House Passes Legislation to Modernize IRS
Published: June 13, 2019
Congress makes an effort to improve the taxpayer experience and modernize the IRS with the Taxpayer First Act.
On Monday, the House passed legislation to revamp the IRS to improve customer service, update and expand technology, and overhaul the appeals process.
The bill, H.R. 3151, contains a number of IT-related provisions including subtitles for cybersecurity and identity protection, development of IT, and expanded use of electronic systems. Additionally, the bill requires the development of a comprehensive customer service strategy to include the adoption of commercial best practices for online services.
Provisions to address cybersecurity and identity protection requires the following:
- Public-private partnerships to address identity theft refund fraud
- Electronic tax administration advisory committee regarding identity theft refund fraud
- Information sharing and analysis center
- Compliance by contractors with confidentiality safeguards
- Identity protection personal identification numbers
- Single point of contact for tax-related identity theft victims
- Notification of suspected identity theft
- Guidelines for stolen identity refund fraud cases
- Increased penalty for improper disclosure or use information by preparers of returns
Mandates in the subtitle for IT development include:
- Management of IRS IT
- Internet platform for 1099 filings
- Streamlined critical pay authority for IT positions
Provisions regarding expanded use of electronic systems specify:
- Electronic filing of returns
- Uniform standards for use of electronic signatures for disclosure authorization to, and other authorizations of, practitioners
- Payment of taxes by debit and credit cards
- Authentication of users of electronic services accounts
The bill could give additional momentum to the IRS Modernization Business Plan which aims to modernize legacy IT systems and improve customer service. However, the legislation provides no additional funding to carry out the requirements. The modernization plan is expected to cost between $2.3B and $2.7B over the six years. The Taxpayer First Act now awaits Senate action.
Contractors should expect the IRS to continue to update and modernize IT, improve cybersecurity controls, and enhance the customer experience. These efforts will require IT investment and contractor support but will be tempered by budget constraints.