(The Center Square) - A bipartisan panel of senators on Thursday advanced legislation to reform and modernize IRS operations and taxpayer services.
The U.S. Senate Finance Committee, in a 26-1 vote, advanced the Taxpayer Assistance and Service Act. The legislation works to streamline IRS operations and communications, protect taxpayers from penalties and extend online payment options.
Sen. Elizabeth Warren, D-Mass., was the only person to vote against the legislation.
The legislation mandates technological updates in IRS services, including the requirement to provide information about call wait times, callback availability and online account access.
“When the IRS falls behind in processing returns or letters, they’ll have to say so publicly within a week, eliminating guessing games for taxpayers wondering why their refunds haven’t arrived,” Sen. Mark Warner, D-Va., said.
The bill also requires the IRS to provide options for taxpayers who are facing economic hardship on their liabilities. Sen. Ron Wyden, D-Ore., said he hopes the bill would allow taxpayers to not rely on third party companies to file their returns.
“Oftentimes, returns get filed late or incorrectly, and the worst part is taxpayers might not even realize they've been ripped off until it's way late,” Wyden said. “Then the next thing you know, you're being hit by a costly and time-consuming audit. This bill takes important steps to crack down on these shady tax prep schemes that prey on families that are making a quick buck.”
The bill also pushes back return and payment deadlines for farmers and fishermen from March 1 to April 15.
“[This] is going to be a big boost to farmers and producers around the country, help them save time and give them some certainty,” Sen. Tina Smith, D-Minn., said.
The legislation also requires the IRS to annually report how it tracks paperwork received for tax forms. Senators praised this provision in the bill for helping to save time and money.
The National Taxpayers Union estimated that Americans spent more than 6.93 billion hours and $476.8 billion on tax compliance in the last fiscal year.
“People submit hard copies of their material to the IRS, and then they're in the situation of having to submit them over and over again because the IRS can't keep track of these hard paper documents,” Smith said. “It's a huge waste of time and incredibly frustrating for people.”
Sen. Chuck Grassley, R-Iowa, praised the committee’s passage of the bill and estimated its compliance reforms would generate greater returns to the Treasury Department. He said the bill’s provisions protecting IRS whistleblowers would save taxpayers more than $385 million.
“These provisions will ensure that those that risk their career to blow the whistle on corporate tax cheats can be confident that their identity will be protected and will receive fair award in a timely manner,” Grassley said.
The National Taxpayers Union praised the Senate’s legislation and urged its passage on the floor. The Union estimated that the legislation could increase the federal deficit by $388 million over the next 10 years.
“While this bill does increase the deficit modestly… the series of important reforms in this legislation will endure a smoother IRS experience for years to come,” the NTU wrote.