Congressional Report: What’s on Tap for Taxes

Now that the April tax-filing season is behind us, we can take a look at what new provisions are bubbling up in Congress. The tax-writing committees, headed by Senate Finance Chairman Orrin Hatch and House Ways and Means Chairman Kevin Brady, recently marked up several provisions with a focus on addressing identity theft and taxpayer rights, among other issues.

While major changes to tax law likely won’t occur until at least the start of a lame duck session, the two tax-writing committees will continue hearings and oversight in preparation of more fundamental changes that could start next year in conjunction with a new administration.

Identity Theft

Both the Senate Finance Committee and the House Ways and Means Committee have had similar language on identity theft. Provision passed include:

● Changing the due date for reporting payments of wages and employee compensation to February 15 following the year in which the amounts were paid
● Requiring the IRS to provide a centralized point of contact for victims of identity theft, essentially seeking to more effectively service taxpayers who are subject to identity theft
● Requiring the IRS to notify any taxpayer whose identity it believes was used without authorization, as well as if any criminal charges were brought against the person who committed the identity theft

Whistleblowers

Two helpful changes were made to the IRS whistleblower program, largely thanks to Senators Chuck Grassley and Ron Wyden.

The first allows limited communications with whistleblowers after they have filed, informing them if the case is being actively considered by exam and when a settlement payment has been made. The legislation also provides that the limited information given to the whistleblower is protected. The second change provides the whistleblower with protections from employer retaliation. While the IRS has been successful in protecting the identity of whistleblowers, for some there is still a risk of retaliation.

Supporting and strengthening the whistleblower program will be an effective tactic in addressing illegal offshore accounts.

IRS Management

Congressional provisions include allowing the transfer or removal of senior IRS executives who are underperforming, not allowing IRS funds to be used for political targeting, and not allowing a taxpayer assistance center to be closed without first informing Congress how taxpayers will be served. The IRS did receive an increase in appropriations for the first time in years, awarded to improve customer service.

No More Hold Music

Instead of classical music pumped through the phone while you wait, the IRS will now provide basic info about tax scams, direction on how to them, and tips on how to protect against scams and identity theft.

Over the past 25 years, Cohen & Burnett has earned a reputation as a leading Washington, D.C. law firm for estate planning and administration, tax law and preparation, retirement planning, and more. If you have questions about special needs trusts or private benefits, please visit our homepage today.

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