Senate Finance Committee Chairman Crapo and Ranking Member Wyden Release Discussion Draft of “Taxpayer Assistance and Service Act”

By snapme | January 30, 2025 |

Earlier today, Senator Mike Crapo, chairman of the Senate Finance Committee, and Senator Ron Wyden, the committee’s ranking member, jointly released a discussion draft of a broad and sweeping bill titled the Taxpayer Assistance and Service, or “TAS,” Act. The draft bill runs 163 pages and contains 68 provisions – about 40 of which reflect National Taxpayer Advocate recommendations. This is a big deal for taxpayers! This is a big deal for tax administration! If ultimately enacted, the TAS Act will rank with the IRS Restructuring and Reform Act of 1998 and the Taxpayer First Act of 2019 among the most significant pieces of taxpayer rights legislation Congress has passed. I encourage you to read the official press release from the Senate Finance Committee.

Tax administration rarely gets as much attention from Congress as tax policy, but for taxpayers, tax administration is where the rubber meets the road. More than 160 million individual taxpayers file returns with the IRS each year, and most pay professionals to prepare their returns because they aren’t confident they can prepare them accurately on their own. While most returns are processed without difficulty, tens of millions of taxpayers run into problems every year.

Some examples: their returns are rejected by the IRS’s e-filing system so they need to file on paper; their refunds are frozen because their returns have been flagged by refund fraud or identity theft filters; they receive confusing math error notices to which they are required to respond within 60 days or forfeit their right to Tax Court review; they are audited; they are hit with questionable penalties; they face IRS collection actions like levies or liens; they contest an adverse administrative decision before the Office of Appeals; or they are forced to go to Tax Court to challenge a tax deficiency determination or to other federal courts to sue for a refund.

Each of these encounters presents challenges for taxpayers and the IRS alike, but ultimately, it is the taxpayers who bear the brunt of the many procedural hurdles they must overcome to get the IRS to process their returns, to obtain their refunds, and to respond to any one of a variety of notices they may receive from the IRS that could result in the denial of a claimed tax benefit, assertion of penalties, or an increase in tax due.

By law, the National Taxpayer Advocate is required to propose legislative recommendations annually to mitigate problems taxpayers encounter in their dealings with the IRS. We present our legislative recommendations in the National Taxpayer Advocate Purple Book, and we make administrative recommendations in other parts of the National Taxpayer Advocate Annual Report to Congress that Congress sometimes decides to address through legislation. The TAS Act is based largely on common sense recommendations my office has made, but it incorporates many other proposals as well.

The bill contains 10 titles. They include:

Improving tax administration and customer service;
Creating fairness and simplification for millions of U.S. taxpayers living abroad;
Streamlining judicial review of adverse IRS determinations in several ways;
Strengthening the independence of the Office of the Taxpayer Advocate;
Authorizing the Treasury Department to establish minimum standards for tax return preparers;
Strengthening taxpayer rights before the Office of Appeals;
Setting forth rules relating to whistleblowers;
Providing filing and payment relief for U.S. taxpayers held hostage abroad who miss deadlines;
Providing administrative relief for small businesses; and
Certain miscellaneous changes.

The best part? Although the tax-writing staffs have devoted hundreds of hours to getting the details right, they recognize some of these issues are extraordinarily complex. For that reason, they have released this text as a “discussion draft” and are soliciting public input before they develop a final bill. I strongly encourage the tax professional community to review this draft carefully and provide comments to refine it. You can find the section-by-section bill summary and the full text of the draft bill on the Senate Finance Committee website.

Realistically, the road from bill introduction to bill passage can be long. On the Senate side, the full Finance Committee would have to approve the bill, and then the full Senate would have to follow suit. The same process would have to play out on the House side, with the Ways and Means Committee providing approval and then the full House. But this is an excellent start.

I want to thank Chairman Crapo and Ranking Member Wyden for the time they and their staffs have devoted to developing this draft bill. Modifications no doubt will be made, but if the bill remains similar in content to this discussion draft, I will encourage Members of Congress to prioritize the passage of this common sense legislation, as it would ensure stronger protections for taxpayers and a fairer and more transparent tax system.