Taxpayer Rights Act of 2015

William Delaney, EA
Westwood, MA

Every year, several well intentioned Members of Congress get together and introduce legislation intended to benefit and/or protect taxpayers in dealing with tax law and tax administration.  And, every year the legislation ends up on a shelf somewhere, gathering dust and attracting paper mites.  This year we have US H 4128 and its Senate companion US S 2333 (both introduced on 11/30/2015).  Here is a summary of what they contain…

1.  There is a very detailed “statement of taxpayer rights” (10 specific rights as proposed by the National Taxpayer Advocate) including the Right to pay no more than the correct amount of tax (gee, how is that going to be determined?); Right of appeal from a decision of the Internal Revenue Service in an independent forum (maybe I can land a job with that new independent forum---I’ll sock it to the IRS as good as anybody else);  Right to a fair and just tax system, including access to the Taxpayer Advocate Service
(sounds nice, but will “they” fund it).

2.  Grants for VITA and similar benefit plans for low-income taxpayers.  Learn all about “qualified return preparation programs.”

3.  Establishes the “National Center to Promote Quality, Excellence, and Evaluation in Volunteer Income Tax Assistance” aka the “Center.”  There shall be designated one “lead national organization” to “carry out the purposes of the Center.”  Oh, did I forget to mention that an annual grant shall be provided to the lead national organization.  This lead organization means any organization as described in IRC Sec. 501(c) and exempt from tax under Sec. 501(a).  The AICPA would qualify (others go to the back of the line).

4.  Regulation of Tax Return Preparers.  Section 330 of Title 31 U.S. Code is amended so that the authority of the Secretary of the Treasury or his delegate (i.e. Commissioner of Internal Revenue) to regulate is expanded to include tax return preparers in general. Likewise, Title 31 is amended to expand the authority to sanction.

5.  Penalty Increases (big time increases).  IRC Sec. 6695 penalties for failing to furnish a taxpayer with a copy of a tax return; failure to sign a tax return; failure to provide an identification number on a tax return are increased from $50 per violation to $1,000 per violation.  The annual $25,000 cap (maximum) on each type of penalty assessment has been removed.

6.  Sec. 204(b) of the Act – “Any enrolled agents properly licensed to practice as required under rules promulgated under subsection (a) [of Sec. 330 of Title 31 U.S. Code] shall be allowed to use the credentials or designation of enrolled agent, EA, or E.A.”  The Section is silent, however, in providing any mechanism to override any existing state accountancy statutes which prohibit the use of the initials EA by persons not licensed by the state accountancy board.  If the Section included additional language such as “…when engaged in income tax preparation and/or interaction with federal and state tax agencies and departments” it would effectively override existing state level prohibitions.  Otherwise, it is nothing more than stuff and nonsense and a restatement of what one is already allowed to do at the federal level.  “it is a tale…full of sound and fury, Signifying nothing.”  MacBeth, Act. 5, Scene V.

7.  Lengthy sections on Improving IRS Procedures.; Lien Information, etc.; Tax Court review of innocent spouse determinations; Levies.

8.  Finally, several sections dealing with the National Taxpayer Advocate.

Your Editor has seen it all before and remains hopeful as in “hope springeth eternal.”