WASHINGTON, D.C. – Sen. Chuck Grassley of Iowa and Sen. John Thune of South Dakota today introduced comprehensive legislation to improve customer service at the IRS, create new taxpayer protections, and update and strengthen existing taxpayer protections. The Taxpayer Bill of Rights Enhancement Act of 2015 comes amid gross mismanagement and inappropriate actions by IRS employees that have shaken what little confidence taxpayers may have had in the agency.
“The IRS has never been anyone’s favorite agency,” Grassley said. “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.”
“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.”
The bill is necessary to ensure that appropriate safeguards are in place to protect taxpayer rights by preventing IRS abuses, Grassley and Thune said. Among other provisions, the legislation:
- Significantly increases civil damages and criminal penalties for the unauthorized disclosure or inspection of tax return information and significantly increases civil damages for improper IRS collection activities.
- Imposes an affirmative duty on the commissioner of the IRS to ensure that IRS employees are familiar with and act in accordance with all taxpayer protections.
- Updates 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.
- Permits 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.
- Puts the bite back into a provision, recently called a “toothless tiger” by Tax Notes, that permits taxpayers to bring a cause of action against the IRS for unauthorized collections actions.
- Extends 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.
- Prohibits IRS officers and employees from using personal email accounts to conduct official business.
- Provides additional authority concerning the use of taxpayer information to the IRS for the purpose of locating taxpayers due a tax refund.
- Requires tax-exempt organizations to file Form 990 electronically and mandates that the IRS make such information available in a timely manner.
- Imposes 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.
Grassley is the former chairman of the Finance Committee, with jurisdiction over the IRS. Grassley championed the 1988, 1996, and 1998 taxpayer rights laws currently on the books. Grassley and Thune serve together on the Finance Committee and are joining forces to make the right to quality service a high priority at the IRS.
The bill contains some provisions passed by the House of Representatives in April and additional provisions to address shortcomings that have come to light since the last taxpayer rights bill.