Taxpayer First Act - Taxpayer Experience

The Taxpayer First Act renames the IRS Office of Appeals as the IRS Independent Office of Appeals. This office will 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.

In addition, when the IRS or Chief Counsel has issued a notice of deficiency to a taxpayer, and denies the taxpayer's request for referral to the IRS Independent Office of Appeals, the IRS must now issue a notice to explain the reasons. It also needs to tell the taxpayer how to protest the denial.

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The Act requires the IRS to develop a thorough strategy for customer service. The IRS needs to submit the plan to Congress. The plan, updated guidance and training materials must also be available to the public.

The strategy will include best practices of customer service provided in the private sector, including, online services, telephone call back, and training of employees. The strategy must incorporate best practices of businesses to meet reasonable customer expectations.

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The Act provides a new way for low-income taxpayers to waive the application fee for an Offer-in-Compromise (OIC).

A taxpayer qualifies to waive the fee if their income is at or below 250% of the federal poverty level. In the past, the IRS waived the fee based on someone’s monthly gross income. The new method uses adjusted gross income (AGI) from the taxpayer’s most recent tax return.

A taxpayer who does not qualify under the new AGI method may request a waiver using their current household's gross monthly income, as entered on Form 433-A (OIC), for the next 12 months.

Volunteer Income Tax Assistance (VITA) program volunteers help low-income and other underserved taxpayers prepare income tax returns. The Act codifies the VITA program and allows Treasury to allocate up to $30 million per year in matching grants for VITA. Treasury can award the grants to qualified entities to develop, expand, or continue qualified programs.

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The Act allows Treasury Department personnel to advise taxpayers about low-income taxpayer clinics. Treasury staff can now provide information about the availability of clinics, eligibility requirements, locations and contact information for the clinics.

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The Act requires IRS to publicly notify affected taxpayers 90 days before closing a Taxpayer Assistance Center (TAC). The notice must be available non-electronically and must include the date of the proposed closure and alternative ways for taxpayers to get help.

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Property seized after July 2, 2019 may only be sold if it is perishable.

The Act allows IRS to exchange information with whistleblowers when doing so would be helpful to an investigation. It requires IRS to notify whistleblowers of the status of their claims at certain points in the review process. It also authorizes, but does not require, the IRS to provide status updates at other times upon written request.

To protect taxpayer privacy, the Act prohibits whistleblowers from publicly disclosing information they receive from IRS.

The Act also extends anti-retaliation provisions to IRS whistleblowers.

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The Act requires IRS to provide the following information while taxpayers are on hold with the IRS call center:

  • Information about common tax scams
  • How to report tax scams
  • Tips on how to protect against identity theft and tax scams

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The Act requires IRS to establish procedures for handling misdirected electronic tax refund deposits. These procedures should:

  • Allow taxpayers to report when an electronic refund was not transferred to their account.
  • Establish coordination with financial institutions to identify and recover these payments.
  • Deliver refunds to the correct accounts of taxpayers.

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The Act extends the requirement to e-file to all tax-exempt organizations required to file statements or returns in the Form 990 series or Form 8872 (Political Organization Report of Contributions and Expenditures). The Act also requires that IRS make the information provided on the forms available to the public in a machine-readable format as soon as possible.

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The Act requires that IRS provide notice to an organization that fails to file a Form 990-series return or postcard for two consecutive years. The notice must state that IRS has no record of receiving a return or postcard from the organization for two consecutive years and inform the organization that their tax-exempt status will be canceled if the organization fails to file a return or postcard by the due date for the next return or postcard. The notice must also contain information about how to meet the annual information return and postcard requirements.

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Feedback?

Do you have feedback you’d like to share as we continue to implement the Taxpayer First Act? Please send it to TFAO@irs.gov.