By Alistair M. Nevius at Journal of Accountancy on June 14, 2019
The Senate voted to approve the Taxpayer First Act, H.R. 3151, on Thursday, three days after the House of Representatives had also approved it by a voice vote. The bill now goes to President Donald Trump for his signature.
An earlier version of the bill, H.R. 1957, would have codified the IRS’s Free File program “including any subsequent agreements and governing rules established pursuant thereto.” As part of the Free File program, the IRS has entered a memorandum of understanding with companies in the tax software industry that includes a pledge that the IRS will not develop its own tax preparation software. Some in Congress raised concerns that codifying the Free File program would prohibit the IRS from ever developing its own tax preparation software. Others in Congress disputed that this would be the result; however, the Free File language does not appear in the bill as it was passed.
The bill establishes an “Independent Office of Appeals” within the IRS. A new Chief of Appeals position is created by the bill, reporting directly to the IRS commissioner. The purpose of the new Independent Office of Appeals, as described in new Sec. 7803(e)(3), is to resolve federal tax controversies without litigation on a basis that “(A) is fair and impartial to both the Government and the taxpayer, (B) promotes consistent application and interpretation of, and voluntary compliance with, the Federal tax laws, and (C) enhances public confidence in the integrity and efficiency” of the IRS. The resolution process afforded by the Independent Office of Appeals is to be generally available to all taxpayers, and, if an appeal request is denied, the IRS must provide a written notice explaining why.