House Passes First IRS Reforms in 20 Years

The day after Tax Day 2018, as the Internal Revenue Service struggled to restore a balky website, the House on Wednesday nearly unanimously approved a package of nine bills touted as the first reforms to the tax agency in 20 years.

With titles such as “21st-Century IRS Act” and the “Taxpayer First Act,” the bills would redesign the tax agency to stress customer service, new taxpayer appeal rights, improved responsiveness to victims of identity theft and modernization of technology.

“A new tax code calls for a new tax administrator, and we have worked together so that the IRS can be transformed into an agency with a singular mission: “taxpayer first,” said Ways and Means Committee Chairman Rep. Kevin Brady, R-Texas. The bills are “refocusing the agency to live up to its mission of quality service, and reining in its enforcement powers to prevent future abuse.”

In floor debate, Brady said the measures remind “the IRS they are not just an enforcement agency – they are also our tax administrator. That’s why the legislation changes the title of the IRS chief from commissioner to administrator.” 

Oversight Subcommittee chairman Rep. Lynn Jenkins, R-Kan., said on Wednesday, “As a CPA, I’ve seen first-hand countless examples of the IRS being out of date with technology and out of touch with the needs of the taxpayer. Yesterday’s website failure at the IRS added more urgency to the need to modernize the IRS and focus on the taxpayer experience.”

Democrats largely backed final passage, though some objected during voting on the rule for the major bills because they didn’t have opportunities to offer amendments. Ranking Ways and Means member Rep. John Lewis, D-Ga., said days before the vote on the Taxpayer First Act, “I am very proud of our work to set an income level for the private debt collection program," which "costs three times more than it collects. It also targets and abuses thousands of low-income taxpayers by enrolling them in installment agreements that they cannot afford. In my heart of hearts, I believe that the program is a shame and a disgrace, and that it must end. I am glad that our bill moves us in the right direction.”

Senate Finance Committee Chairman Sen. Orrin Hatch, R-Utah, has said he supports the package.