The Taxpayer First Act easily passed Congress on a bipartisan basis and was signed by the president. It includes a veritable smorgasbord of ideas on improved customer service, enforcement easing’s, identity protection, cybersecurity, modernization, expanded use of electronic systems and much more. Some of the provisions are as follows:
An independent office of appeals within IRS to resolve controversies for most taxpayers.
An IRS re-design. The Service is mandated to develop its own reorganization plan that meets certain parameters and submit it to Congress by September 2020. IRS is mulling a new division dedicated to tax practitioners.
On taxpayer service, IRS is tasked with crafting a customer service strategy. Low incomers seeking offers in compromise to settle tax debts won’t have to pay a fee. IRS must give advance notice before closing an in-person taxpayer assistance center.
Among the enforcement and collection changes: The agency is prohibited from turning over tax debts of low-income individuals to private tax-debt collectors. Taxpayers will get timely notice when the Revenue Service contacts a third party, such as a bank or employer. Controversial asset seizures will be reined in.
Two changes affect nonprofits: Non-filers get relief on exemption revocations. Exempt groups that fail to file their annual Form 990 returns for two consecutive years will get a letter from IRS notifying them that the agency hasn’t received the filings and that not filing for a third straight year will cause their exemption to be revoked. All exempt groups have to electronically file their annual Form 990s, except that smaller organizations get an additional two years to comply.
Ideas to help victims or potential victims of tax identity theft are included. All individuals can request a special password to use before filing returns. Individuals will be alerted to suspected identity theft. IRS will notify them when it detects an unauthorized use of their or any dependents identity. Identity theft victims will be assigned an IRS employee to track their case.
The fine for filing late returns is going up. Currently, the minimum penalty for returns filed 60 or more days after the filing due date is the lesser of $215 or 100% of the amount required to be shown as tax on the return. Under the new law, the $215 figure is increased to $330 for returns required to be filed after 2019.