**Update:  As of Monday, July 1, 2019, President Trump has signed the Taxpayer First Act into law.

A new, bipartisan IRS reform bill has just been signed into law by the President. The bill, called the Taxpayer First Act and championed by the Senate Finance Committee Chairman, Chuck Grassley (R-Iowa), promises to do just that: place the taxpayers first when it comes to the Internal Revenue Service (IRS). Here’s what the act will do for Americans now that it is signed into law.

New IRS Reform Bill at a Glance

In the words of Representative Grassley, the new Taxpayer First Act is a “step toward strengthening taxpayer protections and turning the IRS into the customer service organization it ought to be.” One of the significant moves of the act establishes a separate office of appeals for the IRS. Additional provisions aim at improving how the IRS works with whistle-blowers and providing the IRS more tools with which to strengthen relations between the IRS and taxpayers. After all, the IRS is the federal agency that everyday Americans interact with the most.

Other facets of the Taxpayer First Act include:

  • The IRS will be required to submit a Congressional plan on redesigning the structure of the agency to modernize its technology systems, improve efficiency, enhance cybersecurity, and better meet taxpayer needs.
  • Allow all taxpayers to obtain a PIN in order to secure their identity (not just those who have already fallen victim to identity theft).
  • Improve protections of taxpayer identity from identity theft and improve interaction for individuals who become a victim of identity theft.
  • Provide taxpayers protection from “structuring laws” that allow the IRS to seize assets using civil forfeiture procedures when bank deposits are made below $10,000.
  • Authorize the IRS to communicate with whistle-blowers during claims and extends anti-retaliation protections for IRS whistle-blowers.
  • Modify the private debt collection program to prevent the targeting of lower-income Americans.
  • Make the Volunteer Income Tax Assistance program official law (allows the IRS up to $30 million for matching grants to qualifying tax preparation sites).


Free File Alliance

The newly enacted Taxpayer First Act passed the Senate missing a provision from the original bill known as the Free File provision. This provision would essentially have barred the IRS from competing with online tax filing giants such as Intuit’s Turbo Tax, H&R Block, or TaxSlayer. This exclusion leaves the IRS the freedom to develop free to file sites for eligible taxpayers. The Free File provision was removed after news broke several months ago drawing attention to the unscrupulous practices of online tax preparation sites steering Americans towards paid tax preparation products that improved their bottom lines. The IRS stated earlier this year that they would be launching an inquiry into the alleged practice of tax preparation companies deliberately removing their free file programs from popular search engines.

What the New Law Means to You

The overall message is that the IRS will be better equipped to provide stellar service to taxpayers; something that doesn’t always happen with the current approach of the IRS. For lower-income Americans whose income is within 200% of the federal poverty level, it means that the IRS will not be able to send private debt collectors after you for old tax debts. The Taxpayer First Act would also prevent questionable websites from charging individuals for certain types of tax filings that are meant to be free.

Reliable Tax Help

All around, the bill stands to vastly improve the overall efficiency of the IRS and will hopefully enhance taxpayer satisfaction with this arm of the federal government. The Act will mostly help lower-income Americans, whistle-blowers, individuals who have had their identity stolen, and Americans who simply file a bare-bones tax return each year. Individuals who have more assets or income, own and operate one or more businesses, or who have complicated income tax filings should still seek the counsel of a capable accounting firm to make sure their interests are protected and to limit tax liabilities when filing taxes. Lawhorn CPA Group offers a wide range of services helping individual taxpayers and businesses reach their financial goals through proven, strategic, and cost-effective solutions.  Contact us today to learn more!