Taxpayer First Act

The Taxpayer First Act (Pub. L.Tooltip Public Law (United States) 116–25 (text) (PDF), 133 Stat. 981, enacted July 1, 2019) is a law that makes significant reforms to the Internal Revenue Service (IRS).

Taxpayer First Act
Great Seal of the United States
Acronyms (colloquial)TFA
Enacted bythe 116th United States Congress
Citations
Public lawPub. L.Tooltip Public Law (United States) 116–25 (text) (PDF)
Statutes at Large133 Stat. 981
Codification
Titles amended26 U.S.C., the Internal Revenue Code of 1986
Legislative history

Description of provisions

The law revises provisions relating to the IRS, its customer service, enforcement procedures, cybersecurity and identity protection, management of information technology, and use of electronic systems.[1]

Specifically, the law:

  • codifies the requirement of an independent administrative appeals function by establishing within the IRS an Independent Office of Appeals.
  • requires the IRS to develop a comprehensive strategy for customer service.
  • makes changes to the process of issuing and addressing Taxpayer Advocate Directives.
  • requires that the IRS submit a reorganization plan, after which the structural requirements mandated by RRA 98 no longer apply.
  • codifies the Volunteer Income Tax Assistance (VITA) program.
  • amended rules for seizure and sale of perishable goods so that they are truly restricted only to perishable goods.
  • requires the IRS to work collaboratively with the public and private sectors to protect taxpayers from identity theft tax refund fraud.
  • provides that the IRS may participate in an information sharing and analysis center aimed at preventing identity theft tax refund fraud.
  • requires that the IRS provide identity protection personal identification numbers to taxpayers who request them (within five years of the law's enactment).
  • codifies the role of IRS's Chief Information Officer and requires that the person in that role supervise all of IRS's information technology efforts.
  • requires the IRS to create a platform for Form 1099 filings.
  • allows the IRS to use streamlined critical pay authority for information technology positions.
  • removes the requirement for the IRS to produce an annual report about the development of return-free filing.[2]

Bill history
President Trump signs the Taxpayer First Act into law.

On June 24, 2016, House Republicans published a tax reform blueprint that included the goal of reforming the IRS.[3] In 2017, the House Ways and Means Committee began to schedule public hearings, member events, and roundtables on the topic of tax administration reform.[4][5][6][7] On March 26, 2018, the Ways and Means Committee released the first draft of the Taxpayer First Act.[8] On April 18, 2018, the bill passed the House of Representatives unanimously.[9]

On July 19, 2018, the Senate introduced their own bipartisan IRS reform bill.[10] One week later, Senators Portman and Cardin introduced their own competing IRS reform bill.[11]

Neither of the Senate bills were passed at the conclusion of the 115th Congress.[10][11] As a result, on April 9, 2019, soon after the start of the 116th Congress, the House passed the Taxpayer First Act once again.[12] That bill was expected to pass the Senate, however on April 22, 2019 ProPublica published an exposé heavily criticizing the implementation of the Free File Program, which the bill would codify.[13] The House then removed the Free File provision from the bill,[14] which passed the House and Senate and was then signed by the president.[15]

Implementation

The IRS created a Taxpayer First Act Office to implement the law's provisions.[16] In January 2021, the IRS published a report to Congress addressing several of the law's provisions, including a new organizational structure.[16]

Notes
  1. Lewis, John (2019-07-01). "H.R.3151 - 116th Congress (2019-2020): Taxpayer First Act". www.congress.gov. Retrieved 2021-02-17.
  2. "govinfo". www.govinfo.gov. Retrieved 2021-02-18.
  3. "A Better Way" (PDF). Speaker.gov. 2019-01-06. Archived from the original (PDF) on 2019-01-06. Retrieved 2021-02-18.
  4. "Hearing on Reforming How the IRS Resolves Taxpayer Disputes". Ways and Means Committee - Democrats. 2017-09-13. Retrieved 2021-02-18.
  5. "Internal Revenue Service's Information Technology Modernization Efforts". Ways and Means Committee - Democrats. 2017-10-04. Retrieved 2021-02-18.
  6. "Taxpayer Experience with the Internal Revenue Service". Ways and Means Committee - Democrats. 2017-12-13. Retrieved 2021-02-18.
  7. "Member Day Hearing on Legislation to Improve Tax Administration". Ways and Means Committee - Democrats. 2018-01-30. Retrieved 2021-02-18.
  8. "Jenkins, Lewis Introduce Bipartisan Legislation to Redesign the IRS". Ways and Means Republicans. 2018-03-26. Retrieved 2021-02-18.
  9. Jenkins, Lynn (2018-04-19). "Actions - H.R.5444 - 115th Congress (2017-2018): Taxpayer First Act". www.congress.gov. Retrieved 2021-02-18.
  10. Hatch, Orrin G. (2018-07-19). "Actions - S.3246 - 115th Congress (2017-2018): Taxpayer First Act of 2018". www.congress.gov. Retrieved 2021-02-18.
  11. Portman, Rob (2018-10-03). "Actions - S.3278 - 115th Congress (2017-2018): Protecting Taxpayers Act". www.congress.gov. Retrieved 2021-02-18.
  12. Lewis, John (2020-08-04). "H.R.1957 - 116th Congress (2019-2020): Great American Outdoors Act". www.congress.gov. Retrieved 2021-02-18.
  13. Waldron, Justin Elliott,Lucas. "Here's How TurboTax Just Tricked You Into Paying to File Your Taxes". ProPublica. Retrieved 2021-02-18.{{cite web}}: CS1 maint: multiple names: authors list (link)
  14. Becker, Bernie. "Won't forget Free File". POLITICO. Retrieved 2021-02-18.
  15. Lewis, John (2019-07-01). "H.R.3151 - 116th Congress (2019-2020): Taxpayer First Act". www.congress.gov. Retrieved 2021-02-18.
  16. Internal Revenue Service. "Taxpayer First Act: Report to Congress" (PDF).
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