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What the new Taxpayer First Act means to you

Jul 29, 2019

On July 1, President Trump signed a “Taxpayer First Act” that is designed to modernize the IRS and enhance taxpayer services and protections. 

Here are some highlights of the new law:

Customer service

The IRS is required to develop a customer service strategy to better assist taxpayers. This includes improved telephone service, better training for IRS customer service employees and shorter wait times at IRS locations. The IRS is allowing taxpayers to leave call-back phone numbers instead of sitting on hold. 

The law requires the strategy be developed by July 1, 2020 and provide benchmarks for measuring its progress. 

National taxpayer advocate directives

The National Taxpayer Advocate sends a report each year to Congress on what the IRS can do to improve. The new law also says the IRS must state, in writing, that it is going to adopt the changes — or if it is not, explain why. 

Independent Office of Appeals

The law also established that the Independent Office of Appeals is independent of the IRS. The office is designed to give taxpayers a place to resolve their tax issues without litigation. All taxpayers are entitled to request this office get involved in their issues. 

The law also states the IRS must provide a written notice explaining why they deny any appeals. 

Identity theft

Taxpayers can now report identity theft in just one place at the IRS. Before this new law was passed, the IRS had multiple locations to report identity theft, and this was confusing for taxpayers. 

Improper disclosure of use of information by a tax preparer

Tax preparers who improperly disclose taxpayer information are now to be penalized $1,000 for each improper disclosure. The maximum penalty is $50,000 annually. 

Tax-exempt organizations notifications

The IRS is now required to notify organizations before revoking their tax-exempt status. In addition, tax-exempt organizations are now required to electronically file annual returns. 

Installment agreements for taxes owed to the IRS

The law increases the maximum length of installment agreements that private debt collectors can offer taxpayers from five to seven years.

Offer in Compromise fees

Taxpayers whose adjusted gross income is 250% or less of the poverty line no longer must pay an application fee to file an Offer in Compromise request, which is a request  to pay less than your full tax debt. 

In addition to the new rules, the act also provided more funding to the IRS so it can increase the number of employees and improve their training. 

Read the full law for more details. If you have any questions, contact your Wipfli representative.

Author(s)

Mary Jo Werner
Mary Jo Werner, JD, CPA, CFF
Partner
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