Congress unveils package of bills to reform the IRS

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The Republican and Democratic leaders of the House Ways and Means Oversight Subcommittee are releasing a set of legislation Tuesday to "redesign" the Internal Revenue Service.

One of the bills would amend the tax code to improve cybersecurity and taxpayer identity protection, and modernize the information technology of the IRS. Another bill would require the Treasury to establish a program for issuing identity protection personal identification numbers, also known as IP PINs. A related bill would provide for a single point of contact at the IRS for taxpayers who are victims of tax-related identity theft.

Another would restrict the immediate sale of seized property by the Treasury to perishable goods, thereby limiting the use of the controversial practice of civil asset forfeiture by the IRS. One piece of legislation would amend the tax code to require electronic filing of the annual returns of tax-exempt organizations and provide for making the returns available for public inspection.

The move follows the release last month of draft legislation to overhaul the IRS for the first time since 1998 (see Lawmakers introduce bill to reform the IRS). Ways and Means Oversight Subcommittee chairman Lynn Jenkins, R-Kan., and ranking Democrat John Lewis, D-Ga., asked for input on the draft proposals. Among the groups sending comment letters were the American Institute of CPAs and the National Association of Tax Professionals (see AICPA suggests ‘Practitioner Services’ division at IRS and IRS restructuring act must address needs of tax pros: NATP).

“Throughout this process over the past year and a half, we have kept one singular mission in mind: ensuring that the taxpayer comes first," Jenkins and Lewis said in a joint statement Tuesday. "These bipartisan bills take a giant leap forward in redesigning an agency that all Americans deal with throughout their lifetime. By enhancing customer service, improving the IRS’s vastly outdated IT infrastructure, and modernizing the appeals process, we are confident these bills will improve the taxpayer experience.”

Another bill in the package would permanently set up Volunteer Income Tax Assistance centers. Another bill would require notice from the Treasury whenever a Taxpayer Assistance Center is closed. Yet another bill would amend the tax code to allow officers and employees of the Treasury Department to provide taxpayers with information regarding low-income taxpayer clinics.

The bipartisan legislation for reforming the IRS stands in contrast to the tax reform overhaul that passed in Congress last December through Republican votes only, with little input from Democrats.

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Finance, investment and tax-related legislation Tax reform Identity theft Identity theft protection IRS