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GOP Senators Introduce Bill to Create New Taxpayer Protections

Jun 22nd 2015
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US Senate
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US Senate

Two Senate Republicans introduced legislation last week that would create new protections for taxpayers – and strengthen existing ones.

The bill, called the Taxpayer Bill of Rights Enhancement Act of 2015, targets the IRS, an agency “whose reputation and trustworthiness has severely deteriorated with the American people over the last several years,” said Sen. John Thune (R-SD), who introduced the legislation on June 16 with Sen. Chuck Grassley (R-IA). Both are members of the Senate Finance Committee.

“The IRS's level of customer service might be at an all-time low,” Grassley added in a written statement. “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.”

Among the provisions included in the lawmakers' bill are:

  • Increases civil damages and criminal penalties for the unauthorized disclosure or inspection of tax return information, and increases civil damages for improper IRS collection activities.
  • Imposes an affirmative duty on the IRS commissioner 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 US Treasury Department to provide status updates regarding investigations into misconduct by IRS employees – or in some circumstances third parties – to taxpayers who are the subject of the misconduct.
  • Permits taxpayers to bring a cause of action against the IRS for unauthorized collection actions.
  • Extends the declaratory judgment remedy currently available to 501(c)(3) organizations 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.

The IRS has not made many friends in Congress recently, as Republican lawmakers especially have taken the agency to task for admitting two years ago that it improperly scrutinized the tax-exempt applications of some conservative-leaning groups. Top Republicans in the House and Senate have also criticized the IRS for its spending habits.

The IRS has seen its funding erode by more than $1.2 billion in the past five years. The agency's fiscal year 2015 budget was set at about $10.9 billion, which is $346 million less than FY 2014. A spending bill proposed by the House Appropriations Committee last week would cut the IRS's budget even more – to $10.1 billion for FY 2016.

According to a report released by the Treasury Inspector General for Tax Administration on June 17, budget reductions have forced the IRS to cut 21 percent of its Automated Collection Services representatives and 28 percent of its Field Collection revenue officers since FY 2010.

The report also found that taxpayers who managed to get their calls answered by the IRS in 2014 spent an average of 15.9 minutes waiting for a contact representative, up from 8.1 minutes in 2011.

Last June, the IRS unveiled a Taxpayer Bill of Rights that serves as a blueprint for future dealings with the agency. Although the document itself isn't legally enforceable, the Taxpayer Bill of Rights – Publication 1, “Your Rights as a Taxpayer” – incorporates various provisions already included in the tax code and updates previous efforts to identify and specify taxpayer rights.

Related articles:

Obama: IRS' Targeting of Conservative Groups ‘Outrageous'
Senator Orrin Hatch to IRS: Let's Get Fiscal!
IRS Adopts a New Taxpayer Bill of Rights

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