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US House Lawmakers Considering IRS Overhaul

Friday, April 13, 2018

The Ways and Means Committee of the US House of Representatives considered bills to overhaul the Internal Revenue Service and strengthen taxpayer protections at its recent markup session.

"The bills we have before us today look to dramatically redesign the structure of the IRS and refocus it as a 'Taxpayer First' agency," Committee Chairman Kevin Brady (R-TX) said in his opening statement at the hearing. He noted that it has been been 20 years since Congress last considered major legislation to reform the agency. "During that time much has changed, and the IRS must change with it," he said.

Government watchdogs and members of Congress have repeatedly warned in recent years that the IRS is struggling to cope with an ever-expanding remit and changes to the tax code, with declining levels of service for taxpayers and increasing rates of fraud seen as the consequences.

In February 2018, Senate Finance Committee Chairman Orrin Hatch (R-UT) expressed concern at the planned staffing cuts and reduced funding for the IRS, as outlined in President Donald Trump's fiscal 2019 budget request.

"I think it's high-time that Congress reexamines its approach to the agency," Hatch said at a committee hearing on the matter. "Because IRS will bear the brunt of the burden in implementing and administering the tax code and the new tax provisions, it needs sufficient personnel and resources to carry out its important mission at this critical juncture."

In her January 2018 Report to Congress, National Taxpayer Advocate Nina Olsen highlighted concerns over the IRS's "recent and continuing reductions in service for taxpayers" and recommended that "Congress both provide the IRS with sufficient funding to provide high-quality taxpayer service and conduct more oversight to ensure the IRS is spending the funding as intended."

According to Brady, the proposed legislation "advances a modern vision for the IRS so taxpayers are treated fairly, their disputes are handled objectively, and issues resolved quickly and more affordably. They create an independent office to handle taxpayer appeals and ensure taxpayers are no longer at a disadvantage to the IRS. They also insist that the IRS aggressively protects personal taxpayer information, proactively combats identity theft, and is prepared to readily assist American taxpayers when they are victims of this theft," he explained.

The committee also examined proposed measures to reduce levels of social security fraud.