Have you heard of the Taxpayer First Act? Did you know the IRS is undergoing changes for us, the taxpayers? In July 2019, the Taxpayer First Act was signed into law. Under this law, taxpayer’s rights were expanded and strengthened. The law is designed to make the IRS more taxpayer friendly. There are a few parts to the law with the following areas of focus:

  1. Taxpayer Experience
  2. IRS Modernization
  3. IRS Organization
  4. Cybersecurity and Identity Protections
  5. Enforcement

Under the taxpayer experience portion of the law, the IRS renamed the IRS office of appeals to the IRS Independent Office of Appeals and is now required to make referred case files available to individuals with gross income under $400,00 or to entities with gross receipts of $5 million or less. Additionally, when a denial of referral to the IRS Independent Office of Appeals occurs, the IRS must now issue a notice explaining the reason(s) for the denial. Also, it must include instructions on how to protest the denial.

For the IRS modernization section of the law, the IRS Commissioner must appoint an IRS Chief Information Office (CIO). The IRS CIO will oversee all IT systems for the IRS. This includes development, implementation and maintenance of IT. The IRS CIO will also be the advocate for the IT needs of the IRS while ensuring the IT of the IRS is secure and integrated, and maintaining operational control of all IT for the IRS. Another piece of the modernization section requires the IRS to develop an internet portal by Jan. 1, 2023 that allows taxpayers to electronically file Forms 1099.

IRS Organization is changing in pursuit of efficient and effective tax administration. The Taxpayer First Act improves the way the IRS interacts with the Taxpayer Advocate Service. Under the Act, the IRS Commissioner or a deputy commissioner is required to respond to Tax Advocate Directives (TADs). It specifies a timeline for response and the National Taxpayer Advocate (NTA) is now required to notify Congress of any TADs the IRS has not addressed. A plan to reorganize the IRS is required to be submitted by the Treasury Department to Congress by Sept. 30, 2020. This plan aims to minimize duplicate services and responsibilities. It will also allow the IRS to be best positioned to fight cybersecurity threats.

Cybersecurity and Identity protections are just what they sound like. The IRS is now required by the Act to work with both public and private sectors to protect taxpayers from identity theft refund fraud. The Act also authorizes the IRS to participate in the Information Sharing and Analysis Center (ISAC). Allowing the IRS to disclose certain return information to ISAC participants if it will help with detecting or preventing identity theft tax refund fraud or validating a taxpayer’s identity.

There is another section regarding enforcement. Hopefully this won’t apply to you. Here is a link to follow if you want to find out more. https://www.irs.gov/taxpayer-first-act 

If you need any tax help, please reach out to us. We’d love to answer your tax questions and help you by preparing your return https://www.accountantcolumbiatnsuccentrix.com/services/tax-preparation/. If you are a small business owner, we’d love to chat with you about your accounting needs. Please call 931.286.2654 today.