Taxpayer First Act Continued

Continuing from our post on Wednesday, here’s additional information that we thought would be important to share!

IRS must give notice of intent to contact third parties

Beginning August 15, 2019, the IRS must not contact any person other than the taxpayer regarding the determination or collection of tax liability without giving notice to taxpayers of the intent to contact 3rd parties (think banks, business partners, etc.) at least forty-five ahead of time.  While each notice is limited to a period of contact of up to one year, the Service can issue more than one notice for the same tax liability creating periods that aggregate greater than one year.

Whistleblower reform

Whistleblowers gain rights and protection under the Act.  Effective immediately, the IRS can disclose return information to Whistleblowers to aid in determining tax liability.  Whistleblowers are entitled to notice that an audit or examination or that a payment has been made by someone for whom they provided information within sixty days (60).  Additionally, Whistleblowers may request information on the status or stage of investigation and the reasons for the determination of the amount of any reward.

Employers may not discriminate against employees in reprisal for providing information or assisting in an investigation regarding underpayment of tax or testifying or assisting in administrative or judicial action relating to underpayment of tax, any violation of the internal revenue laws, or any Federal law relating to tax fraud.  Within 180 days of a violation, employees seeking relief must file a complaint with the Secretary of Labor. If the Secretary of Labor does not issue a final decision within 180 days of filing the complaint, the employee can bringing an action for de novo review in district court.  Remedies for employees who prevail in such an action include reinstatement with full status, 200% of back pay and 100% of all lost benefits, and litigation costs, expert witness fees, and reasonable attorney fees. 

The Whistleblower’s rights and remedies under the Taxpayer First Act cannot be waived and no predispute arbitration agreement will be valid if it requires arbitration of the dispute involving the rights under the Act.

Sales of seized assets restricted to perishable goods

New restrictions are placed on the sale of seized assets. Now sales are restricted to perishable goods, whereas before this included assets whose value may become greatly reduced in price or value by keeping or that such property cannot be kept without great expense.

Online platforms coming for 1099s and income verification service

By January 1, 2023, taxpayers can expect a new internet platform for 1099 preparation and filing as well as an automated credit check service which should help reduce unnecessary disclosures of private information and speed up income verification. 

Increased electronic filing for partnerships and exempt organizations

By 2021, partnerships required to file ten returns will be required to file electronically. 

By January 1, 2020, expect the published guidance establishing procedures for the acceptance of electronic signatures of taxpayers for requests for disclosure of returns or return information to enrolled agents or any power of attorney granted by taxpayers to a practitioner.

The Service will begin accepting payment of credit cards and debit cards directly, where the taxpayer will pay the credit card fees.

Exempt Organizations must now file electronically, although there will be transitional relief until July 2021 for smaller organizations (gross receipts less than $200k and aggregate gross assets less than $500k) Also, the Service will now issue notices to Exempt Organizations in danger of losing their tax-exempt status for failure to file a return or notice for two consecutive years.  The notices must provide information about how the revocation that will occur if the organization fails to file a return or notice by the due date for the next return or notice.  The notice requirements apply to organizations whose failure to file a notice occurred for a return required to be filed after December 31, 2019.

If you have any follow up questions regarding this new act, we’d be happy to chat with you! Please feel free to contact us here!

Here is also the link to the full PDF version of the Act for your download at your leisure.