Senators Introduce Bill to Enhance Taxpayer Bill of Rights

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Senators Chuck Grassley, R-Iowa, and John Thune, R-S.D. introduced legislation to improve customer service at the Internal Revenue Service, create new taxpayer protections, and update and strengthen existing taxpayer protections. 

[IMGCAP(1)]The Taxpayer Bill of Rights Enhancement Act of 2015 will help ensure that appropriate safeguards are in place to protect taxpayer rights by preventing IRS abuses, according to Grassley and Thune. 

“The IRS has never been anyone’s favorite agency,” Grassley said in a statement. “But it shouldn’t repel and mistreat the people it exists to serve. The IRS’ level of customer service might be at all-time low. Taxpayers are at a disadvantage with an agency that has tremendous power over their money. The IRS might talk about good customer service.  Too often, talk is all there is. The IRS needs to walk the walk. Congress needs to act. This bill will help swing the pendulum away from agency self-preservation and back to taxpayer service.” 

Among other provisions, the legislation would significantly increase civil damages and criminal penalties for the unauthorized disclosure or inspection of tax return information and significantly increase civil damages for improper IRS collection activities. 

The bill would impose an affirmative duty on the IRS commissioner to ensure that IRS employees are familiar with and act in accordance with all taxpayer protections. In addition, the legislation would update the “10 deadly sins” established by the IRS Restructuring and Reform Act of 1998, those actions by IRS employees that require mandatory termination, to include official actions taken for political purposes.

The proposed legislation also would permit the Treasury Department to provide status updates, and in certain instances require status updates, regarding investigations into misconduct by IRS employees—or in some circumstances third parties—to taxpayers who are the subject of the misconduct.

The bill would toughen a provision that permits taxpayers to bring a cause of action against the IRS for unauthorized collections actions. It would also extend the declaratory judgment remedy currently available to 501(c)3 to other 501(c) groups, including 501(c)(4) social welfare organizations, in instances where the IRS fails to act on an application in a timely manner or makes a negative determination as to their tax-exempt status.

In addition, the bill would prohibit IRS officers and employees from using personal email accounts to conduct official business. It also would provide additional authority concerning the use of taxpayer information to the IRS for the purpose of locating taxpayers due a tax refund.

[IMGCAP(2)]The bill would require tax-exempt organizations to file Form 990 electronically and mandate that the IRS make such information available in a timely manner.  The legislation also would impose new requirements on the IRS with respect to email retention consistent with the existing directive from the Office of Management and Budget and the National Archives.

“This bill is intended to enact a much-needed culture change at the IRS, an agency whose reputation and trustworthiness has severely deteriorated with the American people over the last several years,” said Thune. “No American should have to fear that politics could play a role in their confidential tax information being disclosed to a third party‎, that they will be targeted based on their political beliefs, or that the IRS would not properly retain its employees’ emails. This bill takes an important step toward restoring this agency to one that the American people both expect and deserve.”

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