President Trump signed a new bipartisan bill on July 1, 2019 known as the ‘Taxpayer First Act of 2019’ into law. The controversial Free File provision was dropped from the bill after which it was quickly approved by the Congress. The new law aims to bring about changes in the IRS, including updating technology, improving service to taxpayers, and handling cybersecurity effectively. The Hill shares what the new law means for taxpayers:
“‘This signing is the culmination of a lengthy, bipartisan process undertaken by the Ways and Means Committee to implement pro-taxpayer reforms at the IRS for the first time in more than 20 years,’ House Ways and Means Committee Chairman Richard Neal (D-Mass.) said in a statement. ‘New protections for low-income taxpayers, practical enforcement reforms and upgraded assistance for taxpayers and small businesses will all now go into place.’
The top Republican on the committee, Rep. Kevin Brady (Texas), also praised the measure’s enactment.
‘Thank you to President Trump for signing this historic legislation, which is the biggest and boldest step in over 20 years to redesign and restructure the IRS into an agency with a singular mission – quality taxpayer service,’ he said.
Brady and Rep. Mike Kelly (Pa.), the top Republican on the Ways and Means Committee’s Subcommittee on Oversight, were in the Oval Office when Trump spoke. The law makes a host of targeted improvements to the IRS, aimed at bolstering its customer service, modernizing its information technology, helping victims of tax-related identity theft, and strengthening taxpayers’ rights during the IRS enforcement process.
Among the provisions in the new law are establishing an independent appeals office, preventing low-income taxpayers from having their cases referred to the IRS’s private-debt collection program and creating a single point of contact at the IRS for identity theft victims. It also includes a provision to increase the penalty for failing to file a tax return, so that the bill does not add to the deficit.
The law came about after lawmakers held numerous hearings and roundtables about overhauling the IRS. Prior to its June vote on the final version, the House had passed iterations of the bill multiple times last year, as well as one in April. But the legislation suffered a setback earlier this year over a provision in the previous versions of the bill that would have codified the IRS’s Free File program, in which the IRS partners with tax-prep companies to have those companies offer free tax-filing software to many taxpayers.
Some Democratic lawmakers – who want the IRS to create its own free, online filing system and are worried about corporate influence in politics – raised concerns about the Free File provision on the day the House passed the April version of the bill, after ProPublica wrote an article highlighting tax-prep companies’ lobbying on the issue. In the weeks following the April vote, ProPublica wrote additional articles about the Free File program, reporting that tax-prep companies have taken steps to hide their options under the program. Those articles prompted the IRS to launch a review of the program, and lawmakers on both sides of the aisle have urged the agency to take any necessary steps to address issues with the program. Lawmakers introduced a new version of the Taxpayer First Act that did not include the Free File provision in early June, which the House and Senate both quickly passed, and which has now been signed into law.”