The House recently passed the Retirement, Savings, and Other Tax Relief Act of 2018, which includes the Taxpayers First Act of 2018: legislation created to protect taxpayers from unfair practices as well as improve IRS operations. If the Bill makes it through the Senate, we’ll be seeing a more modernized and simplified IRS.
The bill directs the IRS commissioner to submit a plan for improved customer service within a year and a full plan to completely restructure the agency by September of 2020. The focus of this revamp will include, but not be limited to, the following:
The goal is to enhance customer service by adopting the private sector best practices of customer-service providers, which would mean updating guidance and training materials for IRS customer-service employees as well as developing means for quantitatively measuring the progress of customer service strategy. This would include providing taxpayers with more secure and varied means of communication, such as online and telephone call back services.
The IRS would initiate a collaborative effort with the private sector to improve cybersecurity and protect taxpayers from identity theft refund fraud. Along with implementing an information sharing and analysis center, the initiative would include appointing an IRS Chief Information Officer.
The plan would broaden electronic service assistance, such as creating individualized online accounts and portals for taxpayers to access taxpayer information, make payments of taxes, and share documentation. This includes adding the ability for taxpayers to prepare and file Forms 1099.
One of the IRS’s most forceful capabilities is property seizure. The new bill would still allow the IRS to pursue the seizure or forfeiture of assets, but only if a) either the property to be seized was derived from an illegal source, or b) the transactions were structured for the purpose of concealing a violation of a criminal law. It also includes new post-seizure procedures to protect taxpayers who had property taken by the IRS for violating the reporting rules. And should a court return funds to a taxpayer whose assets were mistakenly seized, the new bill provides taxpayer exemption for interest liability.
Other areas of improvement covered in the Bill include an independent appeals process for all taxpayers with a legitimate claim, easier access to equitable relief for innocent spouses on a deceptive joint return, and greater restriction on the IRS to issue a John Doe summons for suspected tax code violation.