The Taxpayer First Act renamed the IRS Office of Appeals as the IRS Independent Office of Appeals. This office will to continue to resolve tax controversies and review administrative decisions of the IRS in an impartial manner. However, it has some new requirements.
The new rules require the Independent Office of Appeals to make its referred case files available to:
- Individuals with adjusted gross incomes of $400,000 or less for the tax year to which the dispute relates;
- Entities with gross receipts of $5 million or less for the tax year to which the dispute relates.
When the IRS has issued a notice of deficiency to a taxpayer and the Independent Office of Appeals denies their request for review, the IRS must now issue a notice to explain the reasons. It also needs to tell the taxpayer how to protest the denial.
Under the Act, the Treasury Department is required to develop a comprehensive plan to redesign the organization of the IRS. Treasury must submit the plan to Congress by Sept. 30, 2020. Among other things, the plan must:
- Streamline the agency's structure to minimize duplicate services and responsibilities.
- Best position IRS to combat cybersecurity threats and others.
- Address whether the IRS Criminal Investigation Division should report directly to the commissioner.
One year after the IRS submits the plan to Congress, former law about the IRS's organizational structure will no longer apply. Earlier law required IRS to organize in operating units that serve groups of taxpayers with similar needs.