U.S. Sen. John Thune (R-S.D.), a member of the tax-writing Senate Finance Committee, today joined Sen. Chuck Grassley (R-Iowa) in reintroducing the Taxpayer Bill of Rights Enhancement (TBORE) Act of 2017 (S. 1793), comprehensive legislation to improve customer service at the IRS, create new taxpayer protections, and update and strengthen existing taxpayer protections. This legislation updates the senators’ prior version of the bill. Parts of the prior measure were enacted into law, but further action is needed to improve the interaction between taxpayers and the IRS.
“Taxpayers have wrongfully suffered under the IRS for too long, and it’s time to restore some integrity back into this agency,” said Thune. “Our bill addresses these problems by strengthening taxpayer protections, which would allow Americans to rest easy, knowing they will get fair treatment when dealing with the IRS.”
“The IRS has never been anyone’s favorite agency,” said Grassley. “It has a long way to come back from scandals and declining customer service. Taxpayers shouldn’t be at a disadvantage with an agency that has tremendous power over their money. The IRS has to answer taxpayers’ questions, protect their privacy, and help people meet their tax obligations with fairness and respect.”
TBORE is necessary to ensure that appropriate safeguards are in place to protect taxpayer rights by preventing IRS abuses. Among other provisions, the legislation:
- Significantly increases civil damages for the unauthorized disclosure or inspection of tax return information and significantly increases civil damages for improper IRS collection activities.
- Puts the bite back into a provision, called a “toothless tiger” by a Tax Notes article, that permits taxpayers to bring a cause of action against the IRS for unauthorized collections actions.
- Increases the time period in which taxpayers may seek to have proceeds from the sale of wrongfully levied property returned to them.
- Provides relief to taxpayers who voluntarily work toward paying off their tax debts through the use of automated installment payments.
- Protects a taxpayer’s retirement nest egg where the IRS improperly levied on a taxpayer’s IRA or employer-sponsored retirement plan.
- Eliminates red tape that may act as a barrier to taxpayers facing financial hardship to settle their tax debt through an offer-in-compromise.
- Provides penalty relief to taxpayers by raising the threshold at which a penalty is imposed for the underpayment of estimated taxes, expanding its application and simplifying related calculations.
- Provides former spouses greater access to information about collection activities related to joint returns filed during their marriage.
- Ensures that low-income and elderly taxpayers continue to have access to free services to file their annual tax return.
- Ensures all taxpayers have convenient access to appeals by requiring the IRS to locate at least one appeals officer and settlement officer in each state. Iowa and South Dakota are among the states lacking in this area.
- Requires tax-exempt organizations to file Form 990 electronically and mandates that the IRS make such information available in a timely manner.
Provisions from the prior version of the Grassley-Thune Taxpayer Bill of Rights Enhancement Act that were enacted in December 2015 include:
- Codifying the Taxpayer Bill of Rights, which includes the right to: be informed; quality service; pay no more than the correct amount of tax; challenge the position of the IRS and be heard; appeal a decision of the IRS in an independent forum; finality; privacy; confidentiality; retain representation; and a fair and just tax system. The provision also requires the IRS commissioner to ensure that IRS employees are familiar with and act in accordance with these rights.
- Prohibiting IRS employees from using personal email accounts for official business. This codified an already established agency policy barring use of personal email accounts by IRS employees for official governmental business.
- Declaratory judgments for section 501(c)(4) and other exempt organizations. The provision permits these exempt organizations to seek review in federal court 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.
- Termination of employment of IRS employees for taking official actions for political purposes.