A couple of weeks ago I wrote about the “Taxpayer First Act”, HR 3151, being recently passed by Congress. We have since that time received several clarifications and much explanation of the Act. The tax professional community has diligently worked with the Internal Revenue Service and Congress to get the best bill possible for all parties; including the IRS, the tax professional community, and, first and foremost, all of us taxpayers. President Trump has agreed that the Taxpayer First Act will be a good thing for all of us and has now signed the Act into law. The Act has three distinct parts.
Title One is “Putting Taxpayers First”. Whether you agree or disagree on President Trump’s politics or his tweets, you might agree that his actions in this area appear to back up the fact that he does put taxpayers first. The Tax Cut and Job Act enacted last year and now this bill are two examples. This part of the Act has several parts entailing how the present day IRS’ interactions with taxpayers will be improved upon. Improving that service given to taxpayers was a major point of the Act. This includes establishing an Independent Office of Appeals for those times when a taxpayer has a disagreement with the IRS and a settlement might be worked out before the taxpayer is forced to go the Tax Court route. The Act also revises the Office of the National Taxpayer Advocate (NTA). The NTA “represents taxpayer interests independently in disputes with the IRS”. Even though the NTA still reports directly to the IRS Commissioner, the Act significantly strengthens the hand of the NTA. Evidently, in many instances, the Commissioner was not required to respond to the NTA and, since it was not required to respond to the NTA, it made the choice to not respond. The NTA reported or questioned the actions of the IRS but the Commissioner ignored the report or simply did not answer the NTA questions. That should stop going forward because not only does the IRS have to answer the NTA but the NTA is also required to make a report to the House Ways and Means Committee concerning the interaction of the NTA and the IRS Commissioner.
Title Two is “21st Century IRS”. This part of the Act’s intent is to bring the information technology and internal practices of the IRS up to date. There are Cyber Security, Identity Theft, and Electronic Systems improvement procedure provisions. Bringing these programs up to date is very important but will be a major undertaking both in dollars to be spent and time incurred. Since the IRS has control of vast amounts of private taxpayer information, it does have immense responsibilities in this area.
Title Three is “Miscellaneous Provisions”. It seems that most acts passed by Congress have a “Miscellaneous Provisions “ or catch-all provision and the Taxpayers First Act is no different. In this case, among other items, the IRS is prohibited from re-hiring an employee who was separated from the Service for misconduct. Seems reasonable to me but must have been an issue for the IRS. Also, the penalty for failing to file certain tax returns has been increased from $200 up to $330 for returns required to be filed after December 31, 2019.
All in all, the Taxpayers First Act appears to be a good thing for taxpayers. As we learn more concerning the “fine print”, I will pass that information along. As we all know, the devil is sometimes in the details so I will keep reporting on those details. This is Jerry Coon signing off.
Jerry Coon is an Enrolled Agent.
Action Tax Service is a part of Integrity Tax Group on Northland Dr in Rockford.
Contact Jerry at www.actiontaxservice.com