On July 1st, President Trump signed into law the Taxpayer First Act of 2019 (“TFA”), a comprehensive blueprint for improving and modernizing the IRS. U.S. Representative Richard Neal (D. – Mass.) said the bill was “the culmination of a lengthy, bipartisan process undertaken by the Ways and Means Committee to implement pro-taxpayer reforms at the IRS” and will provide “new protections for low-income taxpayers, practical enforcement reforms, and upgraded assistance for taxpayers and small businesses.”
The bill – a relatively short 37 pages – requires the IRS commissioner to submit a plan to Congress to restructure the agency, with a focus on boosting taxpayer service and cybersecurity, no later than September 30th of next year. The following summarizes some of the notable changes we can expect to see.
During last year’s tax filing season, the IRS received over 40 million phone calls; callers that were placed on hold waited an average of nine minutes. According to a report from the IRS’s Taxpayer Advocate Service, almost 40% of the taxpayers who called the IRS reported that one phone call did not fully resolve their question or problem.
Consequently, the TFA requires that the IRS develop a comprehensive customer service strategy and make its plan and training materials public within two years. Among other things, the TFA requires the IRS to provide taxpayer assistance that is secure, designed to meet reasonable expectations, and adopts the best practices of customer service that are provided in the private sector, including online services, telephone call-back services, and training of employees. Metrics and benchmarks are to be established to measure progress.
Cutting down on identity theft and return fraud has been a major priority for the IRS in recent years. The Government Accountability Office found that data breaches like the 2017 Equifax hack have not only made Social Security numbers prevalent on the black market, but no longer provide a safe way to identify a taxpayer when an individual requests information from the IRS.
Therefore, the new law directs the IRS to establish a program to issue an “identity protection personal identification number” (IP PIN) to an individual upon request. The IP PIN will be used in conjunction with the taxpayer’s Social Security number (or other identifying information) to assist the IRS in verifying an individual’s identity. The IRS must provide the IP PIN to taxpayers in an increasing number of states each year, with the program to be made available nationwide within five years.
Senate Finance Committee Chairman Charles Grassley (R – Iowa) said, “The bill is a big first step toward strengthening taxpayer protections and turning the IRS into the customer service organization it ought to be.” In other words, improving the “S” in IRS.