other units to resolve the taxpayer’s issues as quickly as possible,” the proposal notes.
Additionally, the proposal would require the IRS to provide any taxpayer concerned of identity theft with an Identity Protection Personal Identification Number (IP PIN) to use in filing a return. Currently, the IRS only provides taxpayers with an IP PIN if the Service determines a taxpayer to be at risk.
Under the redesigned IRS, the head of the agency would no longer receive the title of “Commissioner.” The discussion draft proposes, instead, the title “Administrator of the Internal Revenue Service.”
Additionally, the draft proposes expanding the use of electronic systems. Moreover, the proposal would require electronic filing for any individual filing 10 or more returns. Currently, the electronic requirement applies for individuals filing more than 250 returns.
Furthermore, the proposal would require all tax-exempt organizations that file annual returns with the IRS to submit returns electronically. As it stands, only tax-exempt organizations that have assets greater than $10 million and those that file more than 250 returns are required to file electronically.
The lawmakers requested comments on the discussion draft by April 6. Commentators can submit comments electronically to email@example.com.
By Jessica Jeane, Wolters Kluwer News Staff