The American people received an early Independence Day present on July 1 when President Trump signed into law H.R. 3151, the Taxpayer First Act of 2019.

The legislation is a good start on a full declaration of independence from onerous Internal Revenue Service (IRS) rules and regulations that have made taxpayers’ lives miserable for many years.  It also extends and improves some services that are intended to help taxpayers.

Citizens Against Government Waste (CAGW) signed several letters with other taxpayer groups in support of these IRS reforms from April 2018 through April 2019.  CAGW is also a member of the Coalition for Effective & Efficient Tax Administration.

The Taxpayer First Act establishes an independent office to allow taxpayers to appeal tax issues without going to court, requires improvements in customer service and personnel training, and increases protections for whistleblowers.  It also improves efforts to protect identity tax refund fraud, which occurs when someone steals a taxpayer’s Social Security number and files a false return, costing billions of dollars annually and forcing taxpayers to wait months for the tax refund they were supposed to receive.

There are also requirements to significantly improve cybersecurity and information technology (IT).  The IRS has spent billions of dollars over many years in failed attempts to upgrade its IT systems, often duplicating off-the-shelf commercial software.  The agency will have to come up with a comprehensive IT modernization plan, this time with hopefully greater congressional oversight and fewer wasteful expenditures.

H.R. 3151 also strengthens protection from wrongful IRS asset seizures against innocent small businesses that conduct certain cash transactions and increases taxpayers’ rights to appeal by limiting the circumstances under which the IRS can deny access to appeals.

One of the precipitating reasons for the Taxpayer First Act was the use by the IRS of expensive outside law firms to question witnesses under oath during discovery or in court.  This meant that these non-government individuals had access to confidential tax information about the potential defendant in the case.  While it had been used only against companies, which in and of itself was problematic, there was concern that it could be extended to individual taxpayers.  The legislation prohibits anyone other than IRS employees or the IRS Office of Chief Counsel from questioning any witnesses under oath.

Finally, when taxpayers call an IRS call center and are put on hold, they will not be forced to just listen to bad music.  They will hear information about tax scams and how and where to report such activity, and tips on how to protect against identity theft and tax scams. 

This Independence Day, taxpayers can celebrate more than America's birthday.  They can feel relief from some of the burdensome rules and regulations of America's most feared federal agency.