Taxpayer First Act
Last week, Congress passed the Taxpayer First Act, a tax reform bill that has several provisions championed by the National Association of Enrolled Agents.
The Act establishes an Independent Office of Appeals to serve as an independent judiciary for administrative actions (examination and collection determinations) by the IRS. While an Office of Appeals exists within the current IRS structure, it is not a completely independent structure. The Office of the Taxpayer Advocate is strengthened as well.
The Act also prescribes changes to the customer service strategy, allows for exceptions from user fees for low-income taxpayers, and changes the IRS’ ability to utilize civil forfeiture in tax evasion or ‘structuring’ transactions.
Business filing more than 100 (10 if a partnership) information returns (Forms W-2, 1099, K-1, etc) will be required to electronically file the returns by 2021. Additionally, penalties for late filing and failure to file information returns has been increased to $330 per failure.
The Act has been passed through Congress, and is awaiting signature from the President.
This week, congressmen Jimy Panetta and Ted Yoho introduced the bi-partisan Taxpayer Protection and Preparer Proficiency Act of 2019. This is a companion bill to S.1192 introduced by Sens. Wyden and Cardin introduced in January.
This bill would require all tax preparers to meet minimum tax competency standards and agree to an ethical code of conduct in order to take fees for preparing tax returns.
The tax preparation industry is the only financial industry that requires no license, minimum educational standards, or continuing education, in order to assist taxpayers. We are proud to have only licensed tax professionals preparing tax returns in our office.
We urge you to contact your representative and ask him or her to cosponsor HR 3330 in order to implement taxpayer protections against unscrupulous tax preparers.
The House Ways and Means Committee marked up a trio of tax bills this week. One bill extends expired or expiring tax provisions, another expands refundable tax credits, and one seeks to incorporate gender neutral terms in the tax code. All bills passed committee, but a long negotiation is anticipated, as the bills will cost an estimated 130 billion dollars.