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Taxpayer First Act

The recently enacted Taxpayer First Act contained provisions that mainly focused on altering how the IRS operates and is directed by Congress to reorganize to prioritize taxpayer service and combating cybersecurity and other threats. It also included changes that will affect some business taxpayers and how taxpayers will be able to ask for an IP PIN in the future.

Here are some of the key provisions:

  • Identity Protection PIN
    The IRS is required to phase in over the next five years the ability for any taxpayer residing in the United States to request an IP PIN.
  • Electronic filing mandate for corporate and partnership returns are lowered from 250 returns as follows:
    • Corporate
      • 100 returns for 2021
      • 10 returns for 2022 and beyond
    • Partnership
      • Calendar year 2018 – 200
      • Calendar year 2019 – 150
      • Calendar year 2020 – 100
      • Calendar year 2021 – 50
      • After 2021 – 10
  • Reorganization of IRS
    IRS must submit a reorganization plan to Congress by September 30, 2020. This plan must consider how IRS will prioritize taxpayer services, streamline and simplify its structure, better position itself to combat ongoing cybersecurity and other threats, address whether the IRS Criminal Division should report directly to the IRS Commissioner and implement other provisions of the Taxpayer First Act.
  • Plan to Improve Service
    The legislation requires the IRS to submit to Congress a written comprehensive customer service strategy. This plan must provide assistance to taxpayers that is secure, designed to meet reasonable taxpayer expectations and adopt appropriate best practices of customer service provided in the private sector, including online services, telephone call back services, and training of employees providing customer services.
  • Enforcement Procedure Changes
    • Limits IRS seizure authority to property derived from an illegal source.
    • Revises requirements related to equitable relief from joint liability for unpaid taxes.
    • Restricts referrals of tax debts to private debt collection agencies, excluding taxpayers whose income consists of disability insurance benefits or other low income taxpayers.
    • IRS may no longer immediately sell seized property merely if is liable to become greatly reduced in price or value or cannot be kept without great expense.

See the Taxpayer First Act (HR 3151) for more information.

Mark Castro, CPA

Mark Castro, CPA

Mark has been with CrossLink Professional Tax Solutions (CPTS) since 2008, but has been in the tax industry since 1990. As the government/tax industry liaison for CPTS, Mark has been very active in working with the IRS, States, and other tax industry members to help improve communications, promote standardization, and simplification of eFile systems. Mark has also been active with industry associations as a board member of the National Association of Computerized Processors (NACTP) and the Council of Electronic Revenue Communication Advancement (CERCA) for many years. These two associations work with the IRS and States to help solve key eFile and electronic tax system issues and work to improve the operations of the State and IRS eFile systems.
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