A bipartisan IRS reform bill, Taxpayer First Act (HR3151) was signed into law by President Trump on July 1, 2019. This is the first legislation in 20 years aimed at modernizing the IRS and strengthening taxpayer rights. 

tax update - taxpayer first act - cpe for cpas

The Taxpayer First Act:

  • requires IRS to develop a plan to improve customer service;
  • establishes an Independent Appeals Process and allows eligible taxpayers access to the IRS's administrative file;
  • includes provisions to improve IRS protections for ID theft;
  • makes reductions to the threshold for e-filing;
  • clarifies process is de novo (a new look at facts and law by the court) for innocent spouse relief from joint liability;
  • bars collection of delinquent tax by a private debt collector if taxpayer's AGI is below 200% of the federal poverty level;
  • requires the IRS to provide advance notice to the taxpayer of a third party summons--at least 45 days before the beginning of contacts, but not more than one year before;
  • requires the IRS to maintain its Free File Program;
  • establishes new safeguards regarding seizure of funds for structured deposits meant to avoid the $10,000 form 8300 reporting; and
  • directs IRS to allow credit and debit card payments of taxes if fees are paid by the taxpayer. 

The cost of the changes is paid with an increase in the minimum late filing penalty after 2019 to the lesser of $330 (2020) or 100% of the tax.

What's missing?

Regulation of unenrolled tax preparers.